What Aspects of Nanotechnology Make It Attractive for Vc Investment?

What aspects of nanotechnology make it attractive for VC investment?

New market with limited players

High scalability – technology that can grow into multiple revenue streams

High barrier to entry

Hard to imitate

Cost of entry is expensive

Tangible product

In 2004, semiconductors had over $200B in sales

About 42% of semi-conductors were used for PC computing (Exhibit 3), which was a segment in dire need for “universal memory” in the semiconductor industry

Carbon nanotube solution would provide all the benefits of universal memory therefore would lead to high demand for nanotubes

eSRAM needed improving and could greatly benefit from nanotechnology

Raising money would not be a problem if future rounds of financing were necessary and you as an investor would need to exit

Suppose Nantero elects to pursue the fabless model and to accept Zeus’s terms. What is the true pre-money valuation of Nantero implied by Zeus’s proposed terms?

Aggregate Proceeds:

$20M by Zeus

$10M by Existing Investors

T = 10 yrs, Volatility = 35% (average of fabless firms), rf=4%

$16M from Round A & B

Preferred shares ownership: $30M/($30M+$16M) = 65.2%

30 = (0.652)[F - Call(S=F, K=30, T=10, rf=4%, volatility=35%)]

46 = F - Call(S=F, K=30, T=10, rf=4%, volatility=35%)

F = $97.13M

Suppose Nantero elects to pursue the licensing model and to accept Saturn’s terms. What is the true pre-money valuation of Nantero implied by Saturn’s proposed terms?

Aggregate