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SPIE Professional July 2008

NanoSonic: A Nano-Size Startup

NanoSonic of Blacksburg, VA, is a university research center spin-off company whose business story forms a chapter in a new SPIE Press book, Engineering a High-Tech Business: Entrepreneurial Experiences and Insights. Two NanoSonic founders describe the creation and early growth of the company in this excerpt.

By Richard O. Claus and Jennifer H. Lalli

Engineering a High-Tech Business

NanoSonic, Inc. was formed by staff of the Fiber & Electro-Optics Research Center (FEORC) at Virginia Tech in 1998 in cooperation with the university … to support a graduate student at FEORC.

In 1997, FEORC had arranged a research project involving the fabrication of specialized coatings with a company in the United States; the project would have supported a PhD student, a part-time staff person, materials, and related costs on campus. Unfortunately, the terms and conditions of the proposed contract were not suitable to the university, so FEORC personnel formed a company off-campus to support that PhD student.

The company was formed one afternoon by faxing a form and credit card number to a company that provides the service of filling out incorporation forms. Capitalization totaled $1,000; the three initial officers were a physical chemist, an electrical engineer, and a business manager. The first project was performed by the PhD student (the physical chemist) in his kitchen; business administration was handled on the dining-room table of the business manager; and technical and business files were stored in a box in the back seat of a car. Corporate overhead was low.

NanoSonic slowly grew through a number of small contracts … Personnel were added gradually, primarily by involving additional graduate students from FEORC who had direct laboratory experience with electrostatic self-assembly (ESA) coatings and analysis methods.

Since FEORC had its basis in electrical engineering, most of NanoSonic's initial employees had backgrounds other than chemistry. Gradually a group of chemists joined the company, and they were able to improve and upscale the ESA process and develop new processing methods for the production of related materials. This change in company focus, from EE-based fiber-optics problems to ESA process chemistry, was important to the development and current level of success of the company.

NanoSonic's growth and direction have been because of the areas of expertise, interest, and energy of its primary technical staff; success in obtaining development programs and material production orders in specific areas; and top-down business planning by the corporation as part of strategic planning efforts.

The company has grown gradually … and in mid-2007 had 65 full-time and part-time staff.

Business Lessons Learned

The spin-off process from the university was inefficient in that the university was largely uninvolved, and the company had to learn business practices on its own. The lack of an initial strategic partnership between the university and the company in the short term likely delayed company growth and in the long term likely reduced the potential positive impact of the company on the larger university community.

Space and infrastructure have been a constant issue. NanoSonic decided not to rent university-managed incubator space in Virginia Tech's Corporate Research Center for two reasons: University incubator space rental rates were approximately four times that of other [rental rates] in the Blacksburg, VA, community, and incubator space did not include wet chemistry laboratory space needed for research work in chemistry and material science. [However,] desks, chairs, and cubicle dividers were purchased [from Virginia Tech surplus property]. Overhead costs were kept low.

NanoSonic has been active in receiving awards for technical and business achievements, and these awards have been useful because they are visible to potential customers.

More on NanoSonic and other photonics commercialization success stories can be found in Engineering a High-Tech Business: Entrepreneurial Experiences and Insights, edited by José Miguel López-Higuera and Brian Culshaw.

New SPIE Press Book: Engineering a High-Tech Business: Entrepreneurial Experiences and Insights

The personal stories from NanoSonic founders and 14 other optical technology entrepreneurs fill the pages of a new SPIE Press book, Engineering a High Tech Business: Entrepreneurial Experiences and Insights. The 276-page book presents a diverse collection of essays, articles, and case studies reflecting a wide variety of personalities, motivations, and aspirations of high-tech entrepreneurs. Edited by José M. López-Higuera and Brian Culshaw, the book also includes chapters on startup funding, the changing nature of intellectual property, and similar matters.


About NanoSonic

NanoSonic, Inc. develops revolutionary, molecular self-assembly processes that allow the controlled synthesis of material structure at the nanometer level and the manufacturing of new materials with designed novel and useful engineering constitutive behaviors. Most of these materials have the added advantage of being synthesized at room temperature and pressure on a wide variety of substrate materials using an environmentally benign process.

Electrostatic self-assembly (ESA) is the technique that Virginia Tech students and staff developed, demonstrated, and later patented. It allows the formation of thin-film coatings of multiple materials—polymers, nanoclusters, biomolecules, and other constituents—conformally onto the surfaces of substrates such as optical fibers. ESA allows the ultra-uniform formation of multiple, nanometer-thick layers of material into functional ultrathin films.

NanoSonic has licensed nine patents using ESA processing from Virginia Tech and is establishing its own intellectual property portfolio to enable process, material, and device commercialization.

NanoSonic was named Small Business Success Story of the Year for 2006 by Virginia Business magazine, and it earned an "R&D 100" award from R&D Magazine for the development of its Metal Rubber™ Textiles. Metal Rubber Textiles are low-weight, highly flexible functional fabrics that can act as an electromagnetic shield or a sensor for "smart" clothing, medical instrumentation devices, and flexible solar arrays. The unique nanotechnology manufacturing process used to create these materials allows constitutive properties to be built in as they are produced.

Richard Claus
Richard Claus is president of NanoSonic and a former faculty member at Virginia Tech's College of Engineering. He is involved in the design and use of smart materials for advanced engineering.

Jennifer H. Lalli
Jennifer H. Lalli, vice president of business development for NanoSonic, has a PhD in polymer chemistry and is responsible for the development of Metal Rubber™ at the company.

DOI: 10.1117/2.4200807.05

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