The pitch: Nine small tech firms
get 15 minutes on the mound

NEW YORK — Some threw strikes. Some were low and outside. But nine startups with major league dreams each got a shot at winning investor interest as part of NanoBusiness Spring’s Bootcamp for Entrepreneurs.

Moderated by Ben Savage, an associate with private equity firm Wasserstein & Co. and Ari Ginsberg, director of the center for entrepreneurship at NYU’s Stern School of Business, “The Pitch” gave a lineup of young companies the chance to polish the 15 minute version of their business plan in front of an audience of potential investors.

The pitches were as varied as the pitchers. Some were polished, professional and persuasive. Some were of the Ph.D.-with-a-dream-and-a-patent variety. But all were innovative.

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Screwball: Chiral Technologies hopes to produce filters or modulators for optical networks from a patent on making optical fiber with a special nano-spiral twist in its core. CEO Dan Neugroschl also believes the company’s candy-striped fiber can be integrated with less expensive lasers to provide “twice the power at half the price.”

Spitball In the morning session, Emanuel Barros, chief technology officer for two-month-old NanoMatrix, presented a cost-effective system that can cut or etch submicron structures using tiny jets of water. Barros, who left NASA’s Ames Research Center to start NanoMatrix, said the process was inspired by a kind of shrimp that stuns prey with powerful water jets.

Whiskeyball: Yuval Avniel of MicroPowder Solutions described his company’s simple, intriguing method for creating thin films from two or more materials. By carefully alternating how different atoms are deposited on a surface, Avniel said, the process could allow scientists to “put atoms together like Lego blocks.” It could, he said, be applied to create multifunctional coatings that might be both wear-resistant and electrically conducting. He also envisioned the process being used to create nanoscale fuel cells, filters or wires.

Avniel said the technology has been developed on something less than a shoestring. “My colleague in Belarus agreed to make our samples in exchange for a case of Johnny Walker,” he said. He’s now looking for strategic partners and seed capital.

Curveball: Jayesh Doshi, chief executive and founder of eSpin Technologies in Chattanooga, Tenn., is looking for $3 million in funding to enable his company to rapidly and dramatically increase its production of nanofibers. Doshi said eSpin, founded in 1999, already has more than 30 customers, including the U.S. Departments of Energy and Defense, NASA and TRW.

The company’s nanofibers, which can be “electrospun” from a variety of materials, including carbon and nylon, could provide superior performance in automotive air, oil and gas filters. For commercial production of nanofiber air filters, Doshi said, eSpin has to ramp up to produce eight million yards of material.

Other nanofiber applications in eSpin’s arsenal: use in ultracapacitors for energy storage, filtering blood, viruses and biomolecules, creating strong, lightweight materials.

Buckyball: Like many scientific discoveries, Luna nanoMaterials’ metal-filled buckyballs, soccer-ball shaped carbon molecules filled with three metallic ions and a nitrogen atom, were a happy accident.

As CEO Kent Murphy explains, Harry Dorn’s team at Virginia Tech were trying to make “regular” buckyballs when a bit of air leaked into the reactor. The error lead to a whole new class of materials that the company calls Trimetaspheres. The buckyballs don’t break down in the presence of oxygen and can withstand heat up to 300 degrees Celsius, he said.

Now it is looking to produce them commercially as a highly effective contrast agent that could make MRI images and the diagnoses derived from them significantly better.

Murphy said that the buckyballs are 50 times better than the current best-selling contrast agent, called Magnevist, which controls more than 60 percent of the billion-dollar market for MRI contrast agents. What’s more, Magnevist’s patent is about to expire. Murphy also contends that Luna’s agent could make MRIs more useful and less expensive by requiring patients to ingest less of a contrast agents and allowing smaller magnets to be used in MRI machines.

The company has done tests in small animals and is looking to raise $7 million the get started on toxicity studies before moving to phase 1 clinical trials in humans. Ultimately, Murphy said, the company’s exit strategy is to be acquired.

So how did umpire/moderator Ben Savage see the game. “It’s well known that venture capitalists don’t like to fund science projects,” he observed. Savage thought that one pitcher, BigBangwidth, a company based in Edmonton, Alberta, which aims to produce local network devices that offer “ethernet on steroids” via nanoelectronics, had commercial promise.

But overall, he has an investor’s cautious, risk/reward driven perspective on small tech. “Many of these markets and almost all of these technologies are uncertain,” he said.

He also noticed that while all nine companies that participated in The Pitch had some degree of “smallness” about their technologies, they were in a wider range of business sectors.

Echoing a theme heard throughout the conference, Savage noted that “nanotechnology is not an industry, but a set of technologies spanning a wide range of businesses.” To assess small tech-powered startups, investors have to look at them not through nano-tinted glasses, but with expertise in whatever sector a new company may be looking to enter.

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