Category: Investment/Entrepreneuring

An extensive article in the UK-based Investors Chronicle ("The Next Big Thing Will Be Very, Very Small", by Bill Bows, 1 March 2002) offers some pretty fantastic numbers for the potential nanotech market:

The market for products and processes supported by nanotechnology is estimated to be worth between $20bn and $50bn. Technology-focused investment bank Evolution Capital believes this could grow to $150bn by 2005 and to more than $1trillion by 2010. Mark Welland, professor of nanotechnology at Cambridge University, proclaims: "In the past 30 years the computer chip has revolutionised the way we communicate. Over the next 30 years we will see a revolution of an even greater dimension through nanotechnology."

The article goes on to state:

By bringing the manufacturing process down to the nanoscale, huge advances are possible in creating products that are more versatile, more energy- efficient and more powerful than those currently available. Nanotechnology promises to transform a wide range of scientific fields from precision and electromechanical engineering and mainstream biological and chemical sciences, to medical research.

The remainder of the article takes a look at the venture investment environment in the UK and compares it to developments in the U.S., and concludes with some sound advice:

However revolutionary the advent of nanotechnology appears, hype, from any source, should be avoided, says [a UK venture capitalist]. "We need to deal in reality not hype," he says. "If you want to create sustainable shareholder value you have to be able to deliver something that is going to perform and grow going forward."

An article by Josh Wolfe, a partner at venture capital firm Lux Capital, appears in Forbes Magazine ("A New World Is Born", 14 March 2002). His take: "Don't confuse the stock market with the real world. The tech stock balloon is busted, shattered, gone. But the technology revolution is just getting started. Looming just ahead is what may well be its most exciting phase–nanotechnology. This will be bigger than the Internet and more far-reaching. It will create vast new wealth. It will destroy a lot of old wealth. And it will shake up just about every business on the planet."

A commentary in Red Herring Magazine ("Reality Check: Nanotech's boosters are getting ahead of themselves", by Stephan Herrera, with additional reporting by Om Malik, 26 March 2002) opines that "Some new statistics on nanotech may be a bit optimistic." In particular, Herrera casts a cold eye on figures issued in a recent report by the NanoBusiness Alliance (NBA) that give the impression, as he puts it, that "nanotech represents an immediate opportunity, not just a distant target. In a new survey, the NBA asserts that the field is already a $45.5 billion industry that could grow to $700 billion by 2008. . . . The NBA concludes that VCs will invest more than $1 billion in nanotech this year. How the field has grown–or has it?" Herrera wonders if "these numbers might just be wishful thinking, intended to stir up media hype and investor interest."

The article quotes Nathan Tinker, an NBA cofounder and the survey's author: "Mr. Tinker says there's no harm in interpreting nanotechnology broadly. 'I tried to consider the whole range of nano,' he says. In fact, he included sales from products that most nanotech experts would not even consider to be nano, like microelectrical mechanical systems."

Herrera considers the $1 billiion investment figure by VCs to be even more fuzzy, and notes that even some NBA figures are distancing themselves from the number — such as Josh Wolfe, an NBA cofounder and "a leading voice in nanotech."

An article in the San Jose Business Journal ("VC Draper still rolling the dice", by Sarah Lacy, 1 March 2002) doesnít deal much with nanotechnology per se, but does offer an interesting profile of venture capitalist Tim Draper and his firm of Draper Fisher Jurvetson, which is one of the VC firms leading the charge (cautiously) into the emerging nanotechnology sector.

According to a press release (27 February 2002), In Realis, a Silicon Valley consulting firm, has released a free report titled A Critical Investor's Guide to Nanotechnology. Steven Glapa of In Realis writes "In Realis has taken a hard look at the current state of the nanotech market to cut through the mounting hype and offer a clearer vision of the business prospects in the field. Our investigation has covered more than 400 recent research publications, government grants, and patent applications; over 225 companies worldwide that are actively engaged in nanotech commercialization; and adoption prospects in 350 primary industry sectors. After calibrating this 'library work' via in-depth discussions with researchers from both academia and the private sector, we have assembled a report designed for prospective investors and entrepreneurs that offers a concise but thorough orientation on the current state of the field, its likely economic impact in the medium term, and specific recommendations for the best applications of private-sector funds and talent in the near term. The report is available free of charge at http://www.inrealis.com/nano."

An article in the Denver Post ("Group has big plans for tiny technology: The NanoBusiness Alliance targets Denver", by Jennifer Beauprez, 21 February 2002) reports the NanoBusiness Alliance (NBA) has picked Denver as one of three cities to start its nationwide push to expand. According to the report, NBA representatives will meet with Denver Mayor Wellington Webb on 5 March 2002 with hopes of creating a loose network of local business leaders, university researchers, entrepreneurs, investors and government officials who can expand the industry.

A few more recent examples of the mounting interest in the business and investment community in the potential for nanotech as "the next big thing":

• An brief segment in an article in the London-based Financial Times ("Will Silicon Valley become Nanotech Valley?", by Tom Forenski, 16 February 2002) quotes Tim Harper of CMP Cientifica, who, according to the article, says that "Although there are clusters of nanotechnology companies around certain universities . . . such clumping will eventually concentrate around sources of venture capital. And since Silicon Valley is the world's greatest concentration of venture capital, it could become an important seed bed for what will, at some point, be a massive industry."
• brianwang sent notice of an extensive article in HBS Working Knowledge ("Big Things Ahead for Small Technology" by senior editor Martha Lagace, 18 February 2002), a publication of the Harvard Business School, that urges cautious interest: "Nanotechnology could be the next big investment thing–maybe. Experts say smart investors would be wise to dip their toes into tiny technology, but not jump straight into the pool just yet." The article quotes venture capitalists Josh Wolfe [of Lux Captial], Jason Friedman [of JP Morgan], and others, who spoke at Venture Capital and Private Investment conference on 3 February 2002 at Harvard Business School. The article concludes with a quote from Friedman: ìYou have to pick the spots and places where you think there are good companies. Is [nanotechnology] an interesting technology? Absolutely. Could it be the next big thing? Maybe.î

from the well,-maybe dept.
An extensive article on the Small Times website ("French system ensures good research translates into marketable products", by Genevieve Oger, 21 February 2002) describes another French effort to centralize and bureaucratize technological innovation: the French National Network on Micro and Nanotechnology (RMNT in French), a system that (purportedly) "identifies and evaluates the most promising technologies, the ones most likely to end up on the market." According to the article,

Here is how it works. A research lab and a business must team up to work on a specific project. The public/private consortium can be made up of three or four entities, as long it includes a company interested in making the product if the research succeeds. The consortium then hands in a proposal to the 17-member RMNT orientation committee, made up of businesspeople and researchers.

Two members of the committee are put in charge of examining the proposal and drawing up an internal report in tandem with two experts chosen from the specific field. The committee, which is made up of members from around the country, meets in a central location three times a year to evaluate all the proposals. . . .

The RMNT works on a tiny budget. It does not directly fund micro and nanotechnology projects. Its job is to rate them and decide whether they are worth funding. The label of quality they stick to a proposal will allow the business-lab team to seek government funding either through the Ministry of Research or the Ministry of Economics and Industry. The goal is to have funding go to projects that have been evaluated and chosen by specialists rather than ministry staff, who may not have the same degree of expertise.

See this Nanodot post from 14 January 2002 for more info on the French effort to create a centralized technology incubation center at Minatec in Grenoble.

from the caveat-emptor dept.
Marc Rothchild writes "Whether you are a company executive, investor, senior technologist, researcher, or entrepreneur, it is becoming increasingly timely and difficult to remain knowledgeable of all things `Nanotech'. To keep those that are interested on the pulse of the accelerating developments in the exciting Nanotechnology community, San Francisco Consulting Group has launched Nanotech Business Update (NBU), a periodic electronic mailing designed to inform, educate, and discuss Nanotechnology at least twice every month by getting reliable straight talk, news and insight without any hype or exaggeration. To receive this Update, please fill out the free submit form at http://www.sfcgcorp.com/sfcg2.htm or send an email to [email protected] with you Name, Company Name, Title, and email address"