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Field of Dreams
by: Jae Kim
June 8, 2005
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Page: 1 2
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Consider this: the greatest source of current nanotechnology funding is provided by the average citizen. That is you and me. Although multi-billion dollar corporations are also spending heavily on nanotech research, the biggest source of funding is being provided by the governments with taxpayers footing the bill. It is not the venture capitalists that are driving nanotech research, but rather, it is our taxes that allow universities to hash out the fundamentals of nano-science. Last year, the US government provided over $900 million while the venture capital community invested about $200 million.
It is very ironic when you think about it. We may benefit in the future via cool devices and improved medical care. However, we will pay for the nano-product out of our own pockets. And we will not receive a cent in return from the nano-product’s profit. The beneficiary, of our generosity, will be some professor who molted into an entrepreneur after receiving $1 million from the 2003 $3.7 billion Nanotechnology Act.
And let’s not forget the venture capitalists that will eventually fly in on the coattails of government funding. They will inject their money, at less risk, and some will make a fortune off of start-ups that were initially funded by taxpayers. And how much of this fortune do the taxpayers receive? Nada. Does anyone else think that it is odd that taxpayers foot the riskiest part of the investment cycle, yet they derive no financial reward from any successes?
It is likely that some government official or VC will argue that these start-ups will turn into large companies employing a lot of people. And if a lot of people are gainfully employed, the economy as a whole will benefit. That may be true. But the point is that the venture capitalists also receive the same economic benefits. However, they are rewarded handsomely whenever a start-up succeeds while the average citizen gets nil.
For better or worse, that is the way the game works.
That is American capitalism. C’est la vie.
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