Tesla's IPO: A New Test Drive for the Old VC Model

Last Friday, buzz about an imminent initial public offering for electric car startup Tesla Motors hit the Internet, courtesy of two anonymous sources familiar with the plans who spoke with Reuters. As with several previous stories about Tesla's possible plans for a public offering, however, the company has declined to comment.

If and when Tesla goes through with its long-discussed goal of going public, it could be the biggest and possibly the first public offering for a U.S. car company since Ford Motor's IPO more than 50 years ago. The event will also offer a glimpse at the role IPOs will play in the nascent green car market. The question remains: Is the classic venture capital model—invest early and find a big exit in the form of an acquisition or IPO—viable for this sector, or will a green-car IPO be more about feeding big capital needs and branding?