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Posted: November 12, 2007
Tapping Into A Tiny Niche With Grand Applications
(Nanowerk News) The Financial Times today has an article aboutt Harris & Harris and its investments into nanotechnology. Here are excerpts:
Sometimes the key to success is finding a niche and exploiting your specialist knowledge of it. For New York-based venture capital fund Harris & Harris, the niche could not be smaller - it invests in companies involved in nanotechnology (its ticker on Nasdaq is TINY).
Nanotech is at the same time the smallest of subjects - a nanometre is a billionth of a metre - and the most wide-ranging, with applications across all sorts of sectors, from household products to space travel. "There is no such thing as a nanotech industry in the way that there is, for example, an automotive industry," explains Charles Harris, H&H chief executive. "Nano is a set of enabling technologies applicable to a wide range of sectors."
Harris & Harris is a classic early stage VC firm, says Mr Harris, except for two facts - first, it only invests in "tiny technology" and second, "we only invest our own capital". Because it is a publicly held company that invests only its own, permanent capital, it can be an unusually patient investor, he says. This is useful in a sector that has seen $8bn (£3.8bn, EU5.4bn) poured into it by VC firms over the last 10 years but has seen little in the way of exit opportunities.
The vast majority of companies involved in nanoscience or nanotechnology development are still engaged in basic research. But Jaideep Raje of Lux says: "Many companies are in the final stages of the R&D cycle - a wave of innovation is set to hit the market in the next two to three years."
Like many other VCs, H&H, which has a portfolio of 30 companies focused mainly on medical and clean technology applications, takes a collaborative approach to investing, Mr Harris says. "We syndicate deals with other VC firms that do not have a focus on nanotech but have expertise in the end markets that our portfolio companies are addressing. We bring the ability to understand what is going on at the nano-scale and how it can be applied commercially."
"Nanotechnology is revealing itself to be commercially useful in different ways every day, both through new materials being made and by finding new applications for existing materials," says Mr Harris.
"In 20 years' time, most new technology will be nanotechnology. Nano may be a useless term because it will be so commonplace."