Future Rounds Of Financing

Most nanotech companies will require multiple rounds of financing before they are self-sustainable. As soon as a company completes its first round of private equity financing, the race toward the next round begins. The terms and conditions associated with future financing turn on the success of the company in following its business plan and developing its technology. Investors will evaluate whether the company meets certain goals. If a company progresses according to plan, subsequent rounds...

The University Spin Off

A large portion of funds allocated under the National Nanotechnology Initiative (NNI) are channeled to research universities. As shown in Chapter 2, most nanotech start-ups are spinoffs from pioneering breakthroughs at universities. Table 10.1 provides a list of universities that have established nanotechnology centers, institutes, and networks. We expect research at these universities to generate a large number of patentable inventions in the near future. When an invention is made at a...

The Corporate Spinoff

A third means by which nanotech companies may be started involves employees, usually researchers, who leave a large corporation. There is an old tale of Silicon Valley that once upon a time everyone working there worked for IBM.31 At the time of this writing, few nanotech start-ups have spun out of large companies. Yet, as the field develops, some brave entrepreneurs are likely to take the leap. The intellectual property issues associated with a group of researchers leaving a large company to...

The Industrial Structure Giving Rise to Nanotechnology

We don't make the products you use, we make the products you use better. The phrase is a familiar one. We don't make the products you use, we make the products you use better. Although used in commercials by BASF, a company that adds value to existing products with its chemicals and plastics, this phrase could also be used to describe nanotechnology companies. Nanotechnology will serve to improve a number of different types of products in different industries. As we saw in Chapter 1,...

The Importance Of Effective Export Control Laws In Nanotechnology

A failure by agencies to clearly address how novel nanoscale, materials, devices, and systems are to be regulated could have serious repercussions for American industry, the development of nanotechnology, and national security. First, there is a risk of overregulation of nanotechnology. The export control regime places on industry the burden of understanding the regulations and determining when it is necessary to apply for a license. If firms are unsure how regulations apply to their...

The State Of Export Control Laws

The export control regime was largely fashioned during the Cold War. The persistent threat of a massive confrontation between East and West mandated strict controls on technological transfers. With the collapse of the bipolar world, governments significantly relaxed regulations.3 American companies convincingly argued that they needed fewer restrictions to effectively compete in the global marketplace. In the aftermath of the 2001 collapse of the World Trade Center Towers, however, a new...

Seeking Venture Capital

To obtain venture capital, a nanotech start-up must have a viable strategy, pro-tectable intellectual property (IP), and a strong business plan. We discussed these issues in the first two chapters of this section. We now describe the process of pursuing venture capital, from getting an initial meeting to negotiating a Letter of Intent. The first major issue in nanotech fundraising is networking and leveraging a group of personal connections and contacts. During the Internet boom, entrepreneurs...

Should Government Fund Nanotechnology

Before analyzing how the National Nanotechnology Initiative is being implemented, one should consider whether government funding of nanotechnology is justified in the first place. In this section, we identify the different rationales for government funding of R& D and explore what rationales can be used to support the existence of the NNI. Public funding of research and development can be motivated by three different goals. First, government funding can be intended to support basic...

FDA Preparation For Acquiring Expertise in Emerging Technologies

The FDA has done an adequate job of preparing for novel technologies in the past. The FDA's experience in regulating products based on early biotechnology, artificial intelligence, and advanced biotechnology products demonstrate that the agency is able to acquire the scientific expertise necessary for effective regulation. The FDA was able to equip itself for effective regulation of early biotechnology products. The biotechnology revolution was launched in 1976 when a human protein was...

Becoming an Acquisition Target

Unlike companies seeking to go public, which must be prepared to issue public financial statements and for whom profitability and revenue are generally very important qualities, companies interested in being acquired may have a different set of factors that determine their success. This is because acquisitions may be motivated by strategic rather than financial considerations. Large companies may seek to acquire technology that benefits, or directly competes with, their existing lines of...