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Funding for startups

Seranoa's Slip Is Showing

So what's up at Seranoa Networks Inc.?

The company so far has been cautious about leaking anything to the press (see Seranoa Surfaces and Seranoa Hires CEO, Touts Betas). But it now appears the startup is looking to raise another round of funding. A VentureWire Alert report earlier in the week says Seranoa hopes to close a $15 million Series B funding round by April.

The item quoted CEO Graham Pattison as saying that existing investors would be included, as well as a hoped-for new strategic investor. Further information that Seranoa is in trials with Allegiance Telecom Inc. (Nasdaq: ALGX), Broadwing Inc. (NYSE: BRW), and Pac-West Telecomm Inc. (Nasdaq: PACW) was revealed, as well as news that Pattison hopes Seranoa will sign a customer over the next three months and become cash-flow positive by the fourth quarter of 2004.

Not bad for $3.50, VentureWire! Wish we'd written it ourselves. Apparently, though, Seranoa wishes it never happened -- and is downplaying the speculation.

"I don't know where all this came from," fusses Pattison, who was on a plane returning from California when the news leaked out yesterday. He'd been attending a VC conference sponsored by VentureWire parent Technologic Partners. He says he "would not deny" the facts of the article but insists they aren't the full story -- and weren't given in an interview to a reporter.

"I had one brief conversation in the hallway with someone from VentureWire, in which I mentioned that of course we were in the process of raising money and hoped our existing investors would participate," Pattison says. In his view, other conversations and presentations of the conference, presumably undertaken on a confidential basis, found their way into the news item.

Loose lips...

— Mary Jander, Senior Editor, Light Reading

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