Bringing New Materials to Market" (1995 Technology Review article)

Tom's own publication. Twenty-year payback for new materials companies; at 8% IRR, $1 invested today must return $20 in twenty years. Used to explain why venture capital avoids materials.

There's an article that will be posted called "Bringing New Materials to Market." I mentioned Technology Review — this was published in 1995 in Technology Review. It talks about the fact that it takes twenty years from the first discovery of a new material to actually making large-scale economic development, large-scale production. That's one of the reasons venture capitalists don't like to invest in new materials companies, because it's a twenty-year payback. As the author of this — which was me — pointed out in 1995, if you want a return at eight percent, and you're going to invest a dollar today but not get your profit back for twenty years, at eight percent, which was at the time a typical internal rate of return that companies had for investments, you have to return twenty dollars twenty years from now. That's a lot.