Entrepreneurial luminaries Vinod Khosla and Richard Branson announced that they are joining forces in an effort to develop and produce advanced biofuels.

Khosla, managing partner of Khosla Ventures and co-founder of Sun Microsystems, and Branson, founder of Virgin Fuels and other components of a business empire organized under the Virgin brand, are giving their backing to Gevo Inc., a Pasadena-based company seeking to transform biomass into butanol fuel on an industrial scale.

The participating parties declined to divulge the size or the terms of the investment. However, an analyst at Khosla Ventures called it "a significant sum." Executives from Khosla Ventures and Virgin Fuels will join Gevo's board of directors.

Gevo was co-founded in 2005 by Francis Arnold, professor of chemical engineering and biochemistry at the California Institute of Technology, and two of his academic peers. Gevo owns the exclusive rights to all biofuel technology developed in Arnold's Cal Tech research labs.

The retention of Khosla Ventures and Virgin Fuels will provide the small start-up firm with substantial financial and managerial backing.

One-quarter of Khosla Ventures' portfolio is in high-efficiency, low-pollution technology, while Virgin Fuels has made multiple biofuel investments since Branson created the company last year, according to the firm's Web site.

Although one shouldn't underestimate Khosla or Branson's entrepreneurial spirit in a business sector that has enormous profit potential and is getting crowded with major players, they both claim that social and environmental issues are also motivating their interest in biofuels.

"Through Virgin Fuels, we look for investments in companies, such as Gevo Inc., that will help to significantly reduce net greenhouse gas emissions, improve management of scare resources, and have a long-term positive impact on our society," Branson said in a press statement.

Branson has said that he hopes his fleet of commercial and private planes will one day run on biofuel.

Gevo CEO Patrick Gruber said he expects his company to eventually grow into the No. 1 biofuel company in the world. Currently, Gevo is focusing on the production of butanol, a biofuel that has a similar production process as ethanol but is more structurally similar to gasoline. This attribute allows it to run in some combustion engines without any mechanical modification.

With butanol there is no need to make exact fuel-to-additive mixtures like there is with ethanol. Butanol also has a higher energy content per unit than ethanol does, allowing butanol users to drive more miles on a gallon of fuel.

Perhaps most importantly, Butanol doesn't soak up water the way ethanol does. This means that butanol could travel through existing pipeline infrastructure, unlike ethanol, which must travel more expensively via truck or train.

The company has a long way to go until Gruber's dream of industrial-scale butanol production comes to fruition. Gevo still must prove that its technology works. According to Gruber, the next major step for Gevo is to build a pilot butanol plant.

Gruber says he doesn't know when this will happen. "I don't like boxing myself into outright costs or time-frames. All I can say is that we'll do it faster than anyone will expect."