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Jan. 15, 2004 — In another sign that the nascent nanotechnology sector is evolving into a viable area of specialization, Harris & Harris Group Inc. (Quote, News, Web) announced this morning that Daniel Leff, a senior associate at Sevin Rosen Funds, will join the firm as executive vice president and managing director on Jan. 19. Leff will establish and run the firm’s West Coast office in Los Angeles.
Leff, 35, is a good fit for Harris & Harris, a publicly traded venture firm that invests in nanotechnology, MEMS and microsystems. “There is a very short list of people with venture capital experience who also have the ability to talk business and nanotechnology,” said Doug Jamison, vice president. (The company announced Wednesday that Jamison will become president, chief operating officer and chief financial officer of Harris & Harris when Mel Melsheimer retires at the end of the year.)
Leff is among a small cadre of nanotech-focused venture capitalists at leading VC firms. Two deals on which he played a pivotal role at Sevin Rosen included Nanomix Inc. (Profile, News, Web), a developer of chemical sensors employing carbon nanotubes as sensing elements, and InnovaLight, a developer of next-generation solid state lighting technologies. He also worked on deals in other technology fields at the firm.
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For H&H, technical acumen is a prized asset. A large part of evaluating a prospective deal, company executives say, is scrutinizing a company’s technology. And Leff is uniquely qualified. He earned a Ph.D. in physical chemistry from the University of California, Los Angeles, where he was the first graduate student to work under nanotechnology pioneer James Heath (now at the California Institute of Technology), who was himself a protégé of Nobel laureate Richard Smalley (News, Web). Leff also earned an MBA from the Anderson School at UCLA. Before Sevin Rosen, he was at Redpoint Ventures and Intel Corp., in addition to a stint as an entrepreneur.
Leff said he tries to take a dispassionate, pragmatic approach to the sector. He views nanotechnology not as a single investment or market space, but rather as a collection of enabling and potentially disruptive technologies that can solve fundamental problems in many industries. Nevertheless, he said, “I think there’s going to be a great deal of value created in a meaningful time frame both in terms of wealth creation and quality of life.”
As nanotechnology heats up on Wall Street (see “Nano crossing into ‘speculative space’ “), venture capitalists with Ph.D. nanotech credentials could become increasingly sought after.
“On the one hand, there’s not a huge number of companies that investors have made lots of money on,” said Clint Bybee, a managing partner at ARCH Venture Partners who has worked with Leff on venture deals. On the other hand, he said, “there is clearly a trend toward, and huge dollars from, grant agencies flowing into this area.”
ARCH happens to be among the moneymaking investors. The company seeded Nanophase Technologies Corp. (Quote, News, Web), the nanomaterials manufacturer that Harris & Harris also invested in. Nanophase went public in 1997.
As for venture firms circling the sector, Bybee said, “you’ll see more and more.”