- js reader version
- view hidden posts
- tags and related articles
by Michael Fitzgerald
Friday, Sep. 05, 2003 at 11:10 PM
The U.S. government is easily the nation's largest investor in nanotechnology, with The House of Representatives passing a bill to invest .4 billion in the next three years. "Private equity sources can't bridge the gap from the lab to products"
nano_usa.jpg, image/jpeg, 280x200
Silicon Valley faces eastward to catch government gold dust
Michael Fitzgerald, Small Times, September 4, 2003
Silicon Valley is fabled for its ability to build companies around esoteric technologies. But the uncertainty involved in nanotech investing is forcing many Bay Area firms to take a spot in Uncle Sam's queue.
But why would Silicon Valley's libertarian technocrats anoint the slow-moving federal government as a nanotech savior? After all, high-profile companies like Nanosys Inc. and Nanomix Inc. have drawn tens of millions in venture capital.
Because, in truth, most of the VCs that fund nano companies do so as a highly speculative part of their portfolios.
Nanotech entrepreneurs "are competing for money with companies that have revenues and markets and are looking for late-stage investments," said Rich Helfrich, managing director at Alameda Capital. By comparison, nanotechnology firms look like research projects.
Helfrich said that entrepreneurs need to find a path through "the Valley of Death" that exists between research completion and product release, and federal research grants look like the right vehicle.
That was a clear theme at a recent nanotech forum organized at NASA Ames Research Center. Meyya Meyyappan, director of the Nanotechnology Research Center at Ames, said that "it takes 15 years to get from the lab to product," in hard science fields. That time frame requires far more patience than VCs can afford to have.
"It's not like this is the sort of technology you can tinker around with in your garage," said Steve Jurvetson of Draper Fisher Jurvetson, one of the most aggressive investors in small tech firms. "There's sort of a funnel of opportunities (for private investment), and the contenders for it are largely funding themselves with government grants."
Jurvetson said DFJ has now funded close to 18 small tech startups, and every one had some kind of government funding first.
The U.S. government is easily the nation's largest investor in nanotechnology. Various agencies will spend 4 million on nanotech research in fiscal 2003, and plan to spend 7 million in fiscal 2004. The House of Representatives in May passed a nano spending bill that would allot .4 billion over three years, and the Senate is expected to pass its version early in the fall session.
U.S. Rep. Mike Honda, D-Calif., co-sponsor of the House bill, was a keynoter at the NASA Ames forum, where he urged nano researchers and entrepreneurs to aggressively seek out federal research dollars. "Private equity sources can't bridge the gap from the lab to products," he said. "The federal government can help by supporting this work."
Honda encouraged entrepreneurs to link up with researchers working on grants, and in particular to apply for the Department of Defense's Small Business Innovation Research and Small Business Technology Transfer grants.
Working with the feds makes sense to some. "Entrepreneurs need to recognize they aren't going to get VC funding," said Chris Piercy, president and chairman of the Northern California Nanotechnology Initiative, a regional coordinating body. "This is the new normal."
But some entrepreneurs say SBIRs and the like are not well suited to nanotech startups. "You couldn't start a nanotech company based on SBIR funding," said Jeff Wyatt, director of business development at Nanomix.
His counterpart at Nanosys, Stephen Empedocles, added that Silicon Valley's cost structure makes it hard to start a company with an SBIR, since the first phase is for a maximum of 0,000. "That's less than one full-time employee," Empedocles said. He said that the federal government is making plenty of money available for nanotech entrepreneurs, but many need to concentrate capital differently.
Where it puts its capital is of grave concern to Bay Area policy-makers. Two of the three U.S. representatives in the Bay Area attended the forum, and both California senators sent representatives. Their message: the Bay Area needs to get organized or continue to lose out on federally funded centers like the ones in New York and Texas. While Silicon Valley may be the number-one place for nanotech right now, a number of the area's leaders fear that it will lose its pre-eminence - and lots of high-paying jobs - if it does not also draw large new centers for nano research.
Not everyone in the valley agrees. Empedocles told the forum repeatedly that Nanosys could not have been founded anywhere in the world but Silicon Valley because of the availability of management and research talent, equipment makers and venture capital, among other things.
Meanwhile, Todd Ewing, managing director of the San Francisco Center for Economic Development, downplayed the actual threat, saying the Bay Area still attracts plenty of money - with the Molecular Foundry under development at Lawrence Berkeley National Laboratory, the 60-plus nano researchers at NASA Ames, the National Nanofabrication Users Network at Stanford and a host of funded entrepreneurs. He also doubts that Albany and Austin have enough brainpower to make a run at the Bay Area, regardless of facilities.
"I'll take our talent over their equipment any day," Ewing said.
Report this post as:
LATEST COMMENTS ABOUT THIS ARTICLE
Listed below are the 10 latest comments of 4 posted about this article.
These comments are anonymously submitted by the website visitors.
Change Links September 2018 posted
More Scandals Rock Southern California Nuke Plant San Onofre
Site Outage Friday
Change Links August 2018
Setback for Developer of SC Farm Land
More problems at Shutdown San Onofre Nuke
Change Links 2018 July posted
More Pix: "Families Belong Together," Pasadena
"Families Belong Together" March, Pasadena
Short Report on the Families Belong Together Protest in Los Angeles
Summer 2018 National Immigrant Solidarity Network News Alert!
Watch the Debate: Excluded Candidates for Governor of California
Change Links June 2018 posted
The Montrose Peace Vigil at 12 Years
Unity Archive Project
Dianne Feinstein's Promotion of War, Secret Animal Abuse, Military Profiteering, Censorshi
CA Senate Bill 1303 would require an independent coroner rather than being part of police
Three years after OC snitch scandal, no charges filed against sheriffs deputies
California police agencies violate Brown Act (open meetings)
Insane Company Wants To Send Nuke Plant Waste To New Mexico
Change Links May 2018
Worker-Owned Car Wash on Vermont Closed
GUIDE TO REBEL CITY LOS ANGELES AVAILABLE
lausd whistle blower
Help KCET and UCLA identify 60s-70s Chicano images
UCLA Luskin: Casting Youth Justice in a Different Light
Change Links April 2018
More Local News...
Paraphysique de psychosomatique
Chuck Grassley: Women Abusing, Animal Murdering, Illegal War Supporting Criminal
Finance Capitalism and the Digital Economy
Muselières syndicales, muselières patronales
Jeff Bezos, Amazon, The Washington Post, Whole Foods, Etc
Why Choose Nut Milk Over Cows' Milk
Antrhopocène, le grand effondrement
Creative Destruction Hack Diamonds Windows/iOS/Android - Creative Destruction Generator
The Dictatorship of Corporations
18 Lethal Consequences Of Hunting
Paraphysique de l'outplacement déontologue
Creative Destruction Hack Mod Generator
Shopping du bashing
After Lehman Brothers, Experts Say Global Financial Crisis Can Happen Again
“Animaniacs in Concert!” Starring Voice Legend Rob Paulsen
Probabilités de fin d'humanité
Florida Area of Migrant Farmworkers Denied Right to Construct Health Clinic near NaplesCIW
Propagande de virus, virus de propagande
Steer clear of work morality!
Sweatshop Lodge Ceremony Continues in US Fed Prisons Led by Inmates
Paraphysique de l'origami
The Shortwave Report 09/07/18 Listen Globally!
August 2018 Honduras Coup update
Du réussissement putréfié
Brett Kavanaugh Filled The 5th Circuit With Execution Judges
Augusta Georgia Woman Gets 5 Year Prison Sentence for Writing About Russians Crime Acts
More Breaking News...