Former AMD heir apparent Atiq Raza will shed more light on his latest endeavor today when he announces a new companythat aims to speed next-generation broadband products to market.
Raza Foundries, San Jose, Calif., will provide its partners with the services usually offered separately by technology incubators and venture-capital firms. This includes hands-on engineering, management, and broadband communications and wireless networking domain expertise, as well as funding.
The goal: Accelerate the development of leading-edge broadband companies and their products.
"Except for the best VCs, they provide only minimal assistance and common-sense advice," said Raza, CEO and chairman. "What we have is a comprehensive process."
Raza has hired a stable of experts to assist partners with their technological and business needs. The executive staff includes industry veterans from high-profile organizations such as AMD (stock: AMD), IBM (stock: IBM), National Semiconductor (stock: NSM), Intel (stock: INTC), Bell Labs, Pillsbury Madison, and Sutro.
Raza said he anticipates his company will grow from 22 to 50 employees by year's end. In the next 12 months, he also aims to expand the firm's partner base from 10 to 20 companies.
Raza Foundries already has one success story under its belt. YuniNetworks, which developed a terabit switching fabric
technology, in April sold to AMCC (stock: AMCC), San Diego, for about $250 million in stock. YuniNetworks had worked with Raza for three months.
Kay Yun, CEO of YuniNetworks, said Raza Foundries helped her company with product definition, engineering support, hiring, and customer introductions.
"They were instrumental in helping us develop all aspects of our business," she said in a prepared statement, adding: "We couldn't have found a better investment."
Industry analysts tend to agree with Yun's assessment.
"He [Raza] certainly combines tremendous technical depth with tremendous sense of business and markets. That's an unusual combination," said Nathan Brookwood, principal analyst for Insight 64, Saratoga, Calif. "... I think that's what sets him apart."
David Passmore, research director for Burton Group, Sterling, Va., said Raza's variation of the traditional VC model -- adding technical staff -- could "really bootstrap" the operation of a startup.
"They have all of these specialists in areas from marketing through actual technical development, so presumably startups would find Raza more attractive than a typical VC simply because they get a lot more than just money and advice," Passmore said. "It sounds like a very sound concept, and given how important time-to-market is these days for companies developing next-generation networking products, this would seem to be a great way to go."
The challenge for Raza Foundries is to pick the winning partner companies and separate them from everybody else, said Linley Gwennap, principal analyst for the Linley Group, Mountain View, Calif. He said Raza's technical expertise gives him an edge.
"Any sort of very early financing -- it's a risky business," Gwennap said. "[Raza] has put together a pretty good staff, so I think they have as good a shot as any."
Raza Foundries received early-round funding from affiliate Benchmark Capital, as well as Technology Crossover Ventures and Bowman Capital. It also received money from Raza Ventures, an investment firm for which Raza serves as managing general partner.
Raza declined to disclose the amount raised. Raza Ventures is a separate entity that has "nothing to do with Raza Foundries," a company spokesman said.
Before starting Raza Foundries, Raza served as president, chief operating officer and chief technology officer of AMD, and also served on the chip maker's board of directors. Raza vacated all four posts in July 1999, citing only "personal reasons."