My initial reaction to a new article on nanotechnology investment advice is typically less than welcoming. But today there were a couple of reasons for me to take an interest, such as the recent news that early-stage VC investors make a 2.4% higher return than their later-stage counterparts.
This kind of data might encourage investors to start early on the long road of investing in a company trying to make its way to profit with a nano-enabled product. It might also help the US economy get out of its liquidity trap. (One can always hope.) And, if so, a little good investment advice in nanotech could be useful, especially given the discouraging news we seem to get on a regular basis on nanotech-start-up companies.
So, I decided I was going to read the latest article in this vein with as much open-mindedness as I could possibly muster.
The article entitled “Should Investors Roll the Dice with Nanotechnology?” is authored by Deborah Sweeney, the CEO of MyCorporation.com. I am sorry to say I had never heard of Ms. Sweeney before, but it seems she comes at this issue from a background in legal services.Fair enough. It’s not exactly a background one would associate with having extensive knowledge on how to invest in an emerging technology, but you never know who might have something interesting to say. Unfortunately, I can’t report that there is anything interesting here as it’s burdened with well-worn platitudes like, “Great rewards typically only come with great risks…” or “Before looking at a project, and potentially sinking money into it, investors must ask if this can be sold to someone.”
Really? You think? While giving a test run of every investment cliché, not one mention is made of investment horizons and how this factors into investors’ formula for risk, or how much better a nanotech-enabled product needs to be over its competitors to take a portion of the market, and how the funding gap between government research projects to commercial products is supposed to be bridged when the private investment community is keen to wait on the sideline until profits are made.And who are the investors this article is supposed to be addressing—VCs, stock traders, private equity? It's hard to imagine any of them sitting down to read this to inform their investments.
The question of funding and investment to further the commercialization of nanotechnology is fundamental and critical. It really deserves to be addressed better than this.
I held my nose and took a bite, and now that I’ve swallowed it, I feel a little ill and have a bad taste left in my mouth. It might be a while before I try this again.