More on Goldman Sachs and Solyndra

While we are not completely shy of saying we-told-you-so, in the case of the players in Solyndra's fantastic rise and fall, we are more than happy to. Back in September we highlighted Goldman Sachs' key role in the financing rounds of the now bankrupt solar company and this evening MarketWatch (and DowJones VentureWire) delves deeper and highlights how the squid has largely stayed out of the headlines (what's the opposite of lime-light?) in this case despite its seemingly critical assistance and support from inception to pre-destruction.

MarketWatch: How Goldman played key role in Solyndra's rise

Goldman Sachs Group Inc. (NYSE:GS) , which Solyndra hired in 2008, helped propel the solar panel maker from Silicon Valley start-up to White House showcase. It solicited investors for the company with rosy valuation projections and helped Solyndra win a $535 million Department of Energy loan guarantee. And it positioned itself to earn underwriting fees if the company held an initial public offering.

The banking giant's name has come up in the course of the Congressional investigation that has followed Solyndra's spectacular downfall, but it's not the focus. Even so, the extent of Goldman's role helps explain how Solyndra catapulted from unknown start-up to secure more than $1 billion in private capital. That private backing was "absolutely" a factor in the government's decision to make Solyndra the first beneficiary of a DOE loan-guarantee program, said department spokesman Damien LaVera.

Goldman spokesman Michael Duvally declined to comment on most aspects of Goldman's work for Solyndra, as well as whether the company has been contacted as part of the federal investigation.

Investment banks often help promising young companies raise capital, deal with the government and prepare to go public. Goldman's role in Solyndra followed that standard script, but its client turned out to be anything but typical, as Solyndra's bankruptcy filing in September triggered a political tempest.

By the time Goldman got involved in 2008, Solyndra had already raised at least $300 million in equity and $93.5 million in debt, according to regulatory filings and research firm Dow Jones VentureSource.

That summer, as oil prices were at a record high, fueling interest in renewable energy, Goldman began soliciting investors for another round.

A private-placement memorandum viewed by VentureWire, which was shopped around in July 2008 by Goldman to prospective investors, stated Solyndra had long-term sales contracts that "allow for approximately $1 billion of sales from 2008 to 2012."

Goldman's involvement in Solyndra, and its lofty valuation projections, lent credibility to the company and helped rouse investor interest.

Goldman considered putting in its own money, but it decided to wait, because Solyndra had just completed its latest financing round, a person familiar with the matter said.

By early 2009, Goldman was Solyndra's exclusive financial adviser as it helped the company negotiate terms of its $535 million government loan guarantee. Emails from January 2009 show Goldman dealing directly with the Treasury Department unit that made the loan guaranteed by the Energy Department.

By that time, the market was already turning against Solyndra, because the price of a key material used by its Chinese competitors was falling sharply. That was clear to a Goldman Sachs research analyst, Michael Molnar, who in October 2008 warned clients that the risk of oversupply in the market would "soon become a reality" as subsidies shrink and financing tightens.

One of Solyndra's competitors, Nanosolar Inc., sent an email to an energy department official in February 2009, questioning "whether the DOE loan guarantee program is suitable as a 'bail-out' program for failing private manufacturers."