Five and a half years ago, in the still heady days of the technology boom, President Bill Clinton announced the National Nanotechnology Initiative. The federal program provided almost $500 million in funding for the fledgling field of nanotech in 2001. More importantly, it gave credibility to research that had all too often suffered from hyperbole. Since then, nanotech has had its share of awkward moments – such as the cancellation of a high-profile initial public offering (Nanosys) – and growing pains, including the enthusiastic embrace and subsequent skepticism of venture capitalists. But for those observers patient enough, there are numerous signs that nanotech is quietly moving into its next stage of development, a stage in which more and more promising research moves into commercial development.

Three of the nine deals featured in “Dealflow” (a monthly column that tracks financing for innovative startups, “Dealflow” makes its debut in this issue of Technology Review) are from the generation of nanotech companies founded in 2000 and 2001. Nanomix, Nantero, and NanoOpto are notable not only for their strong academic credentials (the companies draw on research done at the University of California, Berkeley, Harvard University, and Princeton, respectively) but because of their progress toward commercial products. Take Nanomix; a TR profile of the company from September 2002 (see “Nanotech by the Numbers”) described it as having impressive technology but still struggling to develop a convincing and viable business model. Three years later, Nanomix is introducing its first product line: chemical sensors based on carbon nanotubes, for use in medical and industrial applications.

Another encouraging sign for nanotech is illustrated in “Data Mine”. While annual federal funding for nanotech in the United States has roughly doubled since 2001, the vast majority of investment now comes from the private sector. The National Nanotechnology Initiative might have kick-started nanotech funding, but these days the business community is also fully committed. Even as nanotech’s prospects turn more bullish, investors will be wise to adopt an attitude of patience. But for those interested in the long term, it’s a great time to begin choosing the future winners.