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Funding for startups

Startups Prepare for Pitchfest

DALLAS -- Startups seeking funding in the telecom equipment space? Who's kidding whom?

Believe it or not, venture funding activity still exists. And 30 young companies -- including some telecom and wireless startups -- are getting a chance to pitch their wares to an audience of more than 400 moneymen from Texas and elsewhere in the southwest who will gather here at the Southwest Equity Capital Summit (SECS), an annual venture investment confab.

"It's a good place to learn what's on the minds of the VCs," says Scott Grout, CEO of Chorum Technologies Inc., a company that closed a $54.7 million funding round about this time last year.

So what does a young startup do to raise money in this environment? Grout's advice for startups seeking capital is to be realistic about funding terms, demonstrate a deep understanding of the market you're trying to penetrate, and "state credibly what your exit strategy will be."

"At the end of the day, investors get into an investment so they can someday get out," he says.

One startup that's busily preparing for its moment in the spotlight is jNETx, a Dallas-based developer of middleware for telecom operators. "Obviously we're excited about the opportunity and we want to do the best possible job," says Steve Hollis, founder and VP of jNETx. "That excitement might lead to a little nervousness."

Hollis says jNETx is looking to attract $5 million in new financing for its middleware, which he says will help wireline and wireless carriers implement new phone services, ranging from short message services to automated personal secretaries. JNETx's software enables the new services, but the service creation itself is left to third-party developers, a division of labor that is paying off handsomely for NTT DoCoMo Inc.'s (NYSE: DCM) i-mode platform.

In a way, jNETx's software appears to be a next-generation service control point, the node in a telephone network that hooks into several databases and signals network switches to provide specific services. The startup says one European wireless network is already installing its software to run tests.

Hollis says jNETx competes with Infitel International N.V., Incomit, and AePona Ltd. So far it has raised about $2 million in funding from its founders and Mint Capital, a London-based venture firm.

The company has about 35 employees, most of them software developers based in Moscow [ed. note: Russia, that is, not Idaho].

Other attendees will include big corporations who are either looking to partner or invest in startups. Fujitsu Network Communications Inc. (FNC), based in Richardson, Texas, says it is always looking to team with photonic component startups and, in rare cases, systems vendors. "I'm going to be talking a lot less about investing and a lot more about partnering," says Brian Gawick, senior VP of product development at FNC.

Not all early-stage startups seeking funding will be met with fistfuls of cash, despite the prime audience, says John Adler, a venture partner at InterWest Partners. "I know we're going to see deals, but I don't expect that I'm going to see one that makes me stand up and say, 'I'm going to fund that thing.' "

However, startups like jNETx, that are looking for additional funding at SECS or a similar venue, may have more success. "I think it's really good for companies that have got funding already and they're getting ready to go out and get follow-on funding from groups like VCs," Adler says.

— Phil Harvey, Senior Editor, Light Reading
www.lightreading.com
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lastmile 12/5/2012 | 1:00:06 AM
re: Startups Prepare for Pitchfest Reference Msg#24 9/29/2002
'Remember the flintstones with their video phones. Yes that is fiction but that will soon become a reality.'
http://news.com.com/Vonage+goe...
BobbyMax 12/4/2012 | 9:40:55 PM
re: Startups Prepare for Pitchfest It is very strange at a time when Optical Companies are closing down here in the US and abroad. These group VCs must be out of their minds to engage in activities and unproductive. These VCs just want to make commissions. Nation's economic interest are not their minds.

Optical industry does not much future. There may be some marginal interest in optical networking in the man environment.

The VCs activities are not very helpful in that they have caused tremendous unemployment and have destablized the telecom industry.
lightreader 12/4/2012 | 9:40:51 PM
re: Startups Prepare for Pitchfest "optical industry does not much interest"??

So why, may i ask, are you wasting your time
on this site? and even taking the time to
post? "maybe you not much interest"?
rjmcmahon 12/4/2012 | 9:40:50 PM
re: Startups Prepare for Pitchfest So why, may i ask, are you wasting your time
on this site? and even taking the time to
post?
_______________

Because he is stuck, living in denial, and is asking others for help in the only way he knows how. We can kick him while he is down or we can help him stand up.

So the question really becomes why do *we* ridicule somebody who is asking for our help? Our own insecurities is no excuse.
cplayer 12/4/2012 | 9:40:44 PM
re: Startups Prepare for Pitchfest I think you are out of your mind BobbyMax. What commission are you talking about that VCs get? Why should VCs be concerned about the nation's economic interest? They are concerned about their own economic interest. If they pick the right technology to back they will be made richer while benefiting the nation's economy. If they pick the wrong technology they will be made poorer while still benefiting the nation's economy. VCs want to make money like any one else. They saw an opportunity in the telecom industry in the late 90s and funded a bunch of companies. This caused tremendous employment. They didn't force anyone to leave whatever industry they were in and join the telecom industry. Market forces did that and everyone went along for the ride. It was fun while it lasted.
TeleGone 12/4/2012 | 9:40:41 PM
re: Startups Prepare for Pitchfest Things can not be any worse in this Telecom Corridor. Nowadays people from Alcatal, Nortel, Eriksson, and many other startups who still alive are talking about close instead of lay-off.

I am very pessimistic, because I just could not see any sign of improving. Actually, now everyone are outsourcing engineer jobs to India, and I can only see this trend continue even there is a industry recover.
Oakster 12/4/2012 | 9:40:38 PM
re: Startups Prepare for Pitchfest rjmcmahon wrote...

Because he is stuck, living in denial, and is asking others for help in the only way he knows how. We can kick him while he is down or we can help him stand up.

So the question really becomes why do *we* ridicule somebody who is asking for our help? Our own insecurities is no excuse.


rj:

I mostly enjoy your posts to these boards. They are generally insightful and illuminating.

But in the case of BobbyMax, I vote for kicking him while he is down.

I think we've all discerned quite some time ago that BobbyMax is a Light Reading staffer who is paid to post inflammatory gibberish solely for the purpose of inciting [oft-emotional] responses.

You notice how he never adds anything constructive to the dialog, but almost without exception, his messages always lead to multiple responses of ridicule and/or rage.

Gotta do what ya gotta do to keep traffic glued to the site, right?
rjmcmahon 12/4/2012 | 9:40:31 PM
re: Startups Prepare for Pitchfest Oakster; If you want some ass kicking that your son could be proud of, Jimi could use a few jolts in the cranium. Let him know that stealing others' productivity does not enable anybody and, more importantly, it is behavior we will not tolerate.

http://www.lightreading.com/bo...
optical Mike 12/4/2012 | 9:40:30 PM
re: Startups Prepare for Pitchfest How old can a startup be and still be termed a startup?
I left a large established telecom company for the promises made by the start up/venture capital funded company.... Stock options by the thousand a good salary and the all important IPO.. That was almost three years ago and this startup was four years old at the time. There are still 25% more employees than when I started but less than 50% of what we employed eighteen months ago. But is it still a startup?
BobbyMax 12/4/2012 | 9:40:20 PM
re: Startups Prepare for Pitchfest Telegone wrote the following:

Things can not be any worse in this Telecom Corridor. Nowadays people from Alcatal, Nortel, Eriksson, and many other startups who still alive are talking about close instead of lay-off.

I am very pessimistic, because I just could not see any sign of improving. Actually, now everyone are outsourcing engineer jobs to India, and I can only see this trend continue even there is a industry recover.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Telegone, you accurately reflect the situation. The Government including law makers do not care. In the year 2001, when layoffs were poccuring. many companies ( Cisco, Sun Micro Systems, Intel, Cypress, H-P, Compaq and other counless companies, were hiring System Administrators, Database Adminitrators, GaS Station Attendants, Restaurant workers on H1 Visa from India. I still do not understand why the government is exporting low grade software workers, gas station attendants, and restaurant workers from India. Do we not have enough restarant workers?

There is so much loophole in the law regarding H1-B visa works that I besgin to tremble. We have all the engineers capable of doing engineering work.

But the guys who swimming in the cesspool of options forced the government to import HIB visa workers from India. We are not preparing our engineers for the future. Our engineers do not get steady jobs because of H1-B visa workers from India.

About 70% of H1-B visa workers from India stay here in this country. Some of them even engage in fake marriages so that they can stay here.

Another trick practiced by H1-B vis aworkers is that before they produce at least three children that are born here on the US soil. A lot of these softworkers from India come on the strength of their children who were born here to serve the immigration vehicle for the parents ands friends.

I heard that there were over 500,000 Indian workers from India creating chaos with our school
system, Hospital System and Health Care System.

I am also told that California is one of the worst affected areas inthe country.

The american born worker is treated the sameway as H1B visa worker from India. In fact american workers are laid off first.

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