As far as the nanotech market is concerned, Arati Prabhakar, former director of NIST and keynote speaker at the upcoming SCTVF conference, feels there simply is no such thing.

"There's this tendency to talk about the 'nanotech market' and I don't know what that is," says Prabhakar, who now is a partner at the Menlo Park-based VC Firm, US Venture Partners. The flux of science fiction speculation about what's possible and the hype about nano venture investing she says, are a detriment to the important work being done in the field. "At the end of the day what you really want to get to is that this is a set of very amazing technologies, and it's a very fertile research area, but I don't think it's a particularly fertile area for venture investment."

Prabhakar, who will be speaking about nanotechnology and how current progress in the field pertains to the venture capital community, made it clear that recent activity in nanotechnology--mainly the ascent of research and development--is a positive trend, as well as a necessary exploration phase. Yet during this increase in attention, nanotechnology is at risk of not being understood in a realistic context. After the failure of so many technology-based companies in 2000 and 2001, there was a vacuum of technologies to be excited about. Nanotechnology--and it's aura of promise, disruption, and possibilility--has filled that precarious void and left it vulnerable to misinformation. Although the important work happening today in nanotechnology is likely to produce market opportunities in a relatively short time frame (3-5 years), those opportunities--be it in materials, drug delivery, or devices--will be in select and steady spurts of growth, as opposed to radical changes that suddenly give way to the next new economy.

"This is not an area where talking about the market is going to create the market," Prabhakar says. "This is an area where you really need to dig in and get the technology right to understand what market needs it can address."

The upcoming SCTVF Investment Conference will feature a "pure" nanotechnology company, meaning its products and activity adheres to the strictest definitions of what nano is, manipulating atoms on a nano scale (one billionth of of a meter). In its second round of funding, this company produces nanotechnology-enabled systems for a broad selection of applications in nanoelectronics, molecular sensing, and opto-electronics, and are currently poised to further develop products and bring them to market. What sets it apart from other companies which Prabhakar and nano-hype critics are apprehensive of is that, like any strong technology company, its products serve an existing market that can be penetrated in relatively short time frame, instead of searching for a market or for market acceptance in a uncertain, and high risk, time frame."

"The hype involving a lot of these companies is the exaggeration of how quickly they can get their technology to market as a commercial product, or
it is an exaggeration of how quickly the production and distribution channels can adapt to the new product they are proposing," says Lynn Foster, Director of Technology Consulting at Larta. "This company is not part of the hype because it was formed by scientists who are world leaders in their field, as well as a successful entrepreneur that has built several successful companies before. So when they chose to stake out this area, it's a very serious statement."

by Wendy Hall
Larta Staff Writer

April 18th: Southern California Technology Venture Forum Knowledge and Investment Conference
Come to SCTVF 2002 to learn about emerging markets--including nanotechnology, security technologies, and bioscience. Renowned keynote speakers will present industry analyses on these emerging markets, followed by a select group of companies representing the best technologies in Southern California. SCTVF is the meeting point for anyone who needs to know about the state of cutting-edge technology--venture capitalists, corporate investors, private investors, analysts, corporate executives, and entrepreneurs. 7:30 am-2:30 pm, Regent Beverly Wilshire, Beverly Hills, California.
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