Nanotech Insights #5
Edited from a letter originally mailed to our closest associates January 6th 2008.
Thank you for joining with me in these Insights.
I will be speaking in Vancouver, Canada from January 19 – 25, Indian Wells, CA on February 5 and Phoenix, AZ from February 7 – 10 and and I would like to invite each of you to contact me to set an appointment at any of those places to discuss mutually profitable business ideas.
Let’s continue from where we left off in the last letter:
First, 3 quick public market information items:
2. Our sources tell us another big nano-related IPO is coming within 6 weeks (good luck in this lousy stock market and advancing recession!) and the domicile of the financing will surprise many.
3. The 2007 numbers for QQQQ representing the NASDAQ ($43 to $51) vs. The Nanotechnology.com Small Technology Stock Index which actually declined
in the same timeframe.
With the caveat that bad stock markets effect all stocks, a few new “small tech” stocks have climbed into our “beat the market” (we'd like their 2008 against their 2009/2010 high) category for the longer term, and they include: ACTL, AFFX, BNT, ELN, LUNA, NANO, NANX, PANL and PCOP at current levels . . . All bets are off if they fall below their lows of the last 6 weeks.
Great promoters don’t hype a deal or a technology. They are not simply sharp salespeople.
They typically posses outstanding understanding of the business, the market, the technology and the basis for investment success of the deal, company or project AND they are exceptionally capable of communicating these winning strategies and positive outcomes to each of the key players, including investors and the markets.
They make the most money when the deal makes money for EVERYONE including shareholders, employees and founders,
To date, what “our little world” has seen is an incredibly small group of exceptional promoters with weak technologies or companies, or focused on one key player winning to the detriment of others, or those who benefit individually whether a particular company does well or not.
Great promoters (think Steve Jobs in computers or Robert Friedland in mining) are quite rare. Very good ones have not even appeared in our space, but when good ones have appeared they have not put all the elements together. . . not once as far as I can tell. (ok, with few exceptions: certainly Freescale, Applied Film and Illumina have been or were HUGE successes, and their promoters deserve big kudos, but think of all those VC-funded deals with $50M+ invested that have gone nowhere . . . . and are unlikely to go anywhere, either.)
The promoter of a “small” or advanced tech deal does not have to be the CEO, Chairman or CTO. While that is preferable, I have yet to see someone in that role at a “small tech” startup who understands how to generate investment newsletter writer interest or how to “make their stock go up”. The company promoter, a he, she or team, can be hired, usually for fees and stock, to perform this important function, and this has models in a variety of industries.
Please follow this aside: The story goes that when MCI presented an 800 page proposal to first compete with AT & T in the early 1970s to the most prominent communications lawyer in the
Nothing else.
Paper-clipped to proposal book was a bill for $50,000 (an incredibly large fee for the time). MCI’s board was astounded by the apparent lack of work done, but the opinion stood.
Most business people can relate to this: (Leading lawyers out there will love this.) In the early 1980’s I had a legal question about a real estate transaction, and decided to go to a family practice friend of mine for the advice because he was only $50/hour and . . . well, you can guess the rest. He spent 6 hours researching the subject; charged me $300 . . . and his advice turned out to be incorrect.
Calling all nanotech companies: Get your promotion house in order; As I say in Nanotech Fortunes, it’s more than legitimate expense; it’s absolutely necessary for success!
If your company or a company you know of doesn’t know how to do it on their own, feel free to call or email me.
Next week will pick up on these questions:
1. What are the mis-matches of expectations amongst the key players in nanotech investment and finance and how does this negatively impact the success of the traditional VC model for “small tech”?
2. What alternatives to that model exist and why is the merchant banking model best?
3. Why is the Toronto Venture Exchange the best venue for early stage “small” and advanced tech finance and what are the avoidable pitfalls?
My good friend, who is a marketing genius, berated me over lunch this week. “Darrell”, he said, “I don’t get what you’re doing with Nanotech Insights. You’re not just going to keep sending out information for free are you? When are you going to ‘ask for the sale’ or at least hint at what you want from the reader.”
I told him the mystery would end soon.
Let’s begin ending it now:
My team is building a merchant banking firm in “small” & advanced technology with one of the most prestigious Scientific Advisory Boards in our field. Our modus operandi and area of deep (I have been working in these markets for 25 of my 33 career years as an investment professional and have funded several dozen companies there) expertise is in the Toronto Venture Exchange. Known as a natural resource, mining "public venture capital" venue, I have been working hard to tune it up as an extraordinary venue for smaller IPOs for "small" and advanced technology companies.
Direct A or even seed round deals are possible as well as exits or liquidity AND financing events for traditional VCs: the caveat is that the “sweet spot” for these deals in
Our firm’s mandate is to find and fund companies that can get to a 15X investment valuation or a 1X investment annual royalty stream within 30 months, with the ability to go public in
We are seeking to partner with a professional money raiser.
We are looking to associate with a strong, independent financial partner – a hedge fund, family office. investment bank, mutual fund or other.
We would like to hear from you if you represent a Fortune 2000 company with whom we can develop profitable joint ventures.
If you are or can make an introduction to any of the above, we should discuss it. If you are neither, but you know someone who you believe should be working with us on these goals, I would appreciate your making an appropriate introduction to them. Please call or email me.
Best regards,
Darrell
Darrell Brookstein
Managing Director
The Nanotech Company, LLC
858 794 0848
<< Home