Revolving door

Tony Blair: Tony Blair is wearing a new cap – that of the venture capitalist. Britain’s former prime minister will advise green-tech investment firm Khosla Ventures. The agreement offers something for both sides. Blair’s trip to California buffs his reputation and potentially lines his pockets. Meantime, Khosla gets an understanding of governments – a vital requisite in heavily subsidized energy markets.

Several former politicians have followed this path. Al Gore offered direct inspiration. The former US vice president joined VC firm Kleiner Perkins as a partner in 2007. Gore’s interest in technology is deep - after all, he invented the Internet. He’s also a board member at Apple and senior advisor to Google.

Moreover, his proselytizing on the need to limit global warming makes him useful to the firm’s green-tech team. He has helped open doors in government and sparked interest among potential investment candidates.

This experience hasn’t been lost on Khosla – whose founder Vinod Khosla formerly worked at Kleiner Perkins. Of course, the revolving door between government and industry is nothing new. But energy makes it revolve particularly well. Politics plays a huge part in energy markets – exploration and production is subsidised, oil fields and refineries protected, and emissions increasingly taxed.

The state’s role is particularly important for green-tech companies. While Khosla says it’s only interested in backing firms that can prosper away from the government teat, many innovations would be uneconomical without direct aid, tax breaks or regulatory incentives. So the role Blair can play is quite important. Khosla puts it best when he bluntly states: “We don’t really understand government.” If Blair can open doors in fast growing China and India and convince these countries to replace a portion of their dirty coal plants with cleaner technologies, or reduce their emissions using technology from companies in Khosla’s portfolio, both advisor and investor will gain public prestige - and with it filthy lucre.