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Silkroad Twists and Turns

Light Reading
News Analysis
Light Reading
2/9/2000

Since Silkroad Inc staged a big splash at the Telecom 99 show in Geneva last October, the innovative optical startup has gone very quiet. It's effectively shut down its web site - http://www.silkroadcorp.com -- stopped making public appearances and started shedding staff.

What's up?

The company has undergone a crisis but it'll survive to fight another day, according to Chris Rader, who took over as Silkroad's president last November. Rader, who had been "director of global education development" prior to the crisis, says Silkroad is about to be reborn. A new senior management team was approved at Silkroad's annual general meeting of shareholders last Saturday (Feb 5). And plans for "restructuring" the company and bringing in new money are in hand.

The fog will clear "in the next few weeks" according to Rader. "We will have products out the first half of this year," he adds.

Of course, Silkroad has made big promises before and failed to keep them. Last fall, Silkroad told Light Reading that it would ship products in the first quarter of this year -- a deadline that it will miss. It also said it was still negotiating its first round of financing. That seemed strange at the time, since most startups don't wait until they're about to ship products to raise their first round of financing.

It now looks as though those negotiations fell through, leaving Silkroad with a cash crisis. That probably left the founders in a position where they lost control of the company.

Rader declines to comment on this speculation, and says he has "no knowledge" of ex-Silkroad employees setting up a rival startup, a rumor currently circulating Silicon Valley. James Palmer, the inventor of Silkroad's innovative "Refractive Synchronization Communication"(RSC) technology, is still a Silkroad employee, Rader adds.

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