Vinod Khosla, one of Silicon Valley most successful VCs, has warned against nanotechnology companies going public too early. According to a report in Private Equity Week, Khosla has severely criticized the move by Nanosys (a 3-year-old VC-backed nanotech firm which reported losses of $9.2 million on revenues of $3 million in 2003) to go public.
According to the PE Week report, Nanosys' has "locked up" 200 patents from major nanotech research centers, inked development agreements with Intel and Matsushita, obtained a grant from the US Government's National Institutes of Health to develop nanotech-based biosensors, and is steered by a CEO with a "remarkable track record".
Khosla obviously does not consider these factors good enough to make Nanosys an IPO candidate.
He warns against investing in a technology as opposed to investing in applications based on the technology. "Too many people get lost in investing or joining a startup in a [particular] technology. That's the wrong way to look at it. When you invest you should invest in an application that makes an economic impact," Khosla says in the PE Week report.