Vinod Khosla on money to be made in cleantech (Dealscape - Private capital)

"More money will be made in cleantech than in traditional areas of Silicon Valley -- by far," said cleantech investor Vinod Khosla at the AlwaysOn Summit at Stanford University on Thursday. "While the failure rate in cleantech is likely to be high, the wins will be bigger."

His remarks come on the heels of cleantech executives complaining to Congress about the difficulties of securing financial backing.

Also, earlier this week, a study conducted by Ernst & Young LLP released Wednesday shows that U.S. VC investment in cleantech companies in the second quarter of 2009 reached $572 million, a 73% increase in terms of capital from the first quarter. In fact, last quarter was the second-highest quarter for cleantech investment on record, according to E&Y.

 "The area where a dramatic leap forward is the most needed -- and perhaps the most feasible -- is carbon sequestration, Khosla said, where scientists change the chemistry of today's fuels and building materials so that they emit less carbon," reports The Wall Street Journal's Venture Capital Dispatch.

Khosla Ventures is reportedly near to closing a $1 billion fund, which would be the biggest raised this year. - Mary Kathleen Flynn