Nanotech: Money Pit or Moneymaker?

Like Cientifica, Lux looks at what seem to be discouraging numbers and takes away a cautious sense of optimism that financing activity in nanotech may pick up in the next couple of years. But much will hinge on the success of the next few nanotech IPOs that make it out of the gates.

"In the most likely scenario, we think one or two nanotech start-ups will conduct successful IPOs by mid-2006, driving total VC funding up to $700 million in 2008 with slight declines thereafter," Nordan wrote. "More IPOs next year would amplify this rise and fall, driving nanotech VC to nearly $1 billion [funding] in 2008 with a bigger decline afterward. A continued absence of IPOs will mean single-digit annual percentage increases in nanotech VC, such that it does not exceed $525 million through 2010."

So far, there haven't been many investment opportunities in nanotech, public or private. But it took well over a decade between the rise of the Internet and Netscape, its first big IPO. It's starting to look as though the next few years will be crucial in determining whether nanotechnology can deliver on its promises.