Six years might be long enough.
One of Orange County’s best-funded companies may have reached the end of its fund-raising phase.
Foothill Ranch-based Aristos Logic Corp. said late last month it landed yet another round of funding,its sixth since its first way back in 2000.
This time it’s for $15 million, pushing the company’s total raised to about $95 million.
That’s a hefty amount. And it just might be enough, said Adam Zagorski, director of marketing at Aristos.
“Our expectation is that should pretty much be the end, given that we have these (manufacturing) customers that are ready to kick into high gear pretty soon,” Zagorski said.
The company, which designs chips and circuit boards that allow computers on data storage networks to work with each other, doesn’t disclose revenue. Zagorski said sales to computer makers could make revenue growth in 2007 “very significant.”
A big reason for the growth: Aristos added software to circuit boards that came out in the summer. That reduces the amount of development time for customers, he said.
“We’re just really starting to roll,” he said.
So when does the exit plan commence?
“That’s not something I can an offer an answer on at the time,” he said.
Aristos’ latest round was led by a “new strategic investor,” the company said, with participation from existing investors Panorama Capital (formerly JP Morgan Partners LLC of New York), Menlo Park-based TPG Ventures Inc., Redwood Shores-based Woodside Fund and Saratoga-based QTV Capital.
Microsemi Misstep
How the tide has turned.
Just a few months ago, analysts and investors were standing by Irvine-based Microsemi Corp. as the conservative player in a choppy chip market.
Microsemi makes chips for a lot of markets, such as power satellites, military aircraft, medical equipment and flat-screen TVs, among other things.
It didn’t hurt either that Microsemi delivered 14 straight quarters of sequential revenue and earnings growth,while also meeting or exceeding its guidance.
Then on Sept. 21 the company warned that the quarter through September didn’t look so good.
Microsemi said investors should brace themselves for adjusted earnings that could decline by as much as 4% vs. a year earlier. Revenue is expected to be up 2% at best and flat at worst.
Those new numbers badly missed earlier expectations.
The company blamed overall market weakness. The stock fell about 12% the following trading day.
Even before the warning, a couple of analysts sensed trouble and downgraded the stock hours earlier.
One was Andrew Huang, an analyst with American Technology Research Inc. in San Francisco.
He saw a bit of the writing on the wall with other chipmakers warning and apparent weakness in four of Microsemi’s six end markets.
Another concern: Microsemi had padded margins the past three years by raising prices on military customers. But that pricing power could peter out after next year.
“Given Microsemi’s impressive track record of meeting or beating its guidance, we believe any kind of a miss could put significant pressure on the stock,” Huang wrote.
He was right.
SiliconSystems, Samsung
A startup with a couple of funding rounds under its belt just got another,and from a big name.
Samsung Corp. handed Aliso Viejo-based SiliconSystems Inc. its biggest wad of cash yet, the company said last month, though it wouldn’t give specifics.
SiliconSystems uses flash memory to make heavy duty storage devices for industrial uses.
Samsung is a supplier of memory chips to SiliconSystems and apparently liked what it saw in the startup, said Michael Hajeck, founder and chief executive of SiliconSystems.
The company also said SanDisk Corp., a maker of flash memory products, is an investor, a fact that had been kept hidden in the past.
SanDisk didn’t participate in the new round.
SiliconSystems wasn’t actively looking for more money. The round of funding it landed in June 2005 was supposed to have kept the company going for three years.
But Hajeck said getting a big-time backer like Samsung was too tempting to pass up.
“It effectively allows us to accelerate many of the things we were already doing,” he said.
That includes a faster expansion across Europe with more offices in places such as Germany and Scandinavia.
Also, he said just having the name Samsung,along with now being able to use SanDisk’s name,gives the company more credibility with potential clients.
SiliconSystems has about 80 employees and should have more than 100 within a year, according to Hajeck.
“Triple-digit sales growth” again this year is fueling demand for more hires, he said.
The company’s product looks like a 2.5-inch disk drive. Instead of the platters and heads found in disk drives, SiliconSystems’ devices are full of memory chips.
Like disk drives, they have a controller,a circuit board with chips,for connecting the device to a computer.
Conference Coming
The American Electronics Association is holding a national conference in Orange County targeting midsize companies.
The American Electronics Association Technology Capital Conference is focusing on privately held companies with yearly sales of $5 million to $75 million at the show on Oct. 11 and 12.
In other words, this conference won’t just be going after the startups out there. It’s looking to help a solid technology company that may be looking for some king of equity funding or debt event.
The event will be held in Dana Point at the Laguna Cliffs Marriott Resort & Spa.
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