Here in San Francisco it’s a bit depressing to hear people say that the old magic mix of Silicon Valley, the mix of money, technology and entrepreneurs, is losing its potency.
“When I talk to VCs they say they keep looking for companies to back and they’d like to do it but they can’t find opportunities which justify investing tens of millions of dollars to develop new products”, Moshe Gavrielow, CEO of Xilinx, told the Globalpress Summit Conference this week, “there are very few areas where you can afford to spend $50m to develop an ASSP.”
“There’s a tremendous decline in semiconductor start-ups. Not many make it to IPO”, agreed Ronnie Vashista, CEO of eASIC, “the exit strategies for investors aren’t as attractive any more. Up-front costs of $40m to $50m are hard to substantiate.”
However not everyone I met in San Francisco is bemoaning the times. I asked an executive at Synplicity, just bought by Synopsys, how he saw the takeover.
“As a liquidity event”, the exec replied in a quaint American phrase which I took to mean that substantial amounts of wonga were being poured all over him.
What Silicon Valley needs, it seems, is more liquidity events.
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