With traditional sources of venture funding drying up, small EDA firms turn to the big companies that depend on their tools.
To counter this practice, the industry needs corporate investment that feeds directly into small EDA companies who increase competitiveness and innovation. Without this financial vehicle, innovation left to larger companies will be slow to market, if it appears at all.
And, in fact, this is where fledgling startups and emerging EDA companies are turning for strategic investments. Many approach large, leading-edge electronics companies that rely on EDA technology to maintain that edge. Many have internal venture groups and understand the leverage EDA tools provide to their bottom line and product development process. They realize that they cannot rely solely on the existing EDA oligopoly to provide them with the necessary portfolio of new solutions.
As a result, when they invest in an EDA company, all parties benefit from those innovations that are rolled out to the market. These sorts of investments offer more than symbiotic benefits –– additional working capital, shared expertise, product influence, and early access to new technologies. The companies also become strategic partners.
"Partner" is a word overused today in EDA, much as the word "friend" is overused today in social circles with the advent of Facebook. A true strategic partnership creates a shared vision and goal. Both companies are invested in a solution and have a stake in the outcome.
In a world where design is becoming more complex and engineering talent a precious and limited resource, real partnerships are critical. They provide talent and user expertise to drive a solution that meets design needs with efficient resource allocation, a specialty often overlooked at small startup companies. A quicker development cycle for innovative solutions benefits both sides of the partnership but also has a positive impact on the market in general.
The venture capital community's interest in EDA is disappointing, but has opened the door to a new form of investment. Leading-edge electronics companies have stepped in to support startups and small EDA companies to drive more innovation. This shift is good for the investor, the company and the electronics industry.
Rick Lucier, a 30-year veteran of EDA, is president and CEO of Carbon Design Systems, a supplier of virtual platform and secure model solutions.