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Top 10 Privates Updated

There is no doubt that many startup “survivors” have made serious progress in the past 12 months, and they are positioned for great things in 2005. Startup life is back – if only for an elite few.

What's changed? Capital spending is up; larger companies are increasingly looking to startups to plug holes in their portfolios; and, most importantly, some key startups have proven that you still need new technology being developed by entrepreneurs in order to succeed.

This became evident in the research for Light Reading's new Top Ten Private Companies for 2005. Our last revision, in May 2004, represented a full house cleaning (see Light Reading's Top Ten Private Companies). At the time, it was clear that many startups had become deadwood on the list, victims of the bubble and the unsustainable business plans it created .

At the same time, the brutal adjustment period of 2001-2004 bred another sort of company: a survivor that could cut back its burn rate, develop successful technology, and land just enough customers to get to the next funding round.

Here in 2005, the industry has stabilized considerably, and many of the survivors have actually become of interest again – especially to larger potential acquirers who may have missed an emerging product category or are looking for a good place to expand sales. Case in point: P-Cube, which was acquired in 2004 by Cisco for a healthy $200 million (see Cisco Plucks P-Cube for $200M and P-Cube).

Battle-hardened and street smart, this new generation of startup has only one goal in mind: Find enough customers to become self-sufficient...

For all the gripping details, please go here.

— The Staff, Light Reading

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