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Ironbridge 'Sold for Parts'

Light Reading
News Analysis
Light Reading
2/19/2001
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The remains of IronBridge Networks Inc. could be sold to the highest bidder.

Former employees of the company, which recently closed its doors and laid off employees in what seems a last-ditch effort to save the business (see IronBridge Has Fallen Down), say that two companies are bidding for the company's intellectual property. That includes a portfolio of about 34 patents and a "very good switching and routing software stack."

"When the story broke that we were in trouble, people started coming around. About one or two companies who'd been direct competitors have bid on the assets," said one ex-employee, who asked not to be named. "The software could save a startup a significant amount of time and money." Ironbridge could not be reached for comment on the alleged bidding.

Experts say there's no way to tell how much the assets could fetch. "There is no answer to the question of how to price intellectual property," says Judith Mayer O'Brien, attorney with the firm of Wilson Sonsini Goodrich & Rossati.

O'Brien, who specializes in helping technology companies with corporate issues and has worked with Avanex Corp. (Nasdaq: AVNX), Brightlink Networks Inc., and Juniper Networks Inc. (Nasdaq: JNPR), says there's no norm. "It depends on the value of the patents, who's willing to bid on them. In some cases, the value of a company's intellectual property after bankruptcy goes down to very little. In others, four or five companies bid and raise the price. There's just no answer to this question."

Meantime, Ironbridge's other assets have been less tough to value. As the laid-off workers exited the Ironbridge offices, a recruiter from Équipe Communications Corp. was waiting in the parking lot with a banner, in hopes of gaining some new blood (see IronBridge's Loss is Équipe's Gain).

Equipe wasn't alone. Turin Networks Inc., a startup developing an optical edge product, says it had hired a key senior software engineer (name withheld by Turin) from Ironbridge to head up the Turin Boston office some weeks before Ironbridge's troubles came to a head. In the weeks that followed, more engineers joined him as the hatch opened up at Ironbridge.

Turin won't say just how many folk it hired, but admits that it's now staffed its Boston office with Ironbridge refugees. And company spokespeople say they're proud that they didn't have to run over there with a banner. "Our approach was more passive," says a spokesman.

What's happened to the Ironbridge assets isn't unique. As market pressures put a host of other startups into deep waters (see Shutdowns Send Dark Message), it looks like a scenario that's going to get increasingly common.

-- Mary Jander, senior editor, Light Reading http://www.lightreading.com

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marsyang
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marsyang,
User Rank: Light Beer
12/4/2012 | 8:52:30 PM
re: Ironbridge 'Sold for Parts'
I think the market is shrinking down the booming tech companies. As a new grad, it is tough to think which way to go. Any advise?
opticalwatcher
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opticalwatcher,
User Rank: Light Beer
12/4/2012 | 8:52:29 PM
re: Ironbridge 'Sold for Parts'
yes, I can offer one piece of advice that you should take to your grave. "Stick to the fundamentals"!!!! With your feet firmly planted and a clear head, your course of action is always obvious as long as you stick to the fundamentals. Good luck.
BBBoa
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BBBoa,
User Rank: Light Beer
12/4/2012 | 8:52:26 PM
re: Ironbridge 'Sold for Parts'
As a veteran of 4 (mostly) successful start-ups over the past 10 years, you want to find a start-up that has a very strong cash position. Make sure the cash in the bank will be around for the next 18 months while the market weeds out the weak. Good luck.
netskeptic
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netskeptic,
User Rank: Light Beer
12/4/2012 | 8:52:24 PM
re: Ironbridge 'Sold for Parts'
> Is private funding from an established
> company good or bad?

In my own experience I found that it is way too easy for the management to fool/mislead unsuspecting investor/parent company.

So, it is a great thing if management knows real well what it is doing out there and it is an absolutely terrible thing in case of even minimal management problems, which multiply and multiply and multiply without being corrected.

There is a noticeable common dislike for VCs and I suppose that the part of the reason is that VCs (at least sometimes) do approriate policing which is definetely a part of their job description.

Thanks,

Netskeptic
realdeal
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realdeal,
User Rank: Light Beer
12/4/2012 | 8:52:24 PM
re: Ironbridge 'Sold for Parts'
Turin? Are there any stats on other start up companies who have tried to have a west coast and east coast campus running in parallel? I know the big guys try it all the time and manage to screw things up by creating separate cultures with separate identities.

I hope the ex Ironbridge folk took careful notes rearding how critical it is to have established communication channels at a start up.

I just don't see how this is possible when you are 3,000 miles apart and in a different time zone. The Ironbridge employee's had a hard enough time getting crucial company data when executives were just down the hall. What do you do when they are 3,000 miles away and don't know who you arebecause you are not located at company headquarters?

Ironbridge was partially funded by Newbridge (Alcatel) and some believe this led to Ironbridge's inability to raise money. TURIN IS 7% OWNED BY AMF (Is this the company who makes those cool sunfish boats I rent on vacation?)- Is private funding from an established company good or bad?

Just looking for comments on a start up being bi-coastal and receiving money from an established company...

And the reference to CERENT all over Turin's web site- PLEASE!!!! Give me a break!
tasmandr
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tasmandr,
User Rank: Light Beer
12/4/2012 | 8:52:22 PM
re: Ironbridge 'Sold for Parts'
Just a follow up to the message from BBboa and OpticalWatcher:

What do you think of companies such as Caspian Networks, Jasmine...
Just wondering if they will not follow the same path as IronBridge. BBboa, based on your experience, would it be a good option to joint Caspian Networks?

Thanks for any input.
Tasman
realdeal
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realdeal,
User Rank: Light Beer
12/4/2012 | 8:52:18 PM
re: Ironbridge 'Sold for Parts'
Did lightreading recently do an article on a start up who opened up shop in Texas?

Does anyone remember the name of the company?

Has it been a successful venture?

Please help...
terrarooter
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terrarooter,
User Rank: Light Beer
12/4/2012 | 8:52:18 PM
re: Ironbridge 'Sold for Parts'
Turin hired away a key software engineer who abandoned ship at the first sign of trouble. Weeks before trouble came to a head? And they are proud? Now that is loyalty.



Turin Networks Inc., a startup developing an optical edge product, says it had hired a key senior software engineer (name withheld by Turin) from Ironbridge to head up the Turin Boston office some weeks before Ironbridge's troubles came to a head.

And company spokespeople say they're proud that they didn't have to run over there with a banner. "Our approach was more passive," says a spokesman.
jsailor
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jsailor,
User Rank: Light Beer
12/4/2012 | 8:52:17 PM
re: Ironbridge 'Sold for Parts'
I have to agree. My ugly experience comes from a lazy VC and advisory board. Watching half of a company I built disappear and morale drop to levels I didn't know were possible is painful. Very painful given part of the bargain with the VC and presumably the advisory board was to police the children in management. Meeting after meeting , the children were sent back to their rooms for performing poorly and lying, but they were never held to the task and no changes were made.

IMHO, funding from any source should be evaluated carefully. Juniper has executed extremely well and their initial round was full of equipment manufacturers.


-----

In my own experience I found that it is way too easy for the management to fool/mislead unsuspecting investor/parent company.

So, it is a great thing if management knows real well what it is doing out there and it is an absolutely terrible thing in case of even minimal management problems, which multiply and multiply and multiply without being corrected.

There is a noticeable common dislike for VCs and I suppose that the part of the reason is that VCs (at least sometimes) do approriate policing which is definetely a part of their job description.
badtouch
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50%
badtouch,
User Rank: Light Beer
12/4/2012 | 8:52:16 PM
re: Ironbridge 'Sold for Parts'
I think that you are refering to Ennovate's
Texas development site...

I too was at a remote development site of a start-up..it wasn't fun..
Employees at the remote site were treated like mushrooms...plus, they are the last ones know how the company is doing and the first ones whacked if times turn tough..it's not easy to see the axe drop from a thousand miles away..
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