Comments on: CEO Says Sequoia’s Extinction Reflects Why Semiconductor Startups Are an Endangered Species

By: Robert Green

Robert Green — Thu, 18 Mar 2010 18:18:40 +0000

I see a strong up-to-date list of semiconductor start-ups and they seem to be trying to grow. The list was certainly larger a couple of years ago…

http://www.chipcareers.com/semiconductor-start-ups.htm

By: Mark Jenkins

Mark Jenkins — Sat, 30 Jan 2010 06:44:19 +0000

Dave Shepard was in over his head from Day 1 at Sequoia. He was not, IMO, CEO material and lacked the sense or urgency required in start-ups in highly competitive environments. One sign of this is that he was “furious” and “surprised” when he finally learned of the shutdown. How out of touch with his BOD and investors was he to have been surprised by this? He should have been on top of the financing and well into discussions with the Board and managed the process – even if that meant a decision to shutdown and wind down. To be furious and surprised shows a detached CEO who was not able to ride the Ninja motorcycle of high tech startups – he had no background even of riding a bicycle or tricycle. Hiring a Manager-level person out of bureaucratic TI who lacked start-up experience or venture financing experience to be the founding CEO was a huge mistake from the get-go. Moreover, I know Dave personally and quite honestly I think he lacks the temperment and sophistication for the CEO spot. Maybe as a COO or V.P. level R&D role in engineering. Not running a startup or interacting with VC or negotiating transactions with major companies. The VC should have brought someone in with experience to sell the company once Dave was seen to lack the tools for that role.

By: peHUB » peHUB First Read

peHUB » peHUB First Read — Mon, 31 Aug 2009 13:24:10 +0000

[...] Dave Shepard of VC-backed Sequoia Communications, which shut down earlier this month: “I think the venture-backed model for semiconductor startups [...]

By: Steve Domenik

Steve Domenik — Fri, 28 Aug 2009 05:37:56 +0000

I am sorry that I missed the session. My own take is that the malaise is pretty widespread. I would tend to agree with the panel’s consensus as you describe it.

The new fine geometry processes have astronomical tooling costs and the capability of today’s digital products makes them really expensive to design. There may be a few affordable analog plays left, but I haven’t seen any fundable new ones for a while. Analog chips can often be built on trailing processes with lower tooling costs and tend to be have a lot fewer transistors than digital designs.

By: Bruce V. Bigelow

Bruce V. Bigelow — Fri, 28 Aug 2009 03:34:24 +0000

Thanks for weighing in Steve. San Diego’s CommNexus recently had a special interest group session on fabless chipmakers, and the consensus seemed (to me at least) that economic conditions today are far less encouraging for fabless chip startups than they were a decade ago. Is it possible, though, those panelists represented just a segment of the overall market?

By: Steve Domenik

Steve Domenik — Fri, 28 Aug 2009 02:49:17 +0000

I’m a VC and have been in and around the chip business for 35 years. I don’t think that the sky is falling for fabless chip companies; it already collapsed for many of the reasons that Shepard mentions. VC’s would invest for big returns, but there just aren’t any straight-up fabless chip deals that realistically offer them. Development costs are too high and the real time to market is too long.

I’d urge caution when reading the M&A values quoted. The sale of busted deals is seldom reported and the effect of large public M&A dominates the average in many of the oft quoted studies. Shepard is very optimistic when he quotes $75M-$100M for chip start-ups. Sequoia, for instance, did some really good stuff and couldn’t be sold, even by an able CEO.

By: Wireless Reader

Wireless Reader — Thu, 27 Aug 2009 06:02:58 +0000

Interesting article. Don’t think it’s time to declare the sky is falling yet for fabless semiconductors. VC’s will always be around to invest and work with companies that have a chance for big returns. It’s unfortunate for this company to run into bad economic times and have a business that no longer was needed considering Qualcomm and Infineon probably had similar or better performing chips out sooner.