Archive for June, 2007

Breakfast with Tom Anyos of Technology Ventures Corporation

Written by Sean Murphy. Posted in Events, skmurphy

Francis and I had a great breakfast yesterday at Hobee’s with Tom Anyos, the director of California operations for Technology Ventures Corporation (TVC). Formed in 1993 by Lockheed Martin to commercialize technology that had been developed at Sandia National Laboratories, TVC expanded its focus to California and Nevada in 2002. The breakfast was to review for a talk I will be giving as a part of “Entering the Entrepreneurial World” in Menlo Park on July 17 and Pleasanton on July 18.

TVC runs an extensive and very professional program focused on entrepreneurial education in Silicon Valley. I blogged about them last October in “Continuing Education in Entrepreneurship” in the hope that more entrepreneurs would take advantage of the opportunities they offered and spend a little more time to “prepare to win.” The July sessions are the first in a series of six monthly events:

  1. Entering the Entrepreneurial World
  2. Market Research & the Marketing Plan
  3. Financial Management
  4. Preparing & Presenting the Business Plan
  5. Operations Startup, Monitoring & Human Resources
  6. The Term Sheet & Lessons Learned

The course is designed to orient the new entrepreneurs to what’s needed to form, plan, finance, manage, and expand a technology-based business. This first session will have three speakers: an experienced entrepreneur (or reasonable facsimile thereof), an attorney who focuses on early stage firms, and a venture capitalist who focuses on early stage firms. The intended audience is an entrepreneur with a technology-based product. The presentations should leave you better equipped to analyze the business and financial potential of a product and to understand the implications early stage legal issues.

In addition to their ongoing educational activities, TVC also works with select entrepreneurial teams to refine their plan and their product, raise funds, and become a going concern. Tom indicated that TVC keeps score on three key factors: attendee feedback and comments from the training sessions, the amount of money raised for their clients, and the number of jobs created. Since 1993 they have helped in the formation of more than 90 businesses, more than 850 million dollars in financing, and the creation of over nine thousand jobs.

But that’s not the best part. This is your tax dollars at work–in that Lockheed Martin is a government contractor–so if your team is accepted as a client, TVC takes no fees or equity participation of any kind, either from entrepreneurs or investors. Come to one of the July sessions if you have time, but plan to attend at least one in the next six months that addresses an area of weakness for your team. Take the time to familiarize yourself with TVC’s approach and talk to one of the members of the TVC California team.

If you would like to submit an executive summary (no confidential or proprietary info please) to TVC you can use the form here.

W. J. King’s “Unwritten Laws of Business”

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

A Useful Collection of Business Rules of Thumb

There is some useful guidance in this slim volume. Originally written in 1944 as the Unwritten Laws of Engineering by W. J. King, it was revised in 2001 and again in 2007 by James Skakoon and re-titled the Unwritten Laws of Business. It would still be very useful for engineers in the first year or two on the job or newly promoted to manager, but much of it is more broadly applicable and a few of the rules are excellent guidelines for managing yourself in a startup.

Demonstrate the ability to get things done.

This is a quality that may be achieved by different means in various circumstances…It can probably be reduced, however, to a combination of three basic characteristics:

  • initiative–the energy to start things and the aggressiveness to keep them moving briskly.
  • resourcefulness or ingenuity–the faculty for finding ways to accomplish the desired result.
  • persistence (tenacity)–the disposition to persevere in spite of difficulties, discouragement, or indifference.

We often think of “the energy to start things” as the hallmark of an entrepreneur, but equally important is the ability to persevere. If you are an idea person, it’s best to find someone with Attention Surplus Disorder and tolerate their desire to deliver on current commitments before moving onto the improvements and new opportunities that beckon so invitingly.

Confirm your instructions and the other person’s commitments in writing.

Between poor memory, poor communication, misunderstandings (unintentional and otherwise) and the need to get paid, it’s always a good idea to at least summarize instructions, giving the other person a chance to amend and correct (how different it can look when it’s in writing) before proceeding.

Develop a “Let’s go see!” attitude

Throughout your career people will approach you with all manner of real-life problems resulting from your work. A wonderfully effective response is to invite them to have a look with you–in other words, “Let’s go see!” It is seldom adequate to remain at one’s desk and speculate about causes and solutions and hope to sort it all out.

Steve Blank makes a similar point in “Four Steps to the Epiphany” when he says “there are no facts inside of the building, only opinions.” We often tell clients “You need to leave the BatCave (and not only talk to but listen to strangers!)

Cultivate the habit of seeking other people’s opinions and recommendations.

This is particularly useful advice during a confrontation of any sort. A good first question to ask is “What do you recommend?” Your confronter will usually have thought about it more than you have, and this will allow you to proceed to a productive discussion and avoid a fight…If you have no intention of listening to, properly considering, and perhaps using someone’s information opinion.

This applies especially during conversations with prospects or customers. Note: asking for other people’s input does not mean that you are abdicating your responsibility for the decision, just that it can often give you a better results to take other relevant perspective into account.

Promises, schedules, and estimates are necessary and important instruments in a well ordered business.

In particular, John Jantsch’s suggestions for a “new customer kit” for when the prospect says “yes” constitute a good start on defining your brand promise. Paradoxically it’s most important to prepare this before you’ve made a sale, since a blank look and a mumbled “No one has ever said ‘yes’ before” can often reverse a customer’s decision to buy more effectively than almost anything else you might say. Jantsch suggests the kit should include:

  • What to expect from us next
  • How to contact us if you have a question
  • How to get the most from your new product/service
  • What we need from you to get started
  • What we agreed upon today
  • How we invoice for our work
  • A copy of our invoice

We like to a see a five day (or fewer) implementation schedule included in the data sheet for packaged software. A prospect’s need to understand how and when a new tool will be operational is second only to price in most cases, and only large established firms have the luxury of promises results in seasons (i.e. three months or more). You need to be delivering value within five business days.

Make it a rule to require, and submit, regular periodic progress reports, as well as final reports on completed projects.

This is a “three bird stone” that increases your effectiveness in three areas:

  • Staff meetings are more productive because the discussion can focus on issues not a recitation of recent events. This assumes that progress reports are circulated widely.
  • Explaining status of a project to customers and prospects doesn’t trigger a fire drill.
  • After action (post mortem) meetings are baked into your process so that there is an ongoing focus on “lessons learned” for future projects (and phases of current projects).

This does not mean that you have to stock up on quill pins or carbon paper, a project wiki can be a very effective way to manage these reports (and further reduce e-mail overload). It also avoids making the project manager the neck of the bottle on meeting minutes and decision records.

All in all there is a fair amount of wisdom in the 104 pages of this slim volume, although it may be more useful for your first real job in corporate America (or your promotion to manager). It might also be worth buying a copy if you are in the midst of being acquired by a much larger firm and trying to figure out how to remain employed for the two years you need for your earn out to kick in.

EET Sheds EDA Expertise: Bad News for EDA Startups

Written by Sean Murphy. Posted in EDA, skmurphy

Richard Wallace pens a “Note to Our Readers” in the morning edition of EE Times on-line (hyperlinks added):

Last week CMP Technology, a part of United Business Media and parent company of this newspaper, announced sweeping editorial management changes at EE Times and TechOnline,‘s sister Web site. The changes will accelerate the expansion of CMP’s technology media portfolio and hasten the transformation of our staff to an online media orientation–a historic shift from traditional print-centric publishing.

David Needle in “Tech Publisher CMP Restructures” characterizes this as recognizing reality: “CMP announced a major restructuring that includes shuttering some print titles and cutting about 200 jobs, an 18 percent reduction in staff. The Manhasset, N.Y., tech publisher said the move was prompted by a decline in print revenue and growth of its online and events business.” Richard Wallace continues

The changes involve the consolidation of the EE Times and TechOnline editorial teams while strengthening both brands’ online offerings for design engineers and engineering managers.

Change and attrition are the only constants for journalists today; last week this meant saying goodbye to longtime colleagues and friends. So before the pundits and bloggers go into overdrive, we’d like to introduce our new team, acknowledge the contributions of some departing colleagues and explain what these changes signify.

As a blogger I am barely in first gear so it’s probably safe to comment. To be sure a number of other technology magazines have had their print runs curtailed if not eliminated (EE Times has less than half the page count it did from five years ago). My concerns or at least puzzlement come from two paragraphs near the end.

Topical coverage in areas such as communications, consumer electronics and industry developments in China and Japan will be augmented by freelance contributions as we also thank Richard Goering, Yoshiko Hara, Mike Clendenin, Paul O’Shea and Alex Mendelsohn for their years of service to this newspaper and TechOnline.

EDA coverage will now be the purview of the entire editorial team, with increasing focus on contributed articles. EDA application coverage is already a staple of TechOnline DesignLines,, and

I don’t quite understand why Richard Goering wasn’t able to change orientation to online media, I have been reading his words on-line for a while now and he’s one of the better bloggers that EET has.  If EDA is everyone’s responsibility, it will be no one’s responsibility. Doubtless Goering will take a job somewhere else that involves publishing on-line, so there must be more to the story.

What are some near term strategies that startups should consider now that Goering won’t be profiling all of the little guys?

  1. If you don’t have a blog on your website, you should add one now and post at least weekly. Take time to follow some of the emerging EDA oriented bloggers as they may very well become an important source of context on your firm.
  2. Consider smaller regional conferences like Mentor’s EDA Tech Forum as a more important source of leads. MP Associates should consider adding magazines/print to their conference line-up (DAC, ICCAD, DVCon, …) to pick up the slack in coverage. EDA Tech Forum also publishes a quarterly journal.
  3. The size of your website is measured by the number of inbound links from other quality sites. Become more active in EDA oriented on-line forums (e.g. Verification Guild, SOC Central, EDA Cafe, CADWire, Deep Chip, and Linux Electrons, all come to mind).

This shift to on-line and events is not unique to CMP: Pat McGovern, president of IDG, the parent of recently shuttered InfoWorld had the following observation in an interview in March of 2007 with Mediashift‘s Mark Glaser

McGovern: We’ve made an interesting re-definition about what business we’re in. We always thought of ourselves as [print] publishers who did websites and conferences. Now the website typically has a bigger audience than print, and it’s growing much more rapidly. We used to be a publishing company with ancillary websites and events, but now we’re a web-centric information company, and we have ancillary activities like print publications and events.

Founder’s Story: An EDA Acquisition During the DotCom Boom

Written by Francis Adanza. Posted in Founder Story, skmurphy

This is another joint project we did with Ann Marcus because she is such an  effective interviewer. Last month she sat down with Mike Bitzko, currently CEO of CadPlex, to get his founder’s point of view of getting acquired (when he was CEO of Concurrent CAE Systems) at the peak of the dotcom boom and having to make  the merger work during the bust. Mike has some specific suggestions any startup contemplating an acquisition offer.

This is the second in an ongoing series of “lessons learned” stories from founders: if you founded or were an early employee of a software startup and would like to contribute your story, please use the contact form or give me a call and we can arrange an interview.

Interview with a CTO of a acquired small company. 6-19-07

Ann Marcus (AM): Acquisition is becoming a useful strategy for many organizations. What did you see as the benefits of acquisition for your organization?

Mike Bitzko (MB): Capitalization. Concurrent CAE Systems was acquired by ChipData as a dot com in 2000, in the first quarter after the peak. Everything is timing. We had to get capitalization because of the speed that the market was going. We either had to go after funding directly or be acquired by a company that already had funding.

AM: What were the benefits to the organization that acquired your company?

MB: ChipData was getting leading technology that they didn’t have, coming to them “packaged and ready to go.” But the problem turned out to be that they really didn’t know what to do with it.

AM: What aspects of the process did you not anticipate or plan for? And what advice would you give others avoid the challenges you encountered–words of wisdom, tips, gotchas?

MB: In any business situation, there are times to have lawyers involved and to not have them involved. In an acquisition situation, you MUST have good, sound legal advice protecting your interests. You are playing with experts who know how to manipulate everything. If you make the mistake of not having legal advise, you’re doomed.

I’ve never been fond of attorneys, but there are times you have to have them representing your interest. Otherwise you can get into a mess. I did get a lawyer but not with sufficient experience and the advise he gave me was weak. You should expect to pay an attorney who really knows acquisitions anywhere from $5,000 to $20,000 to get the kind of advice you’ll need. You must do this. Look, you pay now or you pay later.

Secondly, do your due diligence on the people behind the scenes of the acquiring company. If I’d done a better job at it I would have realized that there was a problem. Companies are built on different principles and foundations. Different levels of integrity—It’s like the Raiders Football Team, whose philosophy is “Live by sword, die by sword” that spends more time with attorneys than running their business. If I’d really done my due diligence, I would have realized that I shouldn’t have done business with these guys. I shouldn’t have believed in Sevin-Rosen and the fluff about that.

AM: Okay, so what went well?

MB: Very little . As soon as my name was on the dotted line, it was downhill from there. They got the acquisition. As soon as I was on the hook, it was a totally different story than the original one.

My advice to those considering an acquisition…First, do your Due Diligence! Validate the integrity of the people you’re doing business with.

Everything went well up until point I put my name on the dotted line. I was foolish that I didn’t have a stronger attorney. I’d be much more shrewd next time. There was writing on the wall, but I was in too much of a rush to unload the company once I saw the indicators that the dot com era had peaked.

AM: Can you cite a particular indicator?

MB: I knew there was a problem when my plumber, who was putting new pipes in my house began advising me on my stock portfolio, telling him how much he was making. That was a key indicator. It was clearly too late in the market, too over-bought and time to get out. But as a result I made some bad decisions.

AM: What other advise would you give those considering acquisition?

MB: Have A Term Sheet in Hand Before You Even Meet. The term sheet has to be complete and have their names on it [as well as your]. Then you have this to refer back to. Otherwise it’s just He said, She said.

Look. It was an assembly of bad timing and…well…not-too-good people…converging in what turned out to be a disaster. The dot com went down hill and those guys didn’t know how to run a software company.

ChipData, the company that acquired Concurrent CAE Systems, claimed to have expert-level management and exceptional funding. They had first round funding of $11 million and subsequent funding brought them up to $33 million. This was an easy trap.

ChipData essentially took the VC’s $33 Million and and my company and flushed them down the drain. You must look at the management of the acquiring organization and find out what kind of business they really do and what they’re capable of. I realized too late in the game that these boys had no business running this business. Because they ran it into the ground.

AM: Had you intended to stay involved after the acquisition?

MB: I had intended to stay involved, and that was what we’d all discussed, but it was obvious that as soon as I signed, things were going to be different. These guys were from Texas and knew everything, so somehow my involvement just wasn’t required once the paperwork had been signed. That why you need to have everything in writing.

AM: What are some of the significant challenges / opportunities that still remain?

MB: I learned a lot from the experience. A good attorney would have told me to figure “insurance money” into the terms along with the potentials. That means that $400, maybe $500…half a million… goes directly into your pocket even if everything fails. That way you walk away okay and you don’t find yourself back on the street having to start a new company immediately.

AM: Is that what happened to you then?

MB: Yes. The new company is CadPlex. It’s a privately held company funded by company founders that provides solutions to bottlenecks within existing EDA Design flows located in the Silicon Valley area and North Wales, PA.

AM: Would you be involved in an acquisition situation again?

MB: You bet I would! I’d be a target for acquisition, but I’d be a much smarter target the next time.

In fact, a fellow wanted to talk about the possibility of an acquisition of the new company. He was coming from the airport, driving over here, when I realized that I didn’t have a term sheet or any names on paper. So I called him and I said, don’t come over…term sheet on desk with the names on it. He said he would send it afterward. I said, no. If you don’t have the term sheet you might as well just turn the car around and go home. And he did. I never heard anything else from him. It was pretty clear that his intention was to get at proprietary information.

So, have a term sheet in your hands before talking to anyone about an acquisition. You don’t know what they’re really interested in. Get it in writing.

AM: Thanks!

Can you recommend an accountant?

Written by Theresa Shafer. Posted in 1 Idea Stage, Startup CEO: Question of the Day, Startups

You can’t go wrong with Ogden Lilly at Boitano Sargent and Lilly. Odgen has done my taxes on the business side for more than a dozen years and helped on the personal side for some complicated returns. I have referred a number of folks to him over the years and always had good results, even when they were facing serious issues in an audit due to prior mistakes or poor practice.


Finding Partners

Written by Theresa Shafer. Posted in Startups

The best way to find partners is your inner circle, the people who you have a shared success with. Starting a company is like a marriage, you really want to know and trust your partner.

Another place to look is a web site where you can post a job description for a programmer. They have a “will work for equity” section as well as a volunteer section.

Another place you could post a ad for programmer is or Results from these sites as well as overseas are mixed. You need to manage them and I would not look for partners there.

Nuts, Bolts and Jolts by Richard Moran

Written by Sean Murphy. Posted in Books, Quotes, skmurphy

Between 1993 and 1998 Richard A. Moran authored four books of business advice–similar in tone and size to H. Jackson Brown’s 1991 “Life’s Little Instruction Book“–that were collections between three and four hundred bullet points of pithy advice:

  1. Never Confuse A Memo with Reality (1993)
  2. Beware Those Who Ask For Feedback (1994)
  3. Cancel the Meeting, Keep the Doughnuts (1995)
  4. Fear No Yellow Stickies (1998)

Moran has put all four books in a blender and created a synthesis with “Nuts, Bolts,and Jolts: Fundamental Business Lessons You Must Know,” retaining most of the bullets from all four books but organizing them into chapters with a couple of pages of expository perspective to frame and counterpoint their epigrammatic style.

What follows is my selection of his seven best observations for entrepreneurs.

“Easy projects, easy sales, or hot new business opportunities
are like children’s soccer; everyone clusters around the ball.”

As a startup you are better served to be far from the crowd at least initially so that you can learn in (and own a niche) of your own.

“Learn the difference between running a meeting and leading a group.”

Lead (and sell) with your ears. Focus on objectives and results, not methods and facilitation. Even when it’s your initiative, if you are the leader you are better served to have someone else present it (after appropriate shared rehearsal) so that you can better gauge reactions and be more alert to feedback.

“Ask for input only if you plan to do something with it or about it.”

This is especially true in customer service and product marketing roles (and any management role). Don’t raise expectations that you will take action on the information you ask for if you have no plans (or ability or resources) to follow through.

“Being good is important. Being trusted is essential.”

Trust is essential to any early relationship that a startup forms. It can be especially tempting with prospects (and even customers) to violate their expectations and unilaterally amend an agreement (e.g. when features are going to be ready or a particular bug will be fixed) to give them something “better.” The challenge, as Gerald Weinberg observed in “Secrets of Consulting” is that “People don’t tell you when they stop trusting you.”

“When told you don’t understand the big picture, ask to see that big picture.”

I think the opposite is even more true: don’t tell someone that they don’t understand the Big Picture, offer them a rich enough context for your advice or direction so that they gain a better appreciation for your perspective. Bob Lewis offers a similar prescription in his 3/11/2002 Tip (registration required) on “Context: make sure you provide lots of information about it. Whether an employee is writing a program, designing a network, or deciding whether a course of action is worthwhile, it’s the context that determines the answer. So don’t let employees just ‘do their job.’ Their job, after all, ought to be doing what makes the most sense, which means that they need to understand how it fits into the bigger picture.”

“Technology eventually evens out. Compete on service and talented people.”

A technology advantage can allow you to seize a niche, but for staying power you need excellent service and a commitment to hiring folks with the appropriate talents and helping them to continue to develop them.

“Great ideas and solutions to problems often occur right before you fall asleep at night. Get up and write them down or they will be lost in the morning.”

This is excellent advice. I carry 3×5 cards during the day and keep a pen and pad of paper on my nightstand. More than once it’s happened that I have been wrestling with challenging project or problem and either awakened in the middle of the night or a few minutes before the morning alarm went off with a solution clear in my mind. It’s amazing how fast an insight or solution can dissipate if you don’t get at least a fragment of it written down.

Moran has some great advice for startup CEO’s on how to prepare for and run effective board meetings in an April 16, 2007 article “Elephants in the Boardroom” on

Anthony Scampavia Bio

Written by Theresa Shafer. Posted in Team, tshafer

Anthony has been with SKMurphy since 2007, he provides consulting around a lightweight product development model that is appropriate for startups, In addition he focuses on reviewing and defining product release and test strategies as well as developing test and development sandbox environments for automated regressions and system level testing. Prior to SKMurphy, Anthony was a Director at Cisco Systems. He managed the growth from 1 test engineer to a division of 280 employees in multiple sites, and 20,000 sq ft of test labs. Anthony holds a BA in Computer Science from University of California at San Diego.

Anthony Scampavia Linkedin profile

Additional Resources

Editorial Coverage: The Times They Are A-changing

Written by Francis Adanza. Posted in EDA, Events

Which resource do you prefer to obtain information; print or on-line? This morning I attended an interactive DAC debate that touched on the issues on the shift from print media to on-line publishing. Below is my summary of the topics and discussions of the presentation titled Editorial Coverage: The Times They Are A-changing.

Moderator: Scott Sandler, President and CEO, Novas


Furrier’s Introduction:
I started Podtech with a microphone and an iRiver. All I did was go around attending events and interviewing entrepreneurs. I then hosted the interviews on blogs, podcasts, and websites. At first it was more of a hobby but as traction developed, I turned it into a company. I believe print is going away and that people will look on-line for sources of information. Print will not completely go away, because there is something to be said about the touch, feel, and mobility of a book. However, for on-demand, up to date, real time information we can’t wait for print anymore.

More and more communities are formed on the Internet that print does not allow you to create. People want to be able to comment and share insight with others. Information on-line gives people an identity, a personality, and expression.

Moderator (Sandler): Since we have all been around long enough, can you touch on the history of the transition from print to on-line?

Santorini: It is becoming more and more difficult to figure out what my customer wants. I can’t tell what form they want their information in.

Sandler: Show of hands how many people read print?
Crowd: About half the people raised their hands.

Sandler: Show of hands how many people prefer to get their information on-line?
Crowd: About 2/3 of the people raised their hands.

Sandler: I noticed that some people raised their hands twice. With this small sample, I infer that people still read print, but prefer to get their information on-line.

Fuller: People want information now and on-demand. Print can’t keep up with providing the newest content. Also, anything that has a shelf life is great for on-line because it is easy to archive and retrieve later. Unlike print, on-line usage can be measured in many ways. We can determine how long the user is viewing the page, which pages the user is viewing, the ability to link between other resources, etc.

Markowitz: On-line allows users to develop communities and relationships. Unlike print which is almost impossible to comment on a writers topic, feedback is instant on-line. Users will tell you exactly how they feel and if you do not do your homework, they will call you out on it if you are wrong.

My take: even though electrical engineers have been early adopters of the web for job related information, it’s not clear that the cubicle environment most of us work in is conducive to audio and video consumption. Also, for work related information, it’s not clear that audio or video content has been developed that’s more useful than text (whether phosphor or ink). While streaming media is useful for establishing an emotional connection, it’s much slower for the average engineer to listen to an interview than read a white paper or a data sheet. Leveraging animation and simulation for interactive datasheets may prove more useful, especially if you could download ready to go models–e.g. for schematic, PCB, simulation, power, thermal, and mechanical info to name a few views that currently require manual transcription from PDF.

DAC Panel Presentation: EDA Exit Strategies: What’s Next?

Written by Francis Adanza. Posted in EDA, Events

This morning I attended a panel discussion on EDA Exit Strategies: What’s Next? This presentation was given at DAC on the Pavilion Show Floor. It was a one hour interactive discussion between the panelists and the audience. Below is my take on the two most interesting discussions.

Kathryn KranenJasper Design Automation, Inc., Mountain View, CA

Rajeev MadhavanMagma Design Automation, Inc., Santa Clara, CA
Andrew YangApache Design Solutions, Inc., Mountain View, CA
Jay Vleeschhouwer – Merrill Lynch & Co., Inc., New York, NY

Moderator Question: What are the exit strategies for startups in EDA?

: Don’t think about the exit. Worry about building a sustainable, viable business. Worry about satisfying customer needs. In terms of exists, I predict that there will be less and less IPO’s. There will continue to be M&A’s, but I think most successful companies will look like Denali, a privately held corporation.

Yang: There has not been a IPO in six years. The last was Magma in 2001. I agree with Rajeev that most exits will be M&A and privately held companies that share liquidity and pay dividends. I still believe there is a vibrant ecosystem in EDA which is driven by the innovation from startups. In terms of exists, essentially you only have four options.

  1. You fail
  2. You build a successful privately held business
  3. You are acquired (M&A)
  4. You go public (IPO)

Vleeschhouwer: Do not focus on an exit. An exit is not a right but only a privilege. Since Rajeev and Andrew did such a great job of covering the importance of building a business first, I will talk about the trade offs of being a public company. Public companies are ruled by the thumb of stockholders, meeting quarterly goals, and different management structure.

Public companies have different customer penetration objectives, product portfolios, profitability requirements, and market goals. IPO is simply a financing strategy, it is not a means to cash out. Only if it is strategic to the business objectives, does a company go public.

Compared to other tech markets, it is very difficult for investors to understand the EDA market. Most likely investors will take another company public. In addition, there are not enough users in the EDA market, thus growth limitations to support an IPO strategy.

Audience Question: How do you know when a company is ready for an M&A? Is a company ever too big or too small?

Group Discussion:
From the company’s perspective, its not whether the company is too big or too small for M&A. The important issues include; how are you going to manage the post M&A and how do you manage the R&D and embed the technology into the companies line of business? Many company M&A’s do not succeed. Developers leave, over development, not enough development, off strategy, and slow customer acquisition. It is all about the execution of the merger.

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