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We're still in the early stages of this trend, but it's pretty clear that the green energy sector is fast becoming a venture capital darling. Today, for example, five deals were announced in one publication alone (three VC, two acquisitions). The three investments account for $47.4 million in VC investment. And only yesterday, Solazyme picked up another $57 million in its Series C round.

In what remains a capital-constrained market, the cash is still flowing. In the private equity space, investments in clean technologies have remained steady from 2007 to 2008, despite broader economic calamity. Such commitment this early in the game may hint at what the next bubble will be.

It looks like investors couldn't wait to get a piece of SolarWinds Inc. (NYSE: SWI). The venture-backed tech company's IPO priced this morning at $12.50 a share, about a dollar more than expected. During the day, it went as high as $15.16.

That's great news for SolarWinds and its backers, but it may not be the long-awaited sign that the window of opportunity for IPOs is opening after months of being firmly slammed shut. SolarWinds has a 10-year record of profitability, a customer list that includes 80 percent of the Fortune 500, and the support of some of the sharpest venture capital investors around. If anything, its success suggests a sterling pedigree still goes a long way but riskier companies may have a harder slog on their way to going public.

The first three months of 2009 were absolutely brutal for venture capital, with clean energy leading the way with a decline of 87% compared to the same period in 2008.

Overall, United States venture capital investments fell 61% to $3 billion in the first quarter -- the lowest level in 12 years, according to the National Venture Capital Association.

VentureDeal issued its second-quarter VC funding reports, and the sector drawing the biggest increase in private financing is, not surprisingly, energy.

During the period, 60 companies got $1.3 billion in backing. That represents a nearly 300% jump from the first quarter of 2008, and a 67% increase in the number of companies funded, the report said. Naturally, the numbers were skewed a bit by a few large deals in the alternative energy sector including solar service provider SunEdison's $131 million fundraising and BrightSource Energy Inc.'s $115 million Series C round.

The sector was also boosted by fundings for cutting-edge energy technologies, such as advanced batteries and wireless power transmission.

Continue reading at TechConfidential.com.

Venture capital-backed IPOs are nonexistent lately (there were zero in Q2). The M&A market has been soft for VC-backed deals. And the economy is slowing.

All in all, this is the recipe for big-time problems in the VC space. Yet, according to a recent survey from Thomson Reuters and the National Venture Capital Association, VCs were actually able to raise 3% more in funds in Q2, to $9.1 billion.

True, the typical kind of investor in VC fund include long-term players, such as endowments, insurance companies, pensions and other types of institutions. And, if history is any guide, VC returns can be lucrative.

But, if you look deeper into the figures, you'll see that there is a flight to quality. That is, the tier-1 VCs are grabbing most of the investment dollars. For example, Kleiner Perkins raised a $700 million fund and Foundation Capital scooped up $750 million.

Despite all this, there could be tough times for the VC industry. Some of the less-noteworthy firms may disappear. More important, if returns continue to lag, it seems inevitable that even the larger firms will eventually feel the pain.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

If you have been following the alternative energy saga alongside ridiculous oil prices going from rising to high to astronomical, you've run across the name Tesla Motors. Tesla is a venture capital and privately funded auto maker that produces a high performance electric powered sports car.

The Tesla Roadster and soon to be sedan are now both now going to be manufactured in California, or so a report in the San Francisco Chronicle and elsewhere are noting. Governor Schwarzenegger included some incentives that have kept the electric auto maker from moving manufacturing to New Mexico (besides the Governator ordering one unit for himself). But it appears that the State of California is giving it more than mere tax incentives.

It appears that this is going to get equipment leases from the state, as well as additional grants. What is interesting here is that this gets the company even further on the map. There have been recent reports that Tesla was in the market for another huge financing. Whether or not that comes about now is not certain. Other reports show that the company may even supply battery units to Daimler or other car manufacturers.

What is becoming fairly certain is that Wall Street expects to see Tesla file for an initial public offering. As capital intensive as these businesses are, the company needs to have a steady vehicle (no pun intended) to be able to raise the capital it needs.

Think of the good news.... At least one US auto manufacturer will be considered cool.

Most private equity firms hunt for stable companies with stable cash flows that are either cheap or inefficiently operated. These companies can then be resold for more money or taken public, or the strategy can fit into the Warren Buffett time frame of "forever." Biotechnology has long been the realm for only public companies, but that is changing.

Private equity firm Warburg Pincus has already made some biotech plays that seemed to be a harbinger of the trends here, and even more so when you consider foreign drug companies buying US-based biotechs on the cheap with that US Peso of a currency we have.

A new fund called GANIC Pharmaceuticals has been launched this week, with Warburg Pincus as the main backer. the private equity firm made an initial investment in GANIC from the Warburg Pincus Private Equity X, L.P., a $15 billion fund which closed in April. As of now, we do not have any exact launch figures for the size of the investment that was given to GANIC.

GANIC's management is all former senior executives of MedPointe Pharmaceuticals and the company will will focus on building a substantial enterprise by acquiring revenue generating companies, portfolios, and/or products and by investing in innovation and acquiring pipeline development assets.

Read more at BioHealthInvestor.com for estimates of the size and strategies that the fund may employ.

LinkedIn is the social networking operator that just about every business person has received an invite to join from at least one person they know.

The company issued a press release this morning noting that it has secured $53 million in additional funding in a capital raise. This was its fourth and largest round of funding and is said to value the company north of $1 billion. What is perhaps more interesting than anything is that the finding was from a private equity-led group rather than from venture capital. Bain Capital Ventures, the VC unit of Bain, led the financing with additional reinvestment from the company's existing investors:

• Sequoia Capital,
• Greylock Partners,
• and Bessemer Venture Partners.

Over 23 million professionals use LinkedIn to keep in touch with old contacts, to reach new contacts, to problem-solve, and more.

To top matters off, CNBC hosted the head of the company, Dan Nye, earlier this morning and the hint of going public was much more than a hint. It seems like you can probably expect an S-1 filing with the SEC in the relatively near future if things continue, although that timing could be later in 2008 or into 2009 or even never. But the 'we are going for valuations much higher than this' line was a hard one not to notice. Personally, I'll go ahead and 'bet the over' that we see an IPO filing in the coming months as long as market conditions don't go further awry.

State Street Corporation (NYSE: STT) has a report out showing various 2007 private equity returns. While the numbers are backward looking and do not indicate anything for tomorrow, the numbers are still staggering considering all of the problems that started hitting private equity firms last year.

The State Street Private Equity Index posted its returns for the index date December 31, 2007 and it still shows a long-term return that is higher than the traditional equity markets.

The index is based on the latest quarterly statistics from State Street Investment Analytics' Private Edge Group. It is a detailed analysis of private equity investments for a diverse client base covering public and private pensions, endowments and foundations, representing more than 4,000 commitments totaling more than $160 billion.

Continue reading the full report at 247WallSt.com.

It appears that the world of porn is getting more attention from private equity and venture capital investors. And, no, it isn't that private equity executives and deal makers are spending more time looking at porn than they are negotiating deals. (Well, maybe.) More importantly, a big investor in the space has won an award and may be opening a floodgate of capital

AdultVest is a private equity venture that we covered on its launch earlier this year. The company concentrates exclusively on adult industry investments, mergers and acquisitions. So far, its initial numbers are pretty stellar.

It claims to have some $7.9 billion in "available capital" to invest in adult themed businesses, and $286 million of that was raised "within the last 7 days." It also claims to have 3,809 registered investors, with 53 of those signing up in the last week. (This data is from the group's homepage.)

The big news is that AdultVest was just selected by Alternative Investment News as one of four funds nominated for the "Hedge Fund Launch of the Year" award. And last month, the company announced it was acquiring iPorn.com.

Reading through the earnings release that Rick's Cabaret International Inc. (NASDAQ: RICK) produced earlier today, you might be tempted to conclude that adult entertainment is immune to a slowing economy. On the other hand, the incredibly poor recent performance by Playboy Enterprises inc. (NYSE: PLA) might make you conclude that the gathering slowdown could hurt this sector.

There are a number of reasons that the investment community is trying to get into and make money from porn. The most obvious one is that you are reading about it right here right now.

PurePlay has announced the closing of Series C equity financing round for $15 million. The company claims to be the first and the largest online, legal non-gambling poker site with a record 1 million users and to-date has given away $3 million in cash prizes. The funding will allow PurePlay to increase marketing and expand infrastructure to handle the rapid growth.

Investors include Bay Partners, Ron Conway, James Joaquin, and other Silicon Valley investors. Ron Conway formerly headed Angel Investors LP and is currently an independent angel investor. He wrote "The Godfather of Silicon Valley" and, notably, he sits on the boards for Facebook, Plaxo, Anchor Intelligence, Associated Content and Zappos. He was also an initial investor in Google. James Joaquin funded When.com, presided over OFoto and Xoom and acts as a venture partner at Bridgescale Partners.

Maybe this company doesn't even need the potential regulatory loosening up that has been proposed by Barney Frank.

GodTube has reportedly received a $30 million investment from hedge fund GLG Partners, according to PaidContent. The news came on Sunday, unsurprisingly.

GodTube is a quickly growing Christian online video sharing and social networking website and previously received $2.5 million in funding, some from private investor Norm Miller of Interstate Batteries.

The site now has 2 million users per month and was launched less than a year ago in Dallas. CEO Chris Wyatt formerly acted as an executive producer at CBS.

While $30 million sounds like a massive amount, the costs of broadband make it a normal investment for comparable video sharing sites. Recently, GLG invested in digital media companies Glam Media and Spinvox. This round of funding for GLG Partners is $150 million.

Also according to the article in PaidContent, GLG Partners and GodTube each declined comment on the rumored investment.

Israel Cleantech Ventures (ICV) has closed its capital raise at $75 million, according to Reuters. The original target for the fund focused on clean technology exceeded its target of $60 million and they had to turn away additional investors.

Specifically, the fund will focus on Israel based or related high growth clean technology companies in sectors such as alternative energy, water conservation and purification, emissions reduction, and technologies that allow businesses to operate more efficiently and more environmentally friendly. Funded in 2006, ICV closed its first round of funding, raising $15 million in January 2006. The Globes in Israel reported that this was above target as well.

Funds came from institutional investors as well as family funds in the U.S., Europe, and Israel, such as Robeco Private Equity, a Netherlands-based asset manager, and Piper Jaffray, a U.S. financial institution.

The fund has completed seven investments, including Aqwise (waste water treatment), CellEra (fuel cells), Citrine Renewable Energy (landfill biogas treatment), Emefcy (energy production from wastewater), Metrolight (energy efficient lighting), Project Better Place (electric vehicle infrastructure), and Pythagoras Solar (solar energy).

Jon Ogg is an editor and producer for the Special Situation newsletter for 247WallSt.com.

Quaker BioVentures closed its second fund that focuses on life science companies in the Mid-Atlantic region at $420 million, beating a target of $120 million.

The first fund closed for $280 million and invested in 24 companies. The fund has been successful, with Amicus Pharmaceuticals going public last May, while Eximias and MedMark were each acquired in spring of 2006. BioRexis Pharmaceutical Corp. and Precision Therapeutics are pending acquisitions.

The second fund has already invested in five companies including Argolyn BioScience, Diasome Pharmaceuticals, EKR Therapeutics, Optherion, and Transave. Quaker's partners for the fund include Sherrill Neff, Brenda Gavin, Richard Kollender, Ira Lubert, Adele Cirone Oliva and Dr. Matthew Rieke. The limited partners for the second fund have not been disclosed, however, Thomson Reuters reported that the Pennsylvania Public School Employees' Retirement System and the Pennsylvania State Employees' Retirement System have invested.

Jon Ogg produces and edits the Special Situation Investing Newsletter for 247WallSt.com.

While venture capital investments are still strong, the rate that VC's are putting funds into ventures appears to be slow. A MoneyTree Report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA) based on data provided by Thomson Reuters shows these trends today.

Investment levels and deal volume dropped, but the report says that venture capital remains strong with deep pockets this quarter with what is still the fifth highest level of investment since 2001. Venture capital investments totaled $7.1 billion in the first quarter of 2008, down 8.5% from last quarter 2007 of $7.8 billion. Deal volume also decreased slightly, down to 922 deals from 1,045 deals.

What industries are taking the bulk of the cash? Life Science (which includes biotech and medical devices) took a third of total cash at $2.3 billion and 24% of deals at 220. The Clean Tech center took $625 million in 44 deals, a 6% dip in investment levels from last quarter. Internet-specific companies tagged $1.3 billion in 195 deals, down 7% from last quarter. Semiconductors saw investment levels going up to $566 million from $458 million. The quarter also saw a trend of decreasing investment levels in companies receiving their first-time financing. Companies receiving first-time financing received $1.6 billion in 294 deals, down from $2.2 billion on 360 deals. Media/Entertainment is the only industry seeing a jump in first-time financing.

This also shows the stages on top of the industries. Seed/early stage companies dipped to $1.7 billion with an average deal size for seed being $3.6 million and $5.7 million for early stage companies. Expansion stage financing stood unmoved at $2.9 billion with an average deal size of $9.0 million. Investments in late stage deals also dropped, hitting $2.6 billion with an average deal size of $9.6 million.

Jon Ogg is a producer and editor of the Special Situations newsletter for 247WallSt.com.