Nanovation began its optical-component business with a semicharmed existence, calling upon founders from Northwestern University in Chicago and some outside assistance from MIT to design MEMS structures used for advanced waveguides in fiber communications.

Sure, applying the technology to switches and splitters would be challenging. But venture capitalists were forgiving of photonic-component developers even in the post-dot-com-crash environment.

Yet there was always something rushed about the startup's early plans. The venture company backing the founders inexplicably suggested a Miami headquarters for Nanovation, close to neither its Chi-cago-area roots nor to its manufacturing facility in Northville Township, Mich. When Nanovation made an early presentation to the press in 1999, all the glitzy hype seemed aimed at gaining Nanovation an early IPO.

Nanovation made valiant efforts to improve its practices in 2000, spinning out an interesting photonics CAD software company, Apollo Photonics, and showing off early prototypes of several switches and splitters. The board was reorganized, the Florida offices were closed and the founders gave up talk of quick riches.

With the sustained slowdown freezing all venture capital in telecom markets, Nanovation's efforts over the last 18 months at improving credibility seemed to be for naught. When a new round of financing fell through in mid-July, the company had to lay off two-thirds of its staff. On July 26, Nanovation filed for Chapter 11 bankruptcy and shut down Apollo Photonics. While Nanovation still could be a player in the MEMS-based components field, there is an equally likely chance it could spend the remainder of the year in a slow spiral downward.

Monday-morning quarterbacks might say Nanovation would have been better off eschewing the hype and the hope of an early IPO, but would that have made a difference? By the end of the fourth quarter, will quieter startups like Chorum and Optical Switch Corp. really be in better shape, or will the tsunami swamp all with equal fervor?

Ultimately, it makes sense for the engineer founding a startup to minimize the necessity of venture funding while avoiding overambitious PR like the plague. But in a wretched year like this one, being low key still is no guarantee of success.