We report a novel approach of seeded emulsion polymerization in which nanocrystals are used as seeds. Ultrasmall biocompatible polymer-coated nanocrystal with sizes between 15 and 110 nm could be prepared in a process that avoids any treatment with high shear forces or ultrasonication. The number of nanocrystals per seed, the size of the seeds, and the shell thickness can be independently adjusted. Single encapsulated nanocrystals in ultrasmall nanobeads as well as clusters of nanocrystals can be obtained. Polysorbat-80 was used as surfactant. It consists of poly(ethylene glycol) (PEG) chains, giving the particles outstanding biofunctional characteristics such as a minimization of unspecific interactions.