RMI's Long Strange Trip

3:00 PM -- RMI Corp. , the former Raza Microelectronics, has had the Raza taken out of it for some time -- not just in the name, but in the departure of founder Atiq Raza as CEO. Now, with RMI getting a $175 million acquisition offer from NetLogic Microsystems Inc. (Nasdaq: NETL), it seems a good moment to review RMI's bubble-era roots. (See NetLogic to Acquire RMI.)

Its heritage traces back to the stockpile of failed startups funded by Raza Foundries, Atiq Raza's attempt at rewriting the venture capital rules at a time when startups were getting acquired before they even produced a product. Raza told me he was crafting a way to make the acquisition cycle go even faster, in part by providing his own executives and engineers to fuel the startups.

Raza Foundries did have a quick success or two, but Raza's own connections seemed to play a bigger role than the actual technology did. In 2000, it sold an unknown switch fabric vendor, YuniNetworks, to Applied Micro Circuits Corp. (Nasdaq: AMCC) for 2.25 million shares of stock, then worth around $240 million. Raza had joined AMCC's board in 1999.

Raza Foundries hit a brick wall as the bubble ended, and by 2004, shards of the portfolio were glued together to form RMI -- although it took Raza a year to admit to Light Reading that the company even existed. (See Headcount: Tell It Like It Is, Give Me Liberty!, Raza Goes Micro, Raza's Triple-Threat Revealed, and Raza's Firm Slims Focus.)

(It seems RMI may have started earlier than we'd thought. On today's conference call with analysts, NetLogic officials described RMI as having been founded in 2001.)

Raza's been quieter lately. In early 2008, he paid a $3 million Securities and Exchange Commission (SEC) fine related to alleged insider trading in shares of OrthoClear Holdings Inc., a maker of teeth-aligning contraptions, which included Raza on its board. The settlement occurred with Raza neither admitting nor denying guilt.

Raza is now barred from being an officer or director of any public company until 2013. But he's going to be on NetLogic's technical advisory board once the RMI acquisition closes, taking the title of Chief Technical Advisor. Which confirms two things: He's still a part of RMI, and he's still got name value in the chip industry.

— Craig Matsumoto, West Coast Editor, Light Reading