x
Optical/IP

Hyperchip Trims, Hunts for Funds

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

Page 1 / 3   >   >>
reoptic 12/5/2012 | 1:28:00 AM
re: Hyperchip Trims, Hunts for Funds With 15 folks they cannot even sustain the thing let alone develop anything new. This company is in the no mans land of trying to find a buyer for its IP...the barely walking dead...
Milano 12/5/2012 | 1:27:59 AM
re: Hyperchip Trims, Hunts for Funds Enough damage has been done to Hyperchip's reputation by now to scare anyone from even considering to put resources to test their products.

The rumors about funding are pretty typical of the approaching disaster. I'm sure one hour before the end there will still be noise about progress toward a funding arrangement.

At this stage the Qc gov't will be heavily criticized if they invest more in the company. Without it, a significant funding is unlikely.

...M
dodo 12/5/2012 | 1:27:58 AM
re: Hyperchip Trims, Hunts for Funds Milano

With the "scrutinizing" that the quebec govt did last year via the Minister Audet, I don't believe that the venture teams of the "quebec Inc" will put more money into it. These stupid (non-techy) VCs got burnt and with education and health being on top of the govt PROMISES, they will think twice.

Anyway, there have been so much musical chair playing and "early" retirement going on since last year that there are no more Telecomm and/or IT friends in "Quebec inc" to bail these companies.

The only solution will be the sale of the IP

JMHO
Belzebutt 12/5/2012 | 1:27:57 AM
re: Hyperchip Trims, Hunts for Funds What kind of carrier would be stupid enough to buy a core router from a company that has 15 employees?
Milano 12/5/2012 | 1:27:55 AM
re: Hyperchip Trims, Hunts for Funds "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."

Really means:

"Shareholders rejected offers that would have meant near-complete dilution."
---
"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."

Really means:

" At this stage however, these shareholders may have no other alternative if they want anything out of the deal."

---

"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."

Really means

"Part of DeVeaux's strategy is to get maximum exposure for himself to open the way for future mandates."
---------
"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 )."

Really means:

"Lack of financing options forced the company to reduce its burn-rate to its absolute vital minimum, hoping for a miracle".

--------

"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.

Really means:

"Obviously no one is losing time doing RFQ response. Few people will be recalled in the unlikely possibility of a last minute investor."

-----
"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."

Really means:

"Patents can easily be worked around, especially those of a company that can't afford a lawyer."


grow_up 12/5/2012 | 1:27:42 AM
re: Hyperchip Trims, Hunts for Funds AT THIS POINT IQ WILL WILL BE HEAVILY CRITICIZED IF THEY DON'T. THEY ARE THERE TO BRING JOBS AND MONEY TO QUEBEC, THEY WON'T GIVE UP NOW.
Milano 12/5/2012 | 1:27:41 AM
re: Hyperchip Trims, Hunts for Funds Thanks, Dominic.

...M
grow_up 12/5/2012 | 1:27:41 AM
re: Hyperchip Trims, Hunts for Funds BITTER MUCH? I DON'T ACTUALLY HAVE TIME TO GO OVER EACH DETAIL THE WAY YOU DID....RECCENTLY LAID OFF? BUT I CAN TELL YOU ONE THING YOU KNOW NOTHING ABOUT AND THAT'S DOMINIC DEVEAUX'S 'MANDATES' HE HAS A VERY SUCCESFUL CONSULTING FIRM OUTSIDE THIS MANDATE, AND DOES NOT NEED TO GAIN 'EXPOSURE'
dodo 12/5/2012 | 1:27:40 AM
re: Hyperchip Trims, Hunts for Funds "AT THIS POINT IQ WILL WILL BE HEAVILY CRITICIZED IF THEY DON'T. THEY ARE THERE TO BRING JOBS AND MONEY TO QUEBEC, THEY WON'T GIVE UP NOW."

Wait a sec.
Do you think that Jean Houde will allow another loan (just for political reasons and pressure) without evaluating the risks and perhaps endure the wrath of the Quebec auditor general next spring?IQ may offer only complementary funding after Hyperchip has succeeded to raise financing from the private sector.

Do you know what is the ROR for every $1M of financing in 2003-2004 for IQ:creation of 7 jobs only.

As far as Technocap (major VC and guess who are its majors partners) is concerned , it has fiduciary responsibility to its shareholders.

And do you think that Rousseau from the CDP would want to have mud on his face ( using the pension fund on a losing horse) after the laisser-faire of his predecessor ?

Come on, the turnaround exercise may just be to salvage whatever they could without burning the existing/remaining capital ( if any - i don't know the burn rate). I don't believe that Hyperchip can diversify by leveraging its core technology .
Let's be realistic and not emotional.

Anyway there is no election in the horizon, hence no electoral promises!!!!!!!!!!!!:-)

JMHO and 2 cents as a tax payer who is still in the business
Pierre 12/5/2012 | 1:25:33 AM
re: Hyperchip Trims, Hunts for Funds All,

When a company starts selling off their foosball table, cappucino machine, and furniture, how far off can the end be? Is the asset fire-sale the "end of mandate" that M. DeVeaux has been bragging about? I guess he will soon have more time to play golf, pop vitamins and eat sushi...

To real estate speculators, the prime location where HPC currently sits wil be available in the imminent future, as they will relocate the skeleton operation St-Laurent...who knows, if they'd stayed in the Peel bunker and not bulked up so feverishly, where they might have been today.

P.
Page 1 / 3   >   >>
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE