You may not see it at first, but there's an ecology around EDA tools. The new ideas, the breakthrough tools, usually come from startups. First there's the idea. Then come the early investors, angel funding and venture capital (i.e., private funding) to pay for everything through those fragile early years until the startup either fails or makes it big. Making it big means one of the Big Three of EDA acquires it or the startup makes an initial public offering.
C-Level's C-based synthesis failed because its venture funding dried up. "I'm looking in every corner I can find, and it's pretty bleak," said Dan Skilken, the CEO of C-Level. "We're probably the only player in the C marketplace that's figured out how to make a business of it."
Technologically, Dan was right. C-Level had seven customer tapeouts by the 2001 Design Automation Conference, while its closest rival, Synopsys SystemC, had none. But two months after he said that, C-Level was acquired by Synopsys for a song. And we have in ESNUG 386, Dan Joyce of Compaq asking Synopsys to please keep C-Level's technology alive for users. All because the private funding disappeared.
The trick is that over time, EDA has to maintain a reputation for being a good place to invest.
"EDA companies that have gone public in the last two years raised an average of around $25 million in private capital before they went public," reports John Barr of Robertson Stephens. "For each dollar a private investor put into EDA, their stock gained an average of $12.30."
This was where the Magma story got scary. When Magma broke $100 million in private funding, a few EDA veterans (and myself) privately feared what would happen if Magma didn't pull off a successful IPO. It could have been the Hindenburg of EDA — dramatically blowing up, leaving a bad taste with investors for EDA. Luckily, that wasn't the case.
"Magma raised a record-breaking $135 million in private funding before its IPO. Based on its stock price of $24.04 on Jan. 14, Magma yielded a gain of $3.17 in stock for every private dollar invested in it," said Barr. "Because of the large amount of capital raised, it's unrealistic to expect a $12.30 return in the two months they've been public."
But as far as I'm concerned, "Three cheers for Magma!" is all I have to say. I'm just happy for the entire EDA ecosystem that they IPOed successfully.
John Cooley runs the E-mail Synopsys Users Group (ESNUG), is a contract ASIC designer and loves hearing from engineers at jcooley@theworld.com or (508) 429-4357.
RSS
Digital
RSS| 
Digital| 
Mobile
