Losing politician Steve Westly heads — where else — into venture capital

Steve Westly, the former state controller and eBay executive who failed in a gambit to become state governor, is headed back to Menlo Park, the center of Silicon Valley’s venture capital industry.

He may have lost the California Democratic primary to Phil Angelides, but he’s joining Angelides (who won the primary but who subsequently lost to Schwarzenegger) in retreating back to the next best thing — a career in the sexy world of venture capital.

Just like Angelides did a couple of weeks ago, Westly is forming his own investment company. He’s calling it the Westly Group — “to bankroll environmentally friendly business ventures ‘and make sure California is ground zero for the clean technology revolution,'” reports the Sacramento Bee.

Westly’s company will have offices at the big-name venture firm Kleiner Perkins Caufield & Byers, the backer of Google and many other companies, and which has stepped up investments into green technology. According to the Bee:

In an informal relationship with Kleiner Perkins, Westly will be a co-investor, adviser and roving public speaker on environmentally friendly technologies.

Reminds of the appointment of Colin Powell to Kleiner a year and a half ago.