"This will help us scale up commercial manufacturing opportunities and pursue new opportunities," says Peter Garcia, Nanosys' CFO, who noted that the round was raised after it signed an agreement with Japanese electronics maker Sharp to develop display systems.

In many ways, news of the fresh investment was very good for Nanosys itself. But for the broader market -- and going back to that lingering image perception of Nanosys as a bellwether of nanotech itself -- it raised a different question: Why didn't Nanosys just try to go public again? After all, the markets are hardly volatile with regard to technology companies -- especially those with a track record of profits.

"A private round was easier to do in a relatively short period of time," says Garcia. "It doesn't preclude us from thinking about a public offering later on."

When Nanosys scrapped its IPO last year, many observers saw factors beyond market volatility at play. Nanosys may have had a dozen Ph.D.s on staff and more than 400 patents in hand, but its prospectus warned that its first product wouldn't be "commercially available for at least several years, if at all." Beneath the paranoid tone that shades all language concering risk factors, there was a cold reality that violated the simple, harsh rule of thumb that Wall Street is sticking to these days: No products, no revenue. No revenue, no profits. No profits, no IPO.

"It looks like a very risky bet to me," says Tim Harper, CEO of Cientifica, a market research firm focusing on nanotechnology. "Nanosys doesn't seem to be in any different position to where they were before last year's aborted IPO. If they were, then they would have tried again."

It's not entirely fair to say that Nanosys has no revenue whatsoever. Its prospectus last year showed $3 million in revenue and a loss of $9.2 million and 2004 Q1 revenue of $1.2 million and a loss of $4 million. Most of that money came from development contracts from Uncle Sam and others. Since then, Nanosys has announced more than $10 million in myriad federal contracts, but no viable products to market.

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