By Jayne Fried
Small Times Correspondent
PALM SPRINGS, Calif., Feb. 12, 2002 - To show that nanotechnology
is more than hype, David Soane stands before an audience of about
250 people at a nanotech investing forum, and holds up a pair of
beige cotton slacks.
Molecular structures that are part of the Nano-Texprocess are much
smaller than a grain of sand oreven a virus. That prevents the human
eye, ortouch, from detecting even a minor differencebetween Nano-Tex
fabric and regular fabric,the company says.
"This is a pair of pants," Soane says casually. "You
can buy them in any Eddie Bauer," the retail chain with a store
even in Palm Desert, Calif. That's not far from the table where
Soane picks up a glass with liquid in it.
"Imagine you're at a cocktail party and you have red wine..."
Soane empties the glass on the fabric. The liquid rolls off. "One
hundred percent cotton," the Berkeley chemical engineering
professor-turned-entrepreneur says triumphantly.
It isn't Scotch Guard or Teflon protecting the cotton. "Nano
whiskers" poking up from the soft fabric repel the potential
stain. The whiskers look like coils in a graphic Soane displays.
In reality, at 10 to 100 nanometers long, they are invisible to
the naked eye.
The firm that produced them, Nano-Tex LLC, appears to be a model
nanotech company: Its technology is potentially disruptive, plus
it has access to a huge market and a direct business approach. Less
than four years ago, Soane hooked up with textile giant Burlington
Industries, bypassing venture capitalists for backing.
"Nano-Tex is a company that uses nanotechnology for a very
stodgy and mature industry - textiles," said Soane, the company's
founder and chief science officer. "We have overcome the manufacturing
and technology risks," he said. "Now we are testing the
market risk. You, the audience, will be the assessors of the technology."
Soane was among 30 panelists who spoke during a Nanotechnology Investing
Forum on Monday. International Business Forum (IBF) Conferences,
based in Rockville Centre, N.Y., sponsored the event.
The Lodge at Rancho Mirage near Palm Springs, Calif. was an appropriate
setting for the forum. Mountain peaks and rugged desert surrounded
pristine golf courses and palm-lined estates that wouldn't be here
on their own.
"Re-engineering of the natural world, with the imposition of
our synthetic will. That's what nanotechnology is," said Cynthia
Kuper, founder, president and chief of research at Versilant Nanotechnologies.
The Philadelphia-area company develops carbon nanotechnology.
"Nanostructured properties are driving the industry,"
said Meyya Meyyappan, director of the NASA Ames Center for Nanotechnology
and conference chairman. He said that modeling and simulation software
to view three-dimensional images at the nanoscale is a rapid growth
The 10-hour conference was a crash course for people like Gary Swanson,
president of Mentor, Ohio-based Thermotion Corp. Swanson will take
back to a Midwest investor's group his take on funding small tech.
For Maria Xenophontos-Ioannou, managing director of Rosseter Holdings
Ltd., which owns a nanotube production company in Limmassol, Cyprus,
it was a chance to meet potential new investors. And there was a
slew of investors to meet.
Venture capital presenters included Ark Venture Partners, ARCH Venture
Partners, meVC, Lux Capital, nAbacus Limited, Double D Venture Fund
and Almeda Ventures. Ann Arbor, Mich.-based Ardesta LLC, parent
company of Small Times Media and an investor in nine small tech
companies, was among the event's sponsors.
Getting down to basics, Rick Snyder was among the panelists who
agreed that nanotech's "hype has gotten a little bit out of
perspective." Ardesta's chief executive officer stressed fundamental
business practices that center on the synergy between people in
a company. That task alone can be daunting.
"In some cases, there are not a lot of researchers in this
(small tech) industry," Snyder said, "But I would argue
there are even fewer experienced business people active in this
"I would say the hype is limited compared to the dot-com era,"
countered Josh Wolfe, managing partner of New York-based Lux Capital.
"We do not see one nanotech IPO after another." From his
perspective, VCs should move earlier to fund nanotechnology - while
efforts are in the lab.
"The bitter reality, but the truth, is that a lot of this is
science, the vast majority is science," Wolfe said. "A
new way (for investors) to allocate high-risk assets will go towards
Whether it's early-stage or third-round funding, "venture capital
is rapidly increasing" in nanotech, said keynote speaker Steve
Jurvetson, managing director of the Silicon Valley VC firm Draper,
Partnering with big companies that can either acquire a company,
or distribute and market technology was stressed by more than one
panelist. Companies in this area included Intel, Corning, Dow, 3M
Corp., IBM, Motorola, Hewlett-Packard, Lucent and Hitachi USA.
Some startup companies to watch:
- Nanosys Inc.: The Palo Alto-based company has a powerful intellectual
property (IP) portfolio that includes nanowire technology. Nanosys
is close to announcing a new funding round, Larry Bock, president
and chief executive officer, told Small Times. The company closed
$1.7 million in seed funding last October. Founders include James
Heath, director of the California NanoSystems Institute at the
Universities of California, Los Angeles and Santa Barbara.
- AngstroVision: Based in San Francisco, the early-stage company
is working on nano-imaging devices. The company has seed funding,
but the amount was not disclosed. Scott Mize is president and
chief executive officer.
- NanoMed Pharmaceuticals Inc.: The drug delivery company has
technologies that include "nanotemplate engineering."
Kalamazoo, Mich.-based NanoMed was among three early-stage companies
to win a business plan competition at the Nanotech Investing Forum.
Other winners were Seattle-based Apex NanoTechnologies, focused
on developing molecular research software, and Santa Rosa, Calif.-based
Quantum Polymer Technologies Corp (QPT). Stephen Nett, QPT's chief
executive, said QPT is ready to market a "self-assembling plastic
electrical conductor." The technology is emerging from 17 years
of "quiet research and development," Nett said.