International NanoBusiness Workshop

Oxford, 22 September 2005

Hazel Moore, FirstCapital’s Chairman and Co-founder, moderated a panel moderator at the International NanoBusiness Workshop, sponsored by UK Trade and Investment (UKTI) and Lux Research (LR)

Oxford University Begbroke Science Park hosts the International Nanobusiness Workshop

The Oxford University Begbroke Science Park (OUBSP) hosted the International NanoBusiness Workshop, sponsored by UK Trade and Investment (UKTI) and Lux Research (LR). With nanotechnology considered to be the first truly global technology; making sophisticated deals with strategic partners and investors has become key in determining success or failure. The Workshop brings together people from different aspects involved in nanotechnology by informing the UK community about international nano-business deals taking place, providing insights into successful business deal making, how to sharpen their pitch skills and communicate the exciting opportunities in the US.

Ray Pimentel, the Vice Consul for UKTI, based in Chicago, said: "The UK has an exceptional science base, but competition is fierce, and one must understand the structure and operation of the value chains and how technology can sustain or disrupt these chains. Making contact at trade fairs is only the first step and one must continuously develop and exploit knowledge, solve difficult problems, manage credibility, continuously network, pitch and follow-up. There are no short cuts and potential financial risks. We (UKTI) must inform, educate and challenge, as much as we promote and support business by helping to develop networks and leveraging these toward preparing businesses do business overseas."

David Lackner (Lux Research) presented 'A World of Nano-Business Deals', a detailed overview of the business implications resulting from nanotechnology. Deals with strategic partners are being formed, as are complex value chains. Patents are being filed to corner market areas even though most researchers or manufactures are still though to be at concept, prototype or initial application stage.

LR identified potential ways in which companies could capture value through nanotechnology from the improvement of existing and creating new products through to the introduction of better process alternatives. LR findings also suggest a mismatch between the expectations of buyers and sellers in product 'added value', where pricing, from a buyers point, is one of the big challenges.

Although US currently leads in terms of activity, Far East countries like South Korea, Singapore and China are already on the upsurge with investments from Government for strengthening the facilities or through collaborations with leading European and US companies. David Lackner concluded by saying that: "Nanotechnology is real and today and products that can benefit from it. Collaborations, activities and momentum are increasing. There are many options to capture value from that value chain. Nanotechnology enables a 'global fresh start' with everybody coming out of the gate at the same time."

Daniel Carter (Conduit Ventures) presented 'Deal Making from a VC Perspective'. Conduit focuses on the energy market, particularly fuel cells that address market applications requiring portable and/or higher energy density requirements. With a focussed outlook and using 'local' knowledge and expertise with investment managers based in different countries, Conduit has captured opportunities from Europe, the Americas and the Far East. Outlined were also some of the potential criteria that investors look for, from management, the technology, the market 'pull' to the exit route that will enable 'recycling' of investment into other companies.

Contrastingly, Paul Atherton (NanoVentures) presented 'Starting Technology Businesses', concentrating on early stage investment. For companies strong intellectual property is a fundamental and important asset in preventing technology appropriation, but also in providing a market entry window. However, policing can be both difficult and expensive. Licensing was also mentioned as not necessarily being the panacea for generating revenue and often, there is compromise between licensing, maintaining control of the intellectual property and its' future development. With nanotechnology the question and challenge is being able to capture value.

Funding options were mentioned with internal or external sources; 'bootstrapping', angel seed or syndicates with Venture Capital funding the hardest to obtain. Invariably, VCs seek low risk, with high return, fast growth in the shortest possible time to exit. Additionally, the notion that an idea is an opportunity was dispelled. One has to look at factors such as timing of the market entry, adding value for the end user and the economics.

In the afternoon, four companies, with eight minutes each participated in a 'Pitch Fest', presenting to an expert panel as practice for future business development activities. The panel, were asked to comment on each presentation, was moderated by Hazel Moore (First Capital) and consisted of Paul Atherton (NanoVentures), David Bott (National Strategy Technology Board), Darren Budd (BASF Venture Capital), Daniel Cart (Conduit Ventures) and George Courville (BOC). Eric Mayes (NanoMagnetics) presented a low energy water purification product for use in military, emergency relief and consumer applications. Jeff Lyons (Infinitesima) presented the world's first high-speed, video-rate atomic force microscope. Graeme Purdy (Ilika) presented the company's ability to substantially accelerate the discovery of new materials. Robin Morris (Alterg) presented the development and exploitation of IP on a range of compounds enabling manipulation of hydrogen molecules. Workshop attendees were asked to mark against each presenter, with the first prize winner, Eric Mayes (NanoMagnetics), receiving six Lux Research reports.

The day concluded with David Lackner presenting 'A Prudent Approach to Nanotech Environmental, Health, and Safety Risks' (EHS). Increased awareness of this issue is due to the publication of the Royal Society and Royal Academy of Engineering report in 2004. For many US companies there is too much uncertainty to pursue a more confident approach to commercialisation and some are being compelled to plan for EHS, but without knowing what those risks are. The Catch 22 is US regulatory bodies are keen to see what the technologies and applications are before regulations are made. The UK is considered to be leading as far as setting standards and regulations are concerned.

Lackner concluded with saying that collaborations, such are the European FP6 funded project NANOSAFE II and Japan's National Institute for Materials Science, should be encouraged to bring focus to what the real versus the perceived risks are. Furthermore, the life cycle of nano-materials should also be considered. Governments should consider helping co-ordinate disparate research programs, not just toxicology, but also effective public communications as to how nanotechnology could affect and change society.