No to Nanotech Startups

Small Tech Funding 2006Looking for the usual talking up of nanotech investments was tough this year, and Small Times has a nice round up of the reasons why which echo much of what we predicted around this time last year.

Perhaps most distressing from an entrepreneurial point of view was the focus on late stage deals rather than seed or early stage, but that merely reflects the overall distribution of risk in the VC world.

It’s not all gloom. Long gone are the heady days of irrational exuberance when anything that moved got funded, but there are increasing numbers of interesting companies crossing my desk, many of which have been seeded by the founders and then bootstrapped using a combination of early sales and government grants.

That is a healthy situation. Most start ups don’t stand a chance of getting VC funding, and probably don’t need it anyway, and from an investors point of view you would have to be mad to fund a company purely because it is nanotech.

As always, investors pluck the low hanging fruit, the zero risk companies with stellar growth potential (well, that’s the the wish list), and everyone else has to build the business whichever way they can.

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