Hyperchip Inc. has cut its staff to the bone, but a new development with its shareholders has the company hopeful it can raise more money and continue trying to land a significant service provider customer.

Rumors abound that the core routing startup was near closure, but sources close to the company have a different story that's not quite so grim. For the past eight months, they say, several Hyperchip shareholders were blocking the company from raising money. Details are sketchy, but the company appears to have worked a deal with those shareholders, lifted the funding ban, and may land some new financing in the coming months.

Hyperchip's financing hopes were hinted at earlier, when its new president and CFO, Dominic DeVeaux, put his blustery bio on the company's Website.

The bio, which described DeVeaux as a "feisty and focused management consultant" who "pops vitamin pills, networks by playing golf and eats sushi twice a week," said that he was almost done with his "mandate" at Hyperchip. "The board approved my plan, the shareholders are supporting me and now all I need is some good press about Hyperchip's impressive technology and world class engineering capabilities," the bio read as of late June. The wording has since changed.

[Ed. note: Whether this story qualifies as "good press" and has thus cleared the way for DeVeaux's mandate is up to you.]

The financing freeze did take its toll on Hyperchip, however. In June, CEO Brian Barry left, and it cut its staff in half, down to about 65 employees. Since then, the staff size has been reduced again to about 15 employees (not including some contractors), sources say (see Hyperchip Has a Hiccup and Headcount: Buy vs Lure).

Sources close to Hyperchip say the number left was determined while the company's fight for funding was happening -- it needed to keep just enough staff to continue responding to carrier interest (requests for proposals/quotes) and continue its investor due diligence. There is some chatter that when Hyperchip's next cash infusion comes in, several employees will be recalled from layoff.

There isn't any evidence that the company has put its intellectual property up for sale, sources say, except for a few licensing discussions it has had for use of its intellectual property in markets outside of core routing.

— Phil Harvey, News Editor, Light Reading