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Force10 Orders One More Round

Craig Matsumoto
8/25/2006
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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.

— Craig Matsumoto, Senior Editor, Light Reading

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strungup
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strungup,
User Rank: Light Beer
12/5/2012 | 3:43:20 AM
re: Force10 Orders One More Round
That's almost 374 million in funding. Rank-and-file can forget about any major payday.
chips_ahoy
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chips_ahoy,
User Rank: Light Beer
12/5/2012 | 3:43:19 AM
re: Force10 Orders One More Round
200 employees
burn $50M
rev is $100M
total cash used $150M

cash spent per employee $750k

how do you spend that much money?



lightsoul
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lightsoul,
User Rank: Light Beer
12/5/2012 | 3:43:17 AM
re: Force10 Orders One More Round
Their India center is a very shabby and sorry place. You are right that you won't get a whole lot of quality people in Chennai. They get people mostly from Future Software and HCL-Cisco.
routerbox
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routerbox,
User Rank: Light Beer
12/5/2012 | 3:43:17 AM
re: Force10 Orders One More Round
How is their India center doing? I heard its not in the Indian Silicon Valley, and is actually quite far from there.

Unlike most of the other router vendors who decided to open shop in Bangalore, Force10 for some reason (which i believe is more political) decided to open up their center in some other city .. am wondering as to how they'' get the pool of talented engineers in there ?!
market_watch
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market_watch,
User Rank: Light Beer
12/5/2012 | 3:43:14 AM
re: Force10 Orders One More Round
Chennai is new IT destination in India.
I'm sure you can find talented pool of people.
Force10 may surprise people soon with its IPO,strong product line is their strength.
Hanover_Fist
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Hanover_Fist,
User Rank: Light Beer
12/5/2012 | 3:43:13 AM
re: Force10 Orders One More Round
$455M total venture funding - here's the only question worth answering; how many shares outstanding (i.e., how much dilution) did it cost F10 to get their last few rounds of additional funding?

It likely cost the employees a lot - rumor has it that F10 BoD/Exec. Mgmt passed on a few "break even" buy-out propositions because of the 'we can see the (retirement) pot of gold at the end of the rainbow' syndrome.

Without knowing that number (# of shares outstanding), all discussions on pending IPO are useless.

The most important lesson of the late '90s;

"Pigs get fat, hogs get slaughtered"
startup_shutup
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startup_shutup,
User Rank: Light Beer
12/5/2012 | 3:43:13 AM
re: Force10 Orders One More Round
>> Rank-and-file can forget about any major payday.

That has been the case with majority of Silly Con Valley startups ... I wonder what kind of people decide to give their life away by working in shitty startups ....
startup_shutup
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startup_shutup,
User Rank: Light Beer
12/5/2012 | 3:43:13 AM
re: Force10 Orders One More Round
>> Chennai is new IT destination in India.

Chennai is good for finding COBOL programmers ... give me a break ....
optiplayer
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optiplayer,
User Rank: Light Beer
12/5/2012 | 3:43:12 AM
re: Force10 Orders One More Round
"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.
wunder_kid
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wunder_kid,
User Rank: Light Beer
12/5/2012 | 3:43:12 AM
re: Force10 Orders One More Round
Rip Wan Winkle
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