Nanotech start-ups bullish as Bush signs off on $3.7-B federal grant
US President George Bush signed off on the $3.7 billion National Nanotechnology Initiative (NNI) bill which provides for four years of federally funded nanotech R&D. "The plan is for the R&D to eventually trickle out of the laboratory and into the hands of entrepreneurs and investors, who will then find ways to commercialize nanotechnology that can detect and treat disease, monitor the environment and produce and store energy," reports Private Equity Week. "As a result, the number of federally funded projects is expected to skyrocket, and universities, research institutes and startups all stand to benefit. The bill is expected to foster cooperation between academics and entrepreneurs, so that research developed by one group can be productized and marketed by another," the report adds.
About 21 nanotech companies are estimated to have raised about $207.6 million in private equity investment in the US last year. Since the science itself is pretty young, nanotech companies require large dollops of funding before they can generate returns. The federal funding is expected to allow researchers to focus more on application development rather than on basic science. "If a company can acquire more money in the form of grants, it can commercialize the technology faster without having to dilute the company with more equity," Bill Athenson, vice president of Nanosphere, a venture-backed company in Chicago, says in the PE Week report.
Click Here to read the full Private Equity Week article.