Is it OK to invest in nanotech again? With the Internet getting red-hot again and other emerging technologies, such as the next generation of robotics represented by iRobot ( IRBT), receiving warm welcomes in the markets, nanotech is technology's ugly duckling that is taking forever to mature into a big fat swan. Public nanotech plays remain as volatile as ever, with Nanophase ( NANX) down 41% from its 2005 high and Altair Nanotech ( ALTR) down 65%. Meanwhile, Punk Ziegel's Nanotech Index is down 17% this year. But in some ways the bellwether nanotech stock is one that isn't a stock at all: Nanosys, a company that once came close to creating a nanotech stock boom. Nanosys drew a lot of attention last year when the Palo Alto, Calif., company filed for an initial public offering that was to take place earlier this year. All Nanosys wanted was $115 a share and some of the credibility an IPO can bring. Coinciding with the buzz that nanotech was the next big thing, the company's offering was widely seen as an acid test for Wall Street's interest in the emerging technology. Then Nanosys pulled the plug on its IPO a few months later, telling the Securities and Exchange Commission that the move was "due to the volatility of the public capital markets." Nanosys' filing noted that it had the option of undertaking a subsequent private offering if it decided another stab at the public markets wasn't in the cards. And sure enough, earlier this month Nanosys announced a $40 million round of private investment. That's much smaller than what it sought in its failed IPO, but added to the $54 million in private investment that it has raised to date, it makes for a significant chunk of private equity. The new investment, led by El Dorado Ventures, included the participation of new and existing investors such as Wasatch Advisors, Lux Capital, Harris & Harris, In-Q-Tel, Intel Capital and Polaris.