Nanotech Entrepreneurs Follow the Money

When it comes to nanotech startups, VCs are not exactly falling all over themselves to invest. Most of the funding action right now is in government grants.

That’s according to Howard Lovy, News Editor of the nanotech industry’s Small Times magazine (click here to subscribe — you may qualify for a free subscription). In an article at Blogcritics, he provides insight into funding trends for nanotechnology entrepreneurs today:

    “Government money, though, is a totally different story — DARPA, NIST ATP, SBIR, the whole alphabet soup. It’s really not the private sector that’s boosting the industry right now. It’s government spending. And that’s a fairly normal phenomenon for an industry in its early phase. The government props it up, encourages it, gets R&D moving in the lab, helps it along into the startup phase, and then the Darwinian world of business kicks in.

    Even there, though, startups can live to see another day primarily through government grants. And right now, the military is where the money is at. Shop your nanomaterial around and tell a VC that your superstrong, superlight nano-enhanced polymer would be useful for garage doors, and you might be shown the door. But go to DARPA and say it can help reinforce tank or aircraft or cockpit doors and can stop a speeding bullet, and you might have an easier time getting some dough.”

Sounds like practical advice for nanotech entrepreneurs and early stage companies.

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.