peHUB.com, a web site for private equity investors, says there are promising investment opportunities being created by "plastics paranoia" -- namely, capitalizing on the public's fear of bisphenol A. Senior writer Alexander Haislip posted a column today headlined "Plastics Paranoia Poses VC Profit Potential." He writes that even if some of the studies critical of BPA may not be correct, "doubt certainly opens up opportunities for competition. After all, BPA production is a $6 billion a year business -- and both investors and entrepreneurs should see this as a big fat opportunity."
But working with plastic is not without its challenges. For investors, it means getting garlic, crucifixes and holy water to tread into the badlands of materials science, where companies are quietly killed in the crib when their science projects fail to yield real products. It means having to work Dow, Dupont and dozens of other major chemical companies, learning to license effectively and optimizing the OEM process. And it means pulling products out of laboratories, hand-holding scientists and engaging non-techie executives and entrepreneurs. Talk to the investors who are putting their money into plastics and you'll hear variations on the same theme: Tomorrow's biggest successes are going to be driven by materials. "The big gains will come from manipulating molecules instead of manipulating bits," says Martin Lagod, co-founder of Firelake Capital Management, which invests in both private and public companies focused on materials science and energy, water and information technologies. "This is going to be a major trend that's going to play out over the next 10 to 40 years."Haislip wrote about some of the BPA replacement opportunities in a more general column about plastics in February for Venture Capital Journal. Typically I think by the time the financial press discovers a business opportunity, it's too late for investors to cash in. But with peHUB urging investors to take a look, processors, compounders and material suppliers can expect to see more interest from venture capitalists.