Khosla Biofuel IPO Draws Doubters

by Antonio Regalado (Technology Review) As yet another biofuels company prepares for a stock offering, some wonder if the company is worthy of going public at all.
...Technology Review asked Khosla whether pre-revenue biofuels companies should be going public. Khosla sent back a detailed memo explaining why biofuels is not like nanotech. Here's a summary:
Existing markets: Biofuels are end applications with large markets, not just technologies.
Proven technology: In many cases the manufacturing or yield of technology has been proven.
Big payoffs: The payback from success is huge. That was not always true in biotech and nanotech, where there is more risk from competitors. In biofuels, the markets are so huge that if 10 companies produced the same product, each could be a billion-dollar business without interfering with the others.
Predictability: If a company can give investors accurate expectations for the next two to three years, then they can consider an IPO. This is true of biofuels now but not of nanotech in 2004.
Khosla's main point is that the fuels market is gigantic, whereas Nanosys was all about technologies looking for problems to solve. READ MORE