Government makes a lousy venture capitalist, a continuing series.
From the Wall Street Journal:
At its peak, tiny Fisker [Automotive] was one of the largest U.S. venture capital backed companies ever. Its founders raised more than $1 billion from highly regarded Silicon Valley venture funds. …
Its biggest single investor was the U.S. In 2009, the Obama administration's interest in cultivating electric cars got the untested Fisker loans totalling $529 million, more than the company had initially requested, and an amount that encouraged private backers to chip in more funds. At one point, backers valued the company at $1.8 billion.
The company had applied in 2009 for a $169 million loan from a $25 billion program set up in the wake of the financial crisis to boost alternative-energy vehicles. Energy Department officials recommended that if Fisker was willing to build in the U.S., the agency would fund the development of the Karma and the company's proposed second, less expensive model, according to people familiar with the matter. …
Today, Fisker looks headed toward a bankruptcy restructuring. The U.S. could wind up owning all or part of the company's assets because its loans were backed by Fisker assets. So precarious is the company that the U.S. seized $21 million this month from Fisker in anticipation of a default.