A little detail from biofuel company Mascoma’s IPO filing on Friday got me thinking: Mascoma says government grants constituted “86 percent of our revenue” while “product sales and other service agreements constituted 14 percent of our revenue.” Greentech has been like few other tech sectors in that many of the companies are relying heavily on government support for business, from biofuels to clean power to nuclear to smart grid. But at the same time, a variety of companies are finding that, if they are able to stand on their own two feet, that accepting government support can sometimes be the wrong choice. Investors in the now infamous solar maker Solyndra think that the $535 million loan was actually part of Solyndra’s undoing, according to the Wall Street Journal. Those investors say that the loan added high fixed costs for the DOE-backed factory, and it was a disadvantage when the company wanted to raise more money from private investors, because the government had senior debt that would be paid back first (mostly, except for Solyndra’s final restructuring funds)...more
Obamanomics: Government grants = 86% of revenue.
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