Category: Investment/Entrepreneuring

from the sifting-wheat-from-chaff dept.
There has been a surge in the number and variety of articles in financial and investment-oriented media — some more successful than others at presenting the science and the potential and the pitfalls of nanotechnology research and development. Most spend a lot of verbiage trying to separate science from hype. Hereís a few examples:

• An item from Reuters News Service ("Nanotech Brings New Hope, and Hype, to Market", by Dane Hamilton, 12 February 2002) asserts that "a growing number of Wall Street specialists say the new technology could be a foundation for a new bull market, just as personal computers, biotech and the Internet underpinned previous rallies. Others say the field is way too early for widespread investment and is already being over-hyped."
• An article on the News.com website ("Breaking free from Newton", by Jennifer Fonstad, 5 February 2002) is generally enthusiastic: "For technology, the last half of the 20th century has been a march to miniaturization–make it smaller, make it faster, make it cheaper. While there are seemingly limits to the continuation of this march, a quantum leap to the world of the small may yet enable us to break through the barrier." Fonstad is a managing director at venture capital firm Draper Fisher Jurvetson. [Thanks to David Wallace Croft for submitting this item.]
• And Small Times weighs in with an article ("Investors see the reality behind the nanohype — and some nice pants", by Jayne Fried, 12 February 2002) that points up the accelerating trend in which companies in old-line industries try to reinvent themselves with the ënanoí label — and sometimes even some actual nano-scale technology.

from the Most-scientists-believe? dept.
A fairly decent investment-oriented article on nanotechnology appeared on the CNET News.com website ("Is small the next big thing?", by Tiffany Kary, 11 February 2002; the article also appears on the ZDnet website at http://zdnet.com.com/2100-1103-833739.html). As the article notes, "The revolution won't happen overnight, and even nanotechnology's biggest supporters acknowledge that the field could become the next craze–think dot-coms–in which hype outruns real application and business sense. Nevertheless, recent developments indicate that the science is progressing well beyond the "white paper" stage. For starters, the government, tech titans and venture capitalists are pouring money into the field, producing breakthroughs that have enabled several companies to make nanotechnology product announcements. These prospects have grabbed VCs' attention."

The article notes the increasing level of research activity, government and private financing, and interest by the investment community, and surveys important work by companies ranging from giants like IBM and Hewlett-Packard down to start-ups such as Nantero.

Looking farther ahead, the article makes the somewhat incredible claim that, while nanorobots are hypothetical, "most scientists believe there will be some form of "molecular assembler" within the next 20 years, and that the device will serve a concrete purpose." The article then follows a typical pattern in presenting of the ideas proposed by Eric Drexler, followed by the "grey goo" willies of Bill Joy, and the distancing dance skeptics perform when confronted with long-term possibilities of advance molecular nanotechnology. The article quotes Josh Wolfe of Lux Capital, a nanotech-oriented venture capital firm: According to the article, Wolfe said he has seen plenty of business proposals based on such ideas, but he considers them implausible.

"It's utter nonsense–thoughts that you can change the economy because you can manufacture things instantaneously at your desk by just hitting a button," Wolfe said. . . . As far as Wolfe is concerned, any technology based on the "Drexlerian vision of nanotech"–that is, the self-replicating assembler–should be put in its place. These far-out ideas should "promote ethical debates and get people involved," but "investors should not be looking at that type of thing," he said.

[Thanks to David Wallace Croft and Patrick Underwood for posting a notices about this item.]

from the Nano-hype,-nano-whining dept.
An article on the Small Times website ("Nanotech headed for historyís dustbin unless it cuts the hype, panelists warn", by Matt Kellye, 5 February 2002) recaps comments made during an investment forum at Harvard Business School by a four-member panel who make the dubious assertion that "the fledgling sector needs to start creating real devices to solve existing problems . . . Otherwise, nanotech could follow artificial intelligence or other technology fads that once flashed into the public mind, only to end up as niche ideas that never went mainstream." The article also described what seems to be a lot of impatient hand-wringing over a lack of perceived applications and short-term returns for nanotechnology investment.

Venture capitalist Josh Wolfe is profiled in Red Herring Magazine ("In Nanotechnology, Josh Wolfe Is at the Door", by Stephan Herrera, January 28, 2002). Wolfe is cofounder and managing partner of New York-based Lux Capital and its nanotech-investment arm, Angstrom Partners. Last year, Mr. Wolfe published his conclusions on the field in a 272-page report, issued by Lux in August 2001, which attempted to size up the global nanotech phenomenon. He also helped found the NanoBusiness Alliance, which has designs on becoming the industry trade group for nanotechnology.

from the listening-to-the-buzz dept.
An article on the investment-oriented 123Jump website ("Nanotech: New Buzzword in the VC Arena", by Vanya Maneva, 21 January 2002) presents an engaging if largely superficial overview of the current investment climate generated by the increasing interest — and hype ñ surrounding nanotechnology:
"[N]anotech seems to be getting ready for prime time. Researchers, private companies and government agencies all over the world have all been recently rushing to gain leadership in this exciting race. More importantly, many venture capitalists see nanotech as the next big growth area, and not wanting to miss the 'nano' wave, have seriously begun investing in it."
The author concludes: "While bullish on nanotechís promise in general, and confident that it will lure its share of investment dollars, scientists and analysts caution that the sector may be a long way from practical success. Nanotechís impact on the market will depend on which sectors it becomes important [sic] and when that is likely to take place."

Neil Gordon of Sygertech writes "Sygertech, CMP-Cientifica and nABACUS have released a white paper entitled "Tips for Bringing Nanotech Products to Market". While each nanotech company has its own unique circumstances and challenges, some of the things that can increase the chance of getting a customer to buy a significant quantity of nanomaterials, devices or applications are described. The paper can be downloaded at no cost from www.sygertech.com."

Editor's Note: In addition to the above item, you can also find an earlier white paper, "Five Ingredients for Financing Nanotech Ventures". Both documents, though brief, offer useful information.

An article in a special issue of Red Herring Magazine on the "Top Ten Trends 2001" names nanotechnology as one of the developing trends to watch ("Small Worlds: Nanotechnology wins over mainstream venture capitalists", by Stephan Herrera and Lawrence Aragon, 18 December 2001):
"Nanotechnology is coming in from the fringe. Once dismissed as just so much science fiction and Silicon Valley hokum, nanotechnology now represents no less than the next industrial revolution."

The article also quotes Richard Smalley of Rice University: "To the extent that there are solutions to practical problems like disease, feeding the world, and reconciling scarce energy resources with increasing consumption, a remarkable number of them can only be solved through nanotechnology."