Cyras Cuts VCs Out of the Loop

Cyras Systems Inc. announced today that it will receive $150 million from a private placement of convertible subordinated notes to qualified investors (see Cyras Sells $150M Worth of Notes).

The conversion rate for the notes will be based on the performance of Cyras's IPO. Sources close to the company say that it is planning to file for an initial public offering in October.

Cyras’s financing technique is unusual today but is set to become more common, observers say, as startups staffed by experienced entrepreneurs dispense with VCs' connections, experience, and money in favor of cutting their own deals. “The VCs are the losers, but you need a first-class [management] team to pull this move off,” says a partner at a venture capital firm, who spoke anonymously.

— Stephen Saunders, US Editor, Light Reading, (Light Reading)

Be the first to post a comment regarding this story.
Sign In