Sources says Force10 Networks Inc. 's latest funding round consists of $50 million in two tranches -- the first, already completed, for $35 million and the second, to be completed late September, for another $15 million. Separately, another source notes Force10 was out raising $35 million sometime in June.
The round sets Force10's post-funding valuation at $455 million, according to one source; other sources familiar with the company say that figure sounds about right.
With revenues likely to exceed $100 million this year, Force10 was all set for a 2006 IPO. It had even picked bankers including, reportedly, Morgan Stanley . But sources say the bugaboo of Sarbanes-Oxley compliance stalled the IPO's progress and, according to one, led Force10's CFO to depart earlier this year. (See Force10 IPO Still Hanging and Force10 Names CFO.)
Having raised at least $300 million in funding, and with revenues doubling each year, Force10 appears unlikely as an acquisition target. Officials have confirmed that an IPO is still in the plans -- although they won't discuss reasons for the delay.
With more than 200 employees, Force10 certainly is burning through cash -- but at a decelerated rate, thanks to hiring in India. The company's monthly burn rate is down to $4 million, according to one source.
Force10 officials did not immediately return calls for comment.
> If you look at the IETF docs coming from India > and there is a site that gives you all the > statistics, then almost all of them have been > authored from Bangalore and none from Chennai.
Well all the indian companies that i have indirectly worked with (which includes quite a bit) were all headquartered in Bangalore.
Atleast the Data Comm guys are mostly from Bang. I was in group that was selecting a base for a US startup in India and we had factored the better infrastructure, low cost, metro, political interference, etc. in favor of Chennai, but what it lost on to was the bad climate and the lack of experienced pool (which it can cover up in some time given that a couple of data comm companies have opened up there).
For a company that wants less turnaround time destination Bangalore is the place to be. It also helps convince the VCs there if you suggest your India plan with a little bit of Bangalore thrown here and there!
I have in my past life interacted with some data comm guys from Bangalore and they were really sharp and i was impressed. If you look at the IETF docs coming from India and there is a site that gives you all the statistics, then almost all of them have been authored from Bangalore and none from Chennai. Not that IETF docs give you a very reliable data, but it certainly gives you the trend and trust me, companies do look into all these things.
pros: - very diversified in industry compared to bangalore. automobiles, plastics, auto parts, refineries, large hospitals, pharma... - huge new Mahindra tech park has anchor tenants like Nokia factory who are pulling in suppliers, INFY to setup 25K seats there - Tidel IT park is doing ok with TCS anchor - way better traffic situation than B'lore - light urban rail is already there and will be expanded - much better airport (and road to airport :-) than B'lore - Lot of good univs and colleges including guindy engg college, Anna univ, IIT-M - cheaper housing compared to blore - lot of Tamils in IT industry - Govt is industry friendly, not a family run fiefdom as in Blore
Cons: - harsh climate - water situation is people buy drinking water in 20 liter bottles : home delivery - salty tap water - not so 'cosmopolitan' and 'free' as blore though thats changing
Give it 3 more yrs...btw Extreme networks is also in chennai.
green gives us some off-color: sorry folks but most successful startup have a successful exit in the 2-3 yr time frame unless the startup is profitable (like google) in which case they can take their time. after 4 yrs it is just a stale company and they missed their windows of opportunity.
In this market, startups have to do it the old school hard way.... build a real company, get profitable, show growth, assume you have to go IPO since the M&A market is so slow. If you don't take that path, you end up selling for the liquidation preferences and nobody makes a dime. There are so many startups out there that didn't execute properly that the acquiring companies can be patient and bottom fish.
sorry folks but most successful startup have a successful exit in the 2-3 yr time frame unless the startup is profitable (like google) in which case they can take their time. after 4 yrs it is just a stale company and they missed their windows of opportunity..
reverse splits are also used to manage the optics of the ipo cover price so it may have nothing to do with confidence of the business plan. Old rule of thumb is to price new stock issues between $10-20 per share - ever wonder why so may start here - its by design. Often the bankers will calculate the expected market value of the offering and then solve for cover price by adjusting shares outstanding. So in situations where you've raised alot of money over a period of time you may end up with a ton of shares outstanding. For example let's say you have 500 million shares outstanding (not uncommon in recaps ) and bankers think the company is worth $500m - there is no way they will price IPO shares at $1.00. They will reverse pslit it 10:1 and price at $10.00/share.
Management hates this because then you have to explain to employees why they have less shares than they used to. Even though it has zero impact on the % of the company that they own.
Yes, sorry. You're correct - income(s), growth, and expesnes - typical balance sheet info critical for IPO.
Dilution comes into play when working to plan the offering in terms of placing shares with Pre-IPO customers in order to meet the subscription offering prior to the public launch.
A reverse split could indicate a lack in confidence of the the business plan used to generate the investment $$$ which created the additional shares in the first place.
A split ain't gonna happen, no way!
The doomsday scenario - the stock tanks upon opening day and never ever recovers.
Is there enough room in the market for 10 Gigabit Ethernet only player as compared to the other 'all round' networking vendors?
"Without knowing that number (# of shares outstanding), all discussions on pending IPO are useless."
Not sure I understand the comment. In my view, the # of shares OS is irrelevant in the IPO discussion as they can be adjusted via split or reverse split.
What matters is revenue, operating income, net income, growth, and, perhaps most importantly, the receptivity of the market. Clearly, now is not a good time to try an IPO. It remains to be seen if things will be better in 6 or 12 months.
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