The July/August 2006 issue of Small Times is now available (also as a 6 MB pdf), and includes statistics on nanotech venture capital in the various states of the U.S. The top ten (on page 38):
1. California 100.0 2. Massachusetts 29.1 3. Texas 8.1 4. Missouri 7.5 5. Michigan 6.6 6. North Carolina 6.4 7. Wisconsin 6.2 8. Arizona 5.7 9. Rhode Island 5.4 10. Maryland 4.9
This helps explain why Foresight is located here in California: there’s money here, and it’s interested in nanotechnology. VC money needs a relatively near-term return, but nanotech interest here extends to longer-term atomically-precise manufacturing as well.
More surprising than the rankings, to me at least, is the chart on page 42 showing U.S. nanotech VC dollars and deal numbers for the years 1998 through 2005. It shows a gradual increase — sounds right — but the ratio of dollar to deals varies widely, even alternating year-to-year for 2002 to 2005. Is this an artifact of small numbers, or is there some deeper reason for this swing? The waxing and waning of confidence? (Smaller investments tend to be for brand new companies.)
One VC is quoted to the effect that “There’s lots and lots of cash out there…The funding problem with many nanotech companies is they have cool science but no real, clear concept of a product or business model. There’s nothing worse than technology in search of an application.” Well, perhaps it’s not quite right to say there’s nothing worse, but it’s true that if you don’t have your product and business model figured out, it’s probably too early to go see a VC…except maybe Steve Jurvetson, who seems to like to know everything that’s going on. —Christine
