Since the administration's announcement in March that $2.4B would go to hybrid plug-in car initiatives, green VCs have been trekking to DC with their hats in their hands.

No doubt, the turn of events makes many in the traditionally libertarian VC ecosystem uneasy. One possible exception are the partners at KPCB, who have a longer history of governmental cooperation, typified by their decision in 2007 to bring Al Gore on as a partner.

Ray Lane, one of the most even-keeled VCs in the Valley, prescribes a dose of sobriety. He notes that many of the large-scale, high-tech developments of the last century, from automobiles to the Internet, had their origins in government-funded projects. His take is that Uncle Sam's involvement is a promising temporary treatment for the cash-flow crunch, but anticipates a return to more private system once the economy recovers.

So far, Tesla and Fisker and Bright Automotive have been leading the publicity charge to win DOE dollars, with bids in the $350M to $400M range. KPCB has a small stake in Fisker, and last year teamed up with Rockport Capital and Norweigen car maker Think Global to form a mass-market plug-in car company called Think North America.