LiveFuels CEO Lissa Morgenthaler-Jones is one of the few female CEOs in Silicon Valley. But she was blessed with a good start. Her father is David Morgenthaler, known by many as America's oldest living venture capitalist.

"Both of my parents are from the depression era," says Ms. Morgenthaler-Jones, who grew up in Des Moines, Iowa. "We value hard work. This is a family where father, uncle, and grandfather fought in a world war. The women did more than keep the home fires burning."

Friend Jeff DePew, CEO of Lion Cells, observes that Ms. Morgenthaler-Jones is one of those who gets noticed when she walks into a room. "Some people might be overwhelmed because she is so dynamic."

Ms. Morgenthaler-Jones majored in economics at Princeton University but "had no freaking clue" what she was going to do with her life. After graduating, she spent a "Bohemian" year in New York working at a television station and putting her dance training to use before "settling down," as she puts it. She worked briefly on Wall Street at First Boston, an investment banking firm, before deciding that all the action was really in California.

"I had been around the world at that point, I'd been to 30 countries, and I don't think I was ever as scared as that flight coming out to California, where my three brothers and father were well-known," she remembers.

Sticking with finance, she was hired by a startup investment bank, and won national recognition as the top mutual fund manager. Then she started her own investment advisory and money management business—before cashing out and turning her attention to supporting Arnold Schwarzenegger's campaign to get California Governor Gray Davis recalled.

After the recall, Ms. Morgenthaler-Jones started a cleantech venture capital fund, Arare Ventures, but quit that before raising any money. She next turned to something completely different and learned about turning algae—animal waste—into fuel.

That led to LiveFuels, officially launched in 2006. She raised $10 million from the Quercus Trust and individual investors in May 2007. Today, LiveFuels is collaborating with government scientists at U.S. laboratories and academic institutions in hopes of making algal biocrude competitive with fossil fuels. Deadline: 2010.

If Americans thought pump prices were getting pretty rich, the calculus on algae-based fuels should give them pause: they're estimated to cost anywhere from $160 to $1,000 a gallon.

But Ms. Morgenthaler-Jones reckons it should be possible to get production costs down so algae can replace, or at least supplement, current fuel sources.

Let's hope progress in alternate fuels is faster than it is for women CEOs in the Valley. "It gets a little easier day by day," she says, "but only by nanometers."

—Adena DeMonte