Nanotech startups are great investments and have great technological potential, according to venture capitalists, but like a regrettable number of IT startups, many need to learn simple business rules such as delivering an actual product and producing revenue.

Speaking at the New York Venture Group's MasterClass Forum, a panel discussion for VCs and entrepreneurs in New York on Thursday, Edward Moran, director of product innovation for Deloitte & Touche, said that in the last two months he's seen a "real uptick" in the number of proposals for nanotech startups. About "10 companies a week coming forward with business plans," Moran said.

But not all the plans are worth pursuing. Many hopeful entrepreneurs are scientists and researchers armed with the technical knowledge to make nanotech work, but no business savvy. "There are a lot of companies deficient in how to bring a product to market," said J.P. Morgan Partners senior associate Jason Friedman. J.P. Morgan addressed that problem in February, he said, hiring Hewlett-Packard vet Alan Marty to serve as an "executive-in-residence." Marty's job is to work closely with potential entrepreneurs, helping them from concept to execution.

Glenn Falcao of Bessemer Venture Partners said properly guided startups should prove not only rewarding investments, but a major source of new technological breakthroughs. "If you look at the semiconductor industry, a lot of the innovations didn't happen at Intel, they happened at smaller companies. I think this is going to pan out the same way."