EDA startups: seven million to takeoff

EDA startups that matter: consider Apache, Atoptech, and Berkeley Design Automation. All of them are well run, generating cash, and have sold more than the proverbial 'one copy to everyone.' Some of them are daring to be radical in radical times (Atoptech business model, Berkeley Design's Nano). Probably most important, these are the companies that the big guys wish were not around. EDAGuy, I wonder in which company you are that you 'never, ever hear anything about EDA startups..." Yikes. For the record, I am not in an EDA startup.

Having worked Cadence and Synopsys, analog has always been a hot spot for EDA startups to innovate and automate parts of the flow that were missing and we weren''t focused on. Neolinear, Sandwork, Sabio were all acquired. Ciranova, Solido, Berkeley, Gemini now. Gary Smith called it the year for Analog.

Atoptech is another startup I would look out for

The root cause of this broken paradigm is the decline of the role of the Valley as the starter motor and engine in the eco system. EDAGuy has the symptomatic effects spot on - Ambit was successful because it achieved critical mass in the vibrant Bay Area/US/early adopter market. It was nowhere in Japan/Asia and noise level in Europe yet it achieved a model exit. The engine has gone so where do the start-ups go for those $$ that Paul speaks of in his piece? Exactly. The Valley is diminshed, the rest of the US market now largely behaves as conservatively and slowly as Europe where ipso facto it is unlikely to happen too and Japan is and always will be a lagging adopter. One prospect is for EDA start-ups to drive their early strategy through service engagements where they can sell and position successfully against compelling need with a differentiated offering and in the process secure those crucial $$ which can be re-invested in R&D/productization. Don''t ignore it the services market is much larger than EDA despite the paltry view that the EDA consortium shows. Joe Costello for all his critics had that vision absolutely understood.

Over $7M in revenue? Apache, Atrenta, Denali, Jasper, and probably a few more. The first 3 made that level quite a while ago. The sad things is how huge the list is of companies that went beyond twice that, $14M+ in funding. Given that the current acquisition multiples are 2x to 3x annual revenue, it would seem to make it difficult for those investors to get their money back (and for the employees to make anything off their stock options).

So could you point us to some examples of today's promising, up-and-coming EDA startups? The Ambit example is illustrative, but also more than a decade old at this point. Around the turn of the century, I worked at a couple of promising EDA startups that had real solutions that solved real, hard problems, and then watched both collapse because large customers didn't want to buy from a small company. I now work in the verification division of a large EDA company, and I'll tell you that we never, ever, hear anything about EDA startups. As far as we're concerned, they don't exist. No startup challenges us in even the smallest way, and in the 3+ years I've been here, no one has left our division to go work for one. My combined experiences lead me to believe that EDA startups don't matter anymore. If you can prove me wrong, please do: I much preferred working at small companies!