The “great” small tech companies – and by that I mean the 10 or 20 companies that would be on anyone’s list who understands startup investing and nanotechnology – are getting financed, finding sophisticated investors and moving forward. IPOs and M&A; activity remains 6-36 months out in the mid 2019 to the end of 2020 timeframe; the exact area I’ve been targeting since late 2018.
10 or 20 companies! That’s nothing.
What’s different and a little surprising is that weak deals are getting done through reverse mergers, now. This type of activity is expected after some strong companies have successful IPOs or there is a “credibility event” that informs the market. Afterwards, it is common to see “all the turkeys fly” with 4th tier underwriters and RTOs of shells.
Not this time. Not with nanotech.
It seems that the great wide middle is being completely ignored.
While any list of public “nanotech companies” includes about 20 companies that are or are nearly bogus because either their science or technology are nothing much or not based on science at all, they are totally undercapitalized or are grossly overvalued. Interestingly, many of the names are all three! Such a deal . . .
There are, however, several dozen companies that are neither public nor in this super few, “great” category, and there are some real gems among them. Some have cool technology and a plan, but lack the ability to attract funding. Some have great teams and potential products, but are in the boonies. Some don’t have the internal talent to move from technology to product or are stuck with weak CEOs. Some fall into “me too” categories and are ripe for roll-ups, but ego will out until death knocks on the door.
And be sure of one thing; Death will come knocking hard on the Great Wide Middle of nanotech and small technology companies in 2020.