COMING AGE OF NANOBUSINESS Mark Modzelewski Founder & Executive Director NanoBusiness Alliance

1. COMING AGE OF NANOBUSINESSMark ModzelewskiFounder & Executive DirectorNanoBusiness Alliance May 4, 2002 Sea Island GA.

2. What is Nanotechnology? Nanotechnology: The ability to do things – measure, see, predict and make – on the scale of atoms and molecules Traditionally, the nanotechnology realm is defined as being between 0.1 and 100 nanometers, a nanometer being one thousandth of a micron, which is in return one thousandth of a millimeter Ultimate Goal: Self-Replication

3. Nanotechnology: The Next Industrial Revolution • Nanotechnology will effect almost every aspect of our lives – from the medicines we take; to computers we use; to the energy supplies we require; to the food we eat; to the cars we drive; to the buildings we live in; to the clothes we wear • For every area where we can imagine the impact of nanotech, there will be others no one has yet thought of – new capabilities, new products, and new markets • Nanotechnology revenues are expected to reach over $200 billion by 2006 • NSF predicts a $1 Trillion global market for nanotechology in little over a decade

4. Areas of Nanotechnology: Life Sciences and Medicine Nanotechnology will expand life spans, improve quality of health and enhance human physical capabilities About half of all pharmaceutical production will be dependent on nanotechnology – affecting over $180 billion in revenues in 10-15 years Nanotechnology Developments in Life Science and Medicine: • Nanoparticle Tagging • Drug Delivery • Cellular Manipulation

5. Areas of Nanotechnology: Materials Science When particles get small enough their mechanical properties change Using nanoparticles in composite materials can enhance their strength and/or reduce weight, increase chemical and heat resistance and change the interaction with light and other radiation Nanostructured materials are expected to be more than a $340 billion market within a decade (Hitachi Research Inst) Nanotech lighting advances alone are expected to cut worldwide energy consumption by 10% in 10-15 years Nanotechnology Developments in Materials Science: • Nanocomposites • Nanofibers • Nanoparticulate Fillers

6. Areas of Nanotechnology: Electronics and Information Technology In electronics the benefits of working smaller cannot be overstated The semiconductor industry sees Moore’s Law coming to an end due to present materials and systems limitations –nanotechnology appears to provide the answer Circuit elements will consist of single molecules Nanoscale structures, such as quantum dots offer the opportunity to recreate the computer– developing the quantum computer Nanotechnology Developments in Electronics and IT: • Organic nanoelectronics • Soft Lithography • Enhanced memory and storage • Quantum Computing

7. Some Current Products on Market Optical components Anti-microbial dressings “Self-cleaning” window glass Clay fillers Optical films for pc screens Textiles Ceramics Catalysts UV protectant cosmetics Specialty paints Microelectronic components Automotive components

8. National Nanotechnology Initiative • Launched in 2000 by President Clinton • POTUS initiative marshalling resources of the agencies • Billions in other non- NNI programs for nanotech • Distributed $65 million in grants to 6 universities last year • Central source to evaluate, research and promote nanotechnology • Proposed 2003 budget: $679 million • Biggest success– told the world that nanotech is “real”

9. U.S Competitiveness • Unlike past waves of technology innovation, nanotechnology is not dominated by the United States • U.S. Government has developed a comprehensive National Nanotechnology Initiative (NNI) budgeting over $520 million in FY 2002 • President Bush has proposed $679 million for the NNI in FY 2003. HHS, NASA, Defense and other agencies have billions in additional funds for nanotechnology efforts as well • The EC has earmarked $1.3 billion Euros for nanotech research over the next 3 years (individual EU nations are also spending ever increasing amounts) • Japan’s government will spend nearly $1 Billion on nanotech in 2003 • South Korea, China, Canada, Israel, Switzerland, Australia and others are developing similar initiative to the NNI

10. Key NanoCenters • Chicago, Illinois • Northwestern Univ • Chicago Nano • Venture Capital • 2 National Labs Toronto Upstate New York Michigan Washington State • Boston, Massachusetts • Harvard University • Mass Institute of Technology • Start-up Cluster • Silicon Valley, California • > 50 Small Tech companies • Technology-focused Infrastructure • Academic Agenda • Talent Pool • Venture Capital • Culture of Innovation 3 4 6 1 2 • Metropolitan New York and New Jersey • Columbia Univ Nanotech Initiative • New York University • Highly educated workforce • Industry-Academic Partnerships • Financial Community • Nanobusiness Alliance 5 Ohio New Mexico North Carolina • Southern California, • Los Angeles, Orange County, San Diego • 30 Small tech companies • National Research Facilities • 4 major academic centers • Lower costs of business • Austin/Dallas.Houston, TEXAS • Texas Nanotech Initiative • UT-Dallas • Rice Univ • Zyvez • Richard Smalley • Center for Nanospace Technologies • Start-up Cluster = Small Times Magazine “Hot Spot” = Small Times Magazine “Places to Watch”

11. Major US Corporations in Nanotech

12. Publicly Traded US Nano Companies

13. Nanotechnology Start-Ups

14. Who’s Investing

15. Funding Nanoventures • Venture investment for 2002 projected to $1 Billion* • Most nanotech ventures are positioned in non-nano categories – biotech, storage, etc • VC firms are not necessarily the best funding source for most nanotech companies in 2002 • Business models and types incompatible • Many companies too close to R&D phase– “Death Valley” issues • VC firms often lack nanotech expertise

16. Why Nano-Angels? • High risk (R&D stage) • Very hands on relationships needed • Less risk adverse • Less cynicism

17. Why Nano Corporate Venturing? • Materials science (manufacturing) investments work for them • Tie into corporate backend • Return models and goals often different from most VC firms

18. Current Trends (+) • Nanotech is a burgeoning economic juggernaut • Significant government funding – US and Abroad • Rapid development of academic programs • Over 30 nanotechnology programs across US • Improved tech transfer operations • 500+ nanotech companies at work in the US alone • Venture funding growing at rapidly – a lot of “dry powder” • Impressive corporate R&D budgets • $100 million from IBM for Albany Nanotech • $100 million investment from GE in new technologies lab • Multi-million investments from NIAC, Matsui, Mitsubishi and others

19. Current Trends (-) • Most nanotech companies are at R&D stage (seed) • Seed & start-up stages are often larger than other technology areas -- $4-6 million • Corporate: It’s an R&D issue not CXO issue • No industry standards • Researchers as CEO’s • Outside most VC return models • VC’s have little expertise in nanotech