Dot-Coms Are So '90s; In Silicon Valley, Doing Good Is the New Thing

Venture capitalist John Doerr, shown in 1998, is into health care and energy investments. In the late '90s he funded dot-com successes and dot-bombs.
Venture capitalist John Doerr, shown in 1998, is into health care and energy investments. In the late '90s he funded dot-com successes and dot-bombs. (By Todd Cross -- The Washington Post)
By Ariana Eunjung Cha
Washington Post Staff Writer
Tuesday, August 9, 2005

MENLO PARK, Calif. -- They say the soul of Silicon Valley is reflected in the billboards scattered along the 45-mile stretch of Highway 101 that cuts through the region. During the dot-com era, the messages were mostly from start-ups like Excite.com, Homestead.com and eGain.com. The goal was to sell you something, anything.

Today the signs have changed. "End World Hunger," urges one billboard. Another promotes a campaign to aid the mentally disabled. A third features a smiling portrait of the men and women of the California Air National Guard 129th Rescue Wing, who "keep America safe, secure and free."

Ten years after the Aug. 9, 1995, initial public offering of Netscape Communications Corp. set off the Internet boom and five years after the bust, venture capitalists are leading a push to remake Silicon Valley as a center for a new form of social entrepreneurship and venture philanthropy, a place where you can make good money by doing good.

While plenty of people here still are out to make fast bucks, there also has been a surge in investments aimed at solving some of the world's most formidable problems. Venture capitalists chastened by the bursting of the bubble say they want to make a mark that lasts beyond the next quarterly filing with the Securities and Exchange Commission.

A decade ago, scientist Eric Nyberg had what he thought was a breakthrough technology. Working out of his garage, he invented a low-cost, low-energy method for purifying water. But it was all but impossible to get the attention of dot-com-crazed investors.

A few months ago, Nyberg's company, Pionetics Corp., began soliciting investments again. This time it was inundated with offers and had to turn some down. The company, which aims to help stop the spread of waterborne disease in underdeveloped countries, raised about $6.4 million in venture funds from seven firms.

"People are looking to have more meaning in their lives," said John Doerr, a partner at uber-venture capital firm Kleiner Perkins Caufield & Byers. "It is a sign the technology community is coming of age."

Doerr became famous for funding some of the Internet's biggest success stories, as well as some of its most spectacular failures. These days he focuses mostly on health care and energy companies and has been applauded for helping get California's $3 billion stem cell initiative passed and for promoting small loans for entrepreneurs in the developing world.

Some say the shift is as much about helping themselves as it is about helping others.

"Adam Smith said that self-interest is the purest form of altruism. . . . As venture capitalists we are driven to produce financial returns, but to do that we have to think carefully about whether our investments solve unmet needs," said Robin Bellas, a general partner with Morgenthaler Ventures.

Halfway down 101 is the geographic, philosophical and emotional center of Silicon Valley: Sand Hill Road, where the region's most prestigious venture capital firms are based and where countless entrepreneurs' dreams are either made reality or crushed.

It is in these offices where the transformation is most acute. Instead of waiting at desks as the business plans flow in, many venture capitalists are actively trolling university labs for the latest inventions. More than a few firms these days keep their venture capital investments a secret, allowing companies the ability to concentrate on their research without public scrutiny.


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