Thursday, a much-talked-about Palo Alto, Calif., company, Nanosys Inc. (www.nanosysinc.com), is announcing it has attracted what these days passes for real money: $30 million in a second round of financing from top-tier venture capitalists that include Polaris Venture Partners, Venrock Associates and offshore investors like the China Development Industrial Bank. That gives Nanosys a $47 million war chest.

The company, which is developing nanowires, nanotubes and nanodots, is moving to first create chemical and biological sensors. Along the way, it has scooped up 75 patents held by top scientists in the field, including Harvard University's Charles Lieber. Nanosys also has attracted some tech luminaries to its board, including Bob Metcalfe, a father of data-networking technology called the Ethernet, and Silicon Valley marketing pioneer Regis McKenna.

Nanotechnology, the direct manipulation of molecules and atoms to create new products, has been buzzed about for some time as the next new thing -- even though experts say commercial applications are years away.

It may take sophisticated microscopes to see nanotechnology's products, but the money pouring into the field is hard to miss.

The industry gained new visibility on Dec. 3 when President Bush signed a law authorizing federal research and development subsidies of $3.7 billion over the four years, beginning next October. The Oval Office photo opportunity for nanotechnology, coincidentally, came the same day that Nanogen, one of a handful of publicly traded start-ups, disclosed that it had received a patent for a nanoscale manufacturing method that it said could be used to make advanced microchips and flat-panel displays. Nanogen's stock more than doubled that day, leading the sector higher.

Entrepreneurs say that the nanotechnology investment climate is warming up just in time to meet their growing capacity to put investors' money to work expanding research and bringing innovations to market.

''We are really close to the takeoff point where the industry could absorb a lot of money,'' said David Ludvigson, chief financial officer of Nanogen, a 10-year-old developer of tools for genetic testing that is one of the few nanotech start-ups to go public before the bursting Internet bubble soured investors on technology stocks.

Nanotechnology draws its name from the nanometer, which is a billionth of a meter, or 100,000 times as thin as a human hair. Individual molecules, tiny organisms like viruses and the smallest features of products like microchips operate in a nanoscale landscape.

Many industries used nanoscale products and processes decades before the term nanotechnolgy became a recognized concept on Wall Street. In the 1930's, for example, Kodak figured out how to insert a layer of nanoscale silver particles in its film to filter light. But nanotechnology did not catch the fancy of investors until the 1990's, when ingenious new software and computer-controlled tools expanded the possibilities for manipulating small-scale processes, designing new materials and accurately measuring their performance.

The new generation of nanomaterials is already taking commercial root. Nanoscale clay particles strengthen car bodies. Coatings made with aluminum-titanium nanoparticles add to the durability of boiler components and submarine periscopes for the Navy. Carbon nanotubes add stiffness to Babolat tennis rackets. And pants are being made with techniques that alter the structure of cotton to create nanoscale whiskers that make the fabric more stain resistant.

Analysts say that such developments are simply a hint of what is to come in nanotechnology, which the National Science Foundation predicts will contribute $1 trillion a year to the United States economy by 2015.

Such forecasts matter to policymakers, but pioneers with products to sell are focusing on the immediate challenges of building their businesses.

''The timing is good for taking our company to the next level,'' said Dr. David Reisner, chief executive of Inframat, a privately held company in Farmington, Conn., that uses nanomaterials in producing specialty coatings. After six years of existing primarily on research grants from the Defense Department, Inframat expects to raise $6 million to $8 million next year from venture capitalists or large private-sector customers to expand operations.

Dr. Reisner was one of numerous executives at NanoCommerce, a trade show in Chicago earlier this month, who said they planned to seek new investments in the coming months, in some cases tens of millions of dollars.

Integrated Nano-Technologies, based in Henrietta, N.Y., might pursue as much as $30 million from venture capitalists next year, said Stephen S. Nazarian, the company's spokesman. Integrated has developed prototypes of a portable system that quickly identifies biological agents like anthrax when they bind to fragments of DNA it mounts on a microchip. But Mr. Nazarian said that the company, which has relied so far on individual investors, thinks that potential business partners might be a better bet than venture capitalists to finance the next stage of its expansion.

''We have had a lot of unsolicited interest from Asian governments and potential distributors of products using the technology,'' Mr. Nazarian said.

Others at the Chicago show, like Lewis Gruber, president and chief executive of Arryx, which has developed a tool for manipulating individual cells and even smaller particles with light beams, said they were barred by securities regulations from commenting on their plans -- generally a sign that they have started to raise money.

Kleiner Perkins Caufield & Byers, the influential Silicon Valley investment firm that has generally steered clear of nanotechnology, is also reticent. According to some reports, Kleiner has joined a round of financing that ZettaCore, a four-year-old start-up based in Denver, is expected to announce in January. ZettaCore is developing a nanoscale computer memory, which is based on switching the electrical charge on a molecule the company has designed.

Kleiner and ZettaCore declined to comment on the reports. Vinod Khosla, a general partner at Kleiner, said that the sector was ''overheated'' and attracting too much venture capital. But, he added, Kleiner expects to play a part in it.

Analysts say it is impossible to sort out how much of the improving climate reflects the general upturn in the economy and the brightening picture for nearly all technology stocks. But at least some of the optimism is based on developments within the nanotechnology sector itself, like the bill signed by President Bush. ''No screaming headlines greeted this event, but astute investors will recognize a buy signal,'' Josh Wolfe, a co-founder of Lux Capital, a venture capital and technology consulting firm in New York, wrote in an e-mail message to subscribers of his nanotechnology newsletter.

Mr. Wolfe said last week that investors should remember that most nanotechnology companies would not be chosen to receive federal financing. He also predicted that the nanotechnology boom would lead to the creation of many companies that will be unable to attract investors. But, he added, the pool of players will not approach the proportions of the Internet boom, because an entrepreneur needs more expertise and money to get started in nanotechnology. ''This time around,'' he said, ''we're not talking about something that could be done by two guys and a dog in a garage.''

It might be just as hard, though, for investors to strike it rich in nanotechnology as it was in the dot-com gold rush. Some of nanotechnology's most promising concepts, like computers that replace silicon transistors with single molecules, are at least a generation away from market. And for all the spectacular properties of new materials like carbon nanotubes, which are many times stronger than steel, no one has yet demonstrated how to make money from them. Many experts predict large multinationals will come to dominate markets for most nanoproducts long before investors in startups can get rich in a public offering.

Fear that the technology is being oversold has also slowed investment, some analysts say. So has uncertainty about potential environmental hazards -- fears that have been stoked by many of the same critics who have battled the spread of agricultural biotechnology.

One sign that the sector is still mainly in the developmental stage is that one of the most anticipated public offerings next year is expected to come from Nanosys, which despite raising $39 million last June from a group of major venture capital firms does not expect to have its first commercial product before 2006. Based in Palo Alto, Calif., Nanosys is building a broad patent portfolio of related to nanoscale wires, rods and dots that could be used in products as diverse as solar cells, biosensors, and computers. Like many dot-coms, much of its credibility derives from its executive team, a group of longtime entrepreneurs who have taken other technology companies public or sold them to larger companies.

''The I.P.O. window will be opening, but there may not be a raft of nanocompanies ready to go,'' said Steve Jurvetson, a partner in Draper Fisher Jurvetson, a Silicon Valley venture fund that has been the leading investor in early-stage venture capital nanotechnology companies. ''There are still more entrepreneurs who want to raise money than investors.''

Still, Mr. Jurvetson said, valuations are clearly rising for many private nanotechnology companies. One start-up his firm has decided to back recently received five competing financing proposals, he said.

Other signs of the times include follow-on offerings, like the one filed with the Securities and Exchange Commission by Harris & Harris, an investment firm with holdings in several nanotechnology companies, which is seeking to sell two million new shares. The company's shares, which trade on the Nasdaq, have more than tripled this year, closing 4.1 percent higher at $8.65 on Friday. The stock trades under the ticker symbol TINY.

Correction: Dec. 25, 2003

An article in Business Day on Monday about increasing investment in nanotechnology referred incorrectly to Lux Capital, whose co-founder commented on the trend. It is a venture capital firm that advises investors; it does not also offer technology consulting services.

Intel Corp. , facing roadblocks in improving semiconductors, is exploring a new tack with a high-profile start-up business called Nanosys Inc.

The companies have agreed to collaborate to study the possibility of using Nanosys's technology in Intel chips. Nanosys, one of many entrants in a field called nanotechnology, specializes in techniques for making microscopic structures out of silicon and other materials common to the semiconductor industry. Nanosys, of Palo Alto, Calif., and other companies have discussed applying threadlike structures called nanowires to sheets of plastic that could be churned out on rolls, like paper. Such flexible circuitry, in theory, could be produced more efficiently than conventional chips and used in many new ways.

Intel and Nanosys declined to give details about their collaboration. But Laura Anderson, an Intel spokeswoman, said the agreement focuses on memory technology and includes arrangements to share patents for a limited time. "This work is purely investigational," Ms. Anderson said.

Much of Intel's research focuses on squeezing more transistors onto chips. Packing more circuits in the same amount of space creates chips that are faster, store more data and consume less power.

Intel, of Santa Clara, Calif., is just beginning to ship chips whose circuitry has a maximum size of 90 nanometers, or billionths of a meter. The company has demonstrated some technology with features as small as 22 nanometers, though such chips aren't expected to enter production until 2010 at the earliest.

Those dimensions tax conventional photographic techniques, which chip makers use to define circuits on silicon wafers. But nanotechnology companies manufacture in a different way, churning out tiny parts through chemical processes in the equivalent of flasks.

Nanowires are expected to be used to make transistors just a few nanometers in size. Computer titan Hewlett-Packard Co. , for example, has demonstrated ways to crisscross the tiny strands and store data with 10 times the efficiency of conventional memory chips, said Philip Kuekes, an H-P senior computer architect.

Researchers hope to exploit some more radical ways that materials behave at tiny sizes. Some tiny crystals can be tuned to emit different light based on their diameters, for example, and can transfer electrons more efficiently than materials blended in a chip factory, Nanosys says.

"The fact that companies such as Intel are looking to us has to do with the ability to engineer the properties of materials in an entirely new way," said Stephen Empedocles, a Nanosys co-founder and director of business development.

Nanosys, a closely held company that employs a number of nanotechnology pioneers, has raised about $70 million to date. A $38 million funding round last spring included an undisclosed investment from Intel. A key target for the company is solar energy; Nanosys andMatsushita Electric Works Ltd. are working on roofing tiles that can generate electricity and should be in production in 2006, Mr. Empedocles said.

Intel also is placing multiple bets. In 1999, it invested in a Norwegian company, Opticom AS A, and a subsidiary that is developing memory chips based on flexible polymers. In 2000, it invested in Ovonyx Inc., a start-up business working on memory technology that exploits changes in what are called amorphous materials.

When it came time to invite a representative company to attend President Bush's signing of a bill last December authorizing $3.7 billion in federal spending on nanotechnology over the next four years, a three-year-old Silicon Valley company named Nanosys got the call.

It is easy to see why. Painstakingly assembled by experienced entrepreneurs, famous academic researchers and big-name venture capitalists who know how to dazzle Wall Street, Nanosys is the epitome of a start-up shooting for business glory.

It brandishes a portfolio of impressive patents, covering processes like ways to make wires one ten-thousandth the thickness of a human hair, and is pursuing research projects that could affect consumer electronics, energy and communications.

But for all its glamour and promise, Nanosys does not expect to sell products commercially until 2006. For actual sales and profits, one needs to look to a more prosaic company, Nanofilm, a developer of optical coatings that is based in an industrial park in Valley View, Ohio, outside of Cleveland. It has been profitable since 2001.

''We're the quiet company,'' said Scott E. Rickert, a 51-year-old former chemistry professor at Case Western University who has been president of Nanofilm since he founded the company in 1983.

While Nanosys represents the aspirations of many of the 400 to 500 nanotechnology ventures that analysts say have sprung up in recent years, Nanofilm's story may actually be more relevant to the start-ups in the field struggling to survive. Together, the two companies show the diversity of the nanotechnology business landscape and some of the uncertainties it holds for investors.

Nanotechnology, a term based on the nanometer, which is one-billionth of a meter, has attracted investment not only from privately held start-ups, but also from giants like I.B.M., General Electric and DuPont, which are eager to exploit the potentially valuable properties of materials so small that their dimensions can be measured in molecules. The federal government estimates that nanotechnology, a catch-all label for products and processes that operate on the molecular scale, will have a $1 trillion economic impact by 2015.

It may take that long to sort out the business models best suited to thrive in the nascent field.

Nanosys, based in Palo Alto, Calif., offers a model that is particularly compelling to Wall Street. Its neighborhood is home to Hewlett-Packard, Stanford University and some of Silicon Valley's most prestigious law firms and venture capitalists -- the entrepreneur's equivalent of beachfront property. Its scientific advisory board includes luminaries like [Dr. Charles M. Lieber (born 1959)] of Harvard, a leader in research on how to build nanoscale wires, and [Dr. Armand Paul Alivisatos (born 1959)], a chemist at the University of California at Berkeley whose research helped found the Quantum Dot Corporation, a start-up company that makes crystalline nanoscale tags that are used in the study of cell behavior.

[Nanosys]'s chief architect and chairman, [Lawrence Alan Bock (born 1959)], 45, was already well known as a biotechnology entrepreneur and, by his description, was semiretired when he became interested in nanotechnology in 2000. ''I had done reasonably well in biotech,'' he said, summing up his track record involving 14 start-ups, with 12 of them going public or sold to other companies for a total of more than $1 billion.

Dr. Rickert of Nanofilm, by contrast, had no business experience and, he soon discovered, no ability to attract investment from venture capitalists when he formed his company. Instead of having wide-ranging patents from leading university laboratories, he had only his own idea for a new, unusually rapid way to make ultrathin, superrepellent coatings for glass, plastic and metal surfaces.

When he changed his company's name to Nanofilm from Flexicrystal in 1985, the ''nano'' prefix had none of the allure it had when Nanosys was started in 2001. Outside molecular research circles, the name conjured up little except ''nanu-nanu,'' the way Robin Williams's goofy alien on the television show ''Mork and Mindy'' said goodbye.

''I got a lot of grief,'' Dr. Rickert said in an interview at the company's headquarters.

[Lawrence Alan Bock (born 1959)]'s track record, the growing interest in nanotechnology in the late 1990's, and his strategic approach produced a much different reception for Nanosys. He tells visitors he spoke to 1,000 researchers over an 18-month period before he and his co-founders, Calvin Y.H. Chow and Steven Empedocles, settled on a name, business plan and financial structure for Nanosys.

Nanosys's initial goal is to use its expertise in nanoscale silicon structures and related inorganic materials to build sensors and other simple products that its business partners would manufacture. In time, it hopes those efforts can become the foundation for more complicated devices like silicon solar panels, powerful memory chips and thin films for flexible electronic displays.

In essence, the company is creating a miniportfolio of nanotechnology bets that will allow it to pick out the most promising areas as some fall by the wayside and others arise. Nanosys has raised $55 million from venture capitalists like Venrock Associates, the venture arm of the Rockefeller family, and smaller firms like Lux Capital and Harris & Harris that are specializing in nanotechnology and related areas.

Nanosys has also raised more than $15 million from government research grants and deals with business development partners like DuPont, Intel, Matsushita Electric Works and In-Q-Tel, the Central Intelligence Agency's investment arm. Strategic alliances with big businesses are fraught with dangers for small companies, but one thing Nanosys and Nanofilm have in common is the belief that they will need such relationships to turn the new technology into profits.

With Nanosys's second round of financing, which brought in $15.5 million in 2002, it far surpassed the total invested in Nanofilm over its entire existence. Nanofilm started with capital gathered from a small group of individual investors led by Donald McClusky, who had recently retired as vice chairman of Goodyear when Dr. Rickert set out to commercialize his thin-film technology.

Dr. Rickert and Mr. McClusky managed to raise $1 million from friends and family by 1988. That supported enough development work for Dr. Rickert to persuade LensCrafters in 1989 to pay Nanofilm to build two 1.5-ton robots to put its high-strength, protective nanocoating on premium eyeglasses. LensCrafters also agreed to pay a $4 royalty for every pair of glasses sold. Nanofilm became profitable the following year.

But Dr. Rickert's reliance on his relationship with LensCrafters backfired in 1991 when the Persian Gulf war broke out, the economy slumped and LensCrafters decided to shut its manufacturing in favor of outsourcing its production. Nanofilm shrank from 17 employees to 5. Dr. Rickert eliminated his salary and the others were cut to 65 percent.

''We nearly went bankrupt,'' Dr. Rickert said. The company survived only because a lens-cleaning solution it had developed turned out to be popular with opticians and grew into a profitable line of products under the Clarity brand name.

Today, Nanofilm's films use nanostructured properties to keep rain off binoculars, preserve the shine on expensive faucets and protect display screens on A.T.M.'s and laptop computers. Other films from the company resist fogging or are scratch resistant.

''The company we are most like is International Flavors and Fragrances,'' said Dr. Rickert, referring to the world's largest producer of food flavorings and scents for household products and cosmetics. ''We sell very small quantities of our materials at high prices. I can do it anywhere in the world with just a few people.'' In fact, Nanofilm has become a multinational with a small sales and distribution outpost in the Netherlands.

Later this year, Nanofilm will distribute its first consumer product for the auto market -- an antistreaking windshield coating that mimics the nanoscale structures on the surface of lotus leaves that repel dirt. A couple of drums of the material's active compound could be made in a month's time and would be enough to treat every windshield in the world, Dr. Rickert said.

When a raindrop or a bug hits the coating, which is intended to be applied once a year, the pressure melts the surface molecules for an instant, causing anything on the surface to slip away, Dr. Rickert said. But ''it's not perfect,'' he said, noting that because of its electrical characteristics, the film attracts some dust.

Still, such innovations have kept Nanofilm growing and, since 2001, steadily profitable. Revenues topped $15 million last year, Dr. Rickert said. The company began paying dividends to its 40 investors in 2001 and now has 65 employees.

Nanofilm's ambitions, though modest compared with those of Nanosys, are expanding. Dr. Rickert said his goals included increasing revenues to $30 million to $50 million over the next five years.

If Nanofilm hits an area of research that requires a huge, rapid investment with potentially high returns, the company might try to spin that project off into a company backed by venture capital, he said.

Dr. Rickert, however, does not want to expose Nanofilm to venture capitalists and investment bankers who might be impatient for growth and might push to sell the company or take it public. Instead, he said, Nanofilm will borrow money when necessary and continue to pursue joint development agreements with major customers, like its four-year-old partnership with Carl Zeiss Inc., the American subsidiary of the German high-performance optics company.

''We're on an exponential growth curve,'' Dr. Rickert said. ''We feel like it's our decade but it's on our schedule.''

Such caution and focus provide no guarantee against losses. But Nanofilm's approach does prove that profits can be made in nanotechnology.

If the field is to become an important economic engine, in all likelihood there will have to be hundreds of small companies like Nanofilm exploiting different niches.

Whether those smaller companies will be operating in the shadow of a successful giant called Nanosys -- or reminiscing about how sweeping ambitions could not save a well-financed, well-placed start-up -- is harder to predict.

Correction: March 18, 2004, Thursday An article in Business Day on Monday about start-ups in the field of nanotechnology misidentified the former employer of Donald McClusky, who led a small group of investors in a company called Nanofilm. He retired as vice chairman of B. F. Goodrich, not Goodyear.