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The California Clean Tech Open (CCTO) stands out as one of the biggest business plan competitions around. Each year, researchers from some of the most prestigious labs in the country meet with entrepreneurs who can dream up ways to turn their work into gold. Out of 45-50 finalists in the CCTO start-up boot camp, five winners receive cash and professional services totaling around $100,000 each, but each finalist comes out with a fully fleshed out business plan and a lot of valuable connections. (You can enter this year’s competition here.)

The competition began with a bunch of MIT alumni getting together to drink and discuss how to save the world for fun and profit. Mike Santullo, who had founded and sold the company that grew into Yahoo! Mail, was a regular at these sessions and in 2005, he and Marc Gottschalk decided that they would find ways do just that. Eschewing the profit part of the equation, themselves, the two incorporated CCTO as a non-profit, and roped in VC firm Draper Fisher Jurveston (among others) to back the competition.

We took the opportunity to talk to Steve Jurveston of DFJ about the his company’s involvement: With its partner fund, DFJ Element, Draper Fisher Jurveston competes with Kleiner Perkins for the title of most active investor in clean tech. Our conversation ranged from the contest to Steve’s fascination with microbial engineering companies that have figured incredible ways to help the environment by playing God.

VB: Why did you choose to sponsor the California Clean Tech Open contest?
SJ: Two main reasons: We like business plan contests as a way to encourage entrepreneurship and cast a net very widely to a population that might not have access to venture funds. The second part is that we really like Mike Santullo. We find that in general these kinds of venues create opportunities to find entrepreneurs that wouldn’t otherwise find their way to venture capital: they might not necessarily have the Rolodex, they might be overwhelmed by the number of venture firms out there and their ideas might not get as much visibility as they otherwise should.

VB: DFJ has been investing in clean tech since 2001; why do you think it’s taken so long for the VC community join the game?
SJ: I don’t necessarily agree with all of that, but if you’re asking why didn’t it occur in 2001 and 2002, there are a couple of factors that tend to play out as a common pattern. When you look at any new industry, and I would say that the same pattern played on in 1994 and 1995 with the Internet and in 2000 for nanotech, you find a handful of firms that are willing to take charge in a new investment wave, but the bulk of firms tend to come in once there’s been some liquidity, so you get things like EnerNoc (ENOC) going public last year and the visibility in the press.

Also, there’s usually a skills-related factor in any sector, especially nanotech, but even the Internet. It usually requires background knowledge to look at the deals, and if it doesn’t fall into the existing industry buckets, it