Friday, September 18, 2009

"A high level of scientific illiteracy in the investment community"

On the topic of biofuels, see the article "Interest in algae's oil prospects is growing," by Tiffany Hsu in the Los Angeles Times, which has quote from, among others, Biofuels Digest editor Jim Lane. Of companies mentioned:

National energy companies are converging on the fledgling industry. Exxon Mobil Corp. announced a $600-million partnership with La Jolla biotech company Synthetic Genomics Inc. in July. San Diego companies General Atomics and Science Applications International Corp. have received nearly $50 million from the Defense Department for algae fuel research.

The "valley of death," much mentioned in stem cell research, is discussed:

The problem is translating successful lab experiments to an industrial scale. Mass algae biofuel production could require enormous pools or photobioreactors while growing a proportionally small amount of algae. Technology needs to be developed to systematically extract the oil from the organisms.

"There's a valley of death between research and development and commercial development," said Lisa L. Mortenson, chief executive of Community Fuels in Encinitas.

In the old days, one had programs to turn [very expensive] buckyballs into [less expensive] diamonds and now we have:

"The majority [of the efforts] are a gigantic hassle of time and capital because they're trying to make coal out of diamonds," said David Andresen, a clean-tech investment banker at Oracle Capital Securities. "There's such a high level of scientific illiteracy in the investment community that you can really wow investors."

Yes, including talk of 20,000 gallons per acre. Recall that venture capitalists are NOT primarily looking at the science. See

Venture capitalist stresses management; ideas are a dime a dozen

Are patents a key factor for venture capitalist investment?

Of stem cells, CIRM's loan program ostensibly targets firms facing a “financial valley of death.”

**from algaehub: Unfortunately, the algae energy industry is haunted by exaggeration and irrational exuberance.


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