Steve Jurvetson would make one hell of a preacher. He’s the Billy Graham of nanotechnology loud, well connected, and ready to convert nonbelievers. If nanotech is to be the next big thing, then Jurvetson, a cofounding partner of Draper Fisher Jurvetson, is its leading evangelist.
When he gets going, Jurvetson is like the main attraction under a three-ring revivalist tent. His long arms start to gesticulate, then fly, and he talks so fast that his oversized noggin looks ready to overheat and spin off its axis.
If you want to know where nanotech investing is headed, look no further than Jurvetson. His voice has carried through industry conferences, television appearances and university labs. And he’s not just talk: He was one of the first non-corporate investors to invest in the sector, with at least $20 million of DFJ’s capital devoted to four nanotech and MEMS companies.
We need the innovators, the missionaries, the people that convert the nonbelivers into believers,” says Lamar Hill of the University of Albany in New York and head of Albany NanoTech. “Before there’s flame there’s usually an ember. We’re in that smoldering phase right now.”
It’s a risky place to be for a 34-year-old venture capitalist. If he’s right, he and DFJ will make a mint and deservedly win acclaim for spotting the nanotech trend earlier than most of their peers. But nanotech could turn out to be like robotics investment craze of the 1980s, taking longer than anticipated for commercially viable products to be available. And that could tarnish the already damaged credibility of both Jurvetson and his firm.
Though Jurvetson himself scored some megahits early in the Internet boom – he was a founding investor in Hotmail – DFJ was among the loudest of the dotcom cheerleaders. Many of the once high-flying IPOs the firm pushed through in the hottest days of 1999, like Netcentives Inc. and Digital Impact, are either trading far below their offer price or are bankrupt.
Nanotech could repair DFJs rep., but DFJ isn’t the only VC seeing dollar signs the space. Venture firms ARCH Venture Partners, JP Morgan Partners, Polaris Venture Partners and Venrock Associates along with corporate players pumped $100 million into the sector in 1999. That figure could swell to $1.2 billion next year, according to industry trade group Nanobusiness Alliance.
Jurvetson got turned on to all things small in the mid-1980s as a research fellow at Stanford University. As part of his work, he photographed single atoms in motion. In 1989, he attended a seminar on emerging research on subatomic particles. The discussion sounded like science fiction, but Jurvetson was more than intrigued by the possibilities.
The more he looked at the tech industry as a whole, the more Jurvetson was convinced that nanotech could solve real problems, like the practical limitations of silicon facing semiconductor designers.
“In the near term – next five years – nanotechnology will extend and transcend Moore’s Law with advances in molecular electronics, and it will dramatically enhance the capabilities of biotech researchers in their analysis and manipulation of DNA,” he says.
In February 2001, he put an undisclosed amount into Arryx, which is developing a nanoscale tool kit.
In August of last year, he bet on Nantero, a Woburn, Mass.-based company that’s trying to build a high density nonvolatile RAM chip that it claims could lay waste to the traditional DRAM business.
Last fall, he invested in two more nanotech outfits a stealth venture named Coatue and another called Zettacore, which is trying to combine organic chemistry with a silicon substrate to create memory elements that self-assemble through chemical bonds.
Investing is only part of his equation. He is doing everything in his power to grow the market, including getting into politics. When Newt Gingrich came out to tour the NASA Ames Laboratory in early 2000, Jurvetson went along for the ride. With his enthusiasm and rapid-fire delivery, he was able to get Gingrich, the former Speaker of the House, interested in the business of nanotech. Now the pair co-chair the newly formed NanoBusiness Alliance in Washington. While the Clinton administration budgeted $270 million for the National Nanotech Initiative in 2000, the group is helping to garner support for the Bush administration’s plans to put $518 million into the initiative in the coming fiscal year.
With a wide net and a sea of followers, Jurvetson’s evangelic drive into nanotech is risky for both him and DFJ. If the sector turns out to be just hype, with too long a timeline for commercial applications or one dominated by large corporations, he may be demonized. But if he’s right and nanotech will fuel the next wave of innovation, he may be crowned the patron saint of tiny technology.
Managing Director, Draper Fisher Jurvetson
Investment focus: Nanotechnology, molecular electronics.
Biggest hits: Cyras (acquired by Ciena Corp.), Hotmail (acquired by Microsoft Corp.), Interwoven Inc. (NASDAQ: IWOV), Kana Software Inc. (NASDAQ: KANA), Tradex (acquired by Ariba Inc.).
Board Seats: Cognigine Corp., Closed Loop Solutions Inc., PetaSwitch Solutions inc., SiWave Inc., Tacit Knowledge Systems Inc., Xtime, ZettaCore (7 Total)
Years as a VC: 6.5
Did you know? He hasn’t watched TV for 17 years, but he’s seen The Matrix eight times.