Everybody is talking about how new breakthroughs—in energy and elsewhere—requires helping startups through the Valley of Death. This is a well-intentioned but dangerous policy.
The valley of death refers to financial risks that start-ups face as they struggle to grow from small teams to going ventures. The dip of the valley refers to the debt—the negative balance sheets—that companies experience as they invest money now in hopes of making it back upon success (the accompanying figure provides a general description).
Given the difficult economy, large corporations are laying off workers or simply not hiring. As a result, entrepreneurial ventures are becoming more popular than before. In response, many universities—including my own, the University of California at Davis—are teaching entrepreneurship not as a study of a heroic few, but as a set of skills that every student should acquire.