This paper provides the first empirical information about barriers related to the diffusion of nanotechnology, a general purpose technology. Our analysis is based on the findings from a state-wide survey of companies in North Carolina, USA. We find that the primary barrier is lack of access to early-stage capital, and the extent of this barrier is greater when the company contributes to the value chain for nanotechnology through R&D as opposed to through products or services. Another barrier is lack of access to university equipment and facilities, a problem greater in companies involved in nanotechnology research. From a policy perspective, our analysis suggests that state governments could act as venture capitalists to overcome market failure in the capital market, and that states could provide incentives to universities through public/private centers of excellence for sharing capital equipment and facilities with nanotechnology companies.