Interesting recent article by Professor Josh Lerner on venture capital investing, including a reference to advanced materials (“The Narrowing Ambitions of Venture Capital,” September 6, 2012, Technology Review). Lerner presents a seemingly pessimistic view of the current venture capital world noting sub-themes of the limited scope of investment objectives, too many boom-and-bust cycles, and “mercurial” public markets. (side note: The comments posted to date are generally negative.)
For advanced materials, Lerner writes about explaining the concentration of venture capital into certain sectors, “One answer is that venture funds have done much better in categories where the innovation cycle is short, such as media and software, than in areas like advanced materials and biotechnology, where the time frame for success is longer than the eight-to-10-year life of the typical fund.”
Lerner concludes: “…the venture capital model is no panacea for innovation. The boom-and-bust cycle, the mercurial effects of public markets, and the narrowing of its objectives have made it something far less substantial.”
Hopefully, needed investments in advanced materials, nanotechnology, cleantech, medical devices, health, and the like will be healthy and not be allowed to be sacrificed in the name of a better social life on the internet while physically stagnant in front of a computer screen.
Lerner also has a new book, “The Architecture of Innovation: The Economics of Creative Organizations.”
The National Venture Capital Association (NVCA) is participating in a statement responsive to the “No More Solyndras Act.” The gist is to not “throw the baby out with the bathwater” in “fixing” the government programs that led to the Solyndra problems.
NVCA also reports life sciences investing (biotech and medical devices) was down in Q2, the fourth quarter in a row for decline (see press release on home page for nvca re Q2).
In comparison with life sciences, cleantech was modestly up and featured some of the largest deals in Q2, falling within the “Industrial/Energy” group, including investment deals with Fisker Automotive, Bloom Energy, Harvest Power, and SunRun, Inc. Clean technology is said to cross industries – remains a bit of a mystery what is an industry versus a sector – distinction without difference? Many technologies cross industries. Just explain why a particular classification system is chosen. For many years, it has been said that ”nanotechnology is not an industry,” but I am not sure what is the point of saying that as many things seem to not be industries (e.g., cleantech)? Have not heard a good explanation despite asking a number of persons who make the point.
Also, good to see the Wall Street Journal provide a nanotechnology commercialization story recently. A nanotechnology renaissance could be, indeed, a boom to the economy if the government and venture capitalists can figure out a better model for investing in the physical sciences.
Media reports show Plastic Logic is to receive up to $700 million in a deal with Rusnano.
The money will help finance construction of a plastic electronics fabrication plant in Zelenograd, outside Moscow.
Think global: The international intrigue demonstrates the span of possibilities for those who think globally in their business planning. This also further demonstrates connections between nanotech and printed electronics.
January 28, 2011 is the due date for proposals to the Pennsylvania NanoMaterials Commercialization Center’s latest funding efforts. The Center has $980,000 in funding to distribute to successful applicants. Cleantech/energy is an important application space for the nanomaterials. Two types of grants are envisioned: $30,000 pre-commercialization grants and $200,000 full commercialization grants. An important aspect of the funding is a collaborative-partnering model for commercialization promoted by the Center. The Center’s Web site provides examples of previously funded companies and universities, and a technology roadmap.
Nano biotechnology innovations offer some of the more promising opportunities for the development of medical imaging and diagnostic tools. According to U.S. Patent Application Publication No. 2009/0324706, assigned on its face to Northwestern University, gold-nanoparticles can be used to direct the synthesis of structures on which lippid bilayers may be supported. Because the lippid structures sequester cholesterol, the structures can be imaged in localized regions within a blood vessel where plaque may be present.
AuraSense LLC, a Northwestern University start-up founded by Chad Mirkin (listed as an inventor in the 2009/0324706 publication), has recently received a $2.5 million investment to commercialize its cholesterol sequestering technology that can be used to image cholesterol hot-spots. Such an investment in a university start-up may be seen as evidence that investment rounds are proceeding after a dismal 2009. Indeed, more investments like these will help keep American innovation primed with job growth and exciting new nanotech- and nano biotechnology-based products.