Terago Soldiers On
Two weeks ago, things looked grim for the chipmaker: According to reports in the local press, Terago shut down its Maple Grove, Minn., operations, where the majority of its staff was based, on Friday, May 31. Lack of funding was the obvious cause.
More than 60 employees arrived at work that day to find the doors locked, only to be told they had been terminated with immediate effect, says a report on www.twincities.com.
Now, however, it looks likely that Terago will find the funding it needs to survive, according to Bart Stuck, a partner at Signal Lake Ventures and also a board member at Terago. "We are seeing some funding activity that we did not expect, and we're seeing a restart activity," he told Light Reading. "Stay tuned next week and you'll see things happening."
"It's one of these unfortunate things where people who put up the money drive a hard bargain," he adds.
Terago surprised the industry earlier this year by announcing that it was the first company to ship an OC192 (10-Gbit/s) network processor (see Terago Springs a Surprise). But competition was not far behind, and now there are four or possibly more network processor vendors shipping silicon (see EZchip Sallies Fourth and Third-Time Lucky for Fast-Chip?, for example). This will certainly have contributed to its difficulty in raising money in what is already an unfriendly venture funding climate.
Signal Lake appears to be pulling out all the stops to save Terago. Two of its partners sit on Terago's board: Stuck and Michael Weingarten. Weingarten told the press that he believes Terago has the leading technology among network processors. He also has experience as a turn-around manager and Chapter 11 bankruptcy court trustee -- just the person a startup needs to get it out of a financial hole.
Terago executives did not wish to comment at this time.
— Pauline Rigby, Senior Editor, Light Reading