As longtime readers of the Motley Fool know, I'm a big fan of Harris & Harris (NASDAQ:TINY), and I believe it's one of the best and smartest ways to invest in the emerging field of nanotechnology.

I like to temper investors' expectations, on occasion. And with the stock having climbed from just less than $10 a share in late August to $14.60 today, now is one of those times.

Earlier today, Lux Research, the leading nanotechnology research firm in the country, issued a press release announcing that nanotech venture capital is expected to exceed $650 million in 2006 -- an increase of 35% from 2005.

While this is a positive development, the release also reminded its readers that of the 171 venture-backed nanotech start-ups funded since 1995, only 18 -- or about 10% -- have reached a successful exit in the form of either an IPO or an acquisition. For all of nanotech's promise, investing in it remains a risky game.

The press release went on to warn that this small sample of IPOs makes developing meaningful valuations for future IPOs equally risky. (To this end, it is worth noting that Nanophase (NASDAQ:NANX), which went public back in 1997 at $8, is today trading at $6.76; Nucryst (NASDAQ:NCST), which went public last December at $10, is now trading almost 60% lower.)

All of this brings me back to Harris & Harris. As I have written in the past, I really like the company's investments in Evolved Nanomaterials Sciences, Cambrios, and Nantero, but there is no guarantee that these companies will have a successful IPO anytime soon.

In its latest letter to investors, the company states that "a continuing lack of IPO opportunities could lead to companies staying longer in our portfolio as private entities still require funding. In the best case, such stagnation would dampen returns, and in the worst case, could lead to write-downs and write-offs."

Do I believe this will happen on a big scale to Harris & Harris' investments in 2007? No. But I do appreciate management's candid assessment of the situation, and would like to use it as an opportunity to encourage investors to recall why they are investing in Harris & Harris.

Nanotech's big payoff will be reaped over a long period of time. As such, it is worth remembering that sometimes a tiny dose of patience can be an investor's best friend. Translation: Harris & Harris' day will come; just don't expect it to be tomorrow.

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Fool contributor Jack Uldrich is the author of two books on nanotechnology, including Investing in Nanotechnology: Think Small, Win Big. He owns stock in Harris & Harris.The Fool has a strict disclosure policy.