Unless you've been trekking in the Himalayas the past
decade, you've noticed a big change in the nature of semiconductor and EDA startups. (And if you have been out wandering, welcome back! There's some cool new mobile technology you're going to want to know about).
Semiconductor and EDA startup companies are being funded differently, and, in a
lot of cases, for a lot less than back in the day.
Venture investment in semiconductor startups, for example,
is roughly half what it was in 2002. That's usually the mark of a maturing
industry, yet ours not only matures but the technology gets more complex every year. That creates an unusual tension: Startups are developing amazing new technologies and need funding to do it, but just what level of funding?
Semiconductor Startup Malaise
Cadence CEO and longtime venture capitalist Lip-Bu Tan is by
his own description
and tripling down" on his own semiconductor investments. That's great but he's
the exception rather than the rule.
That said, semiconductors and EDA startups are nothing if not adaptive.
The industry has spent the past decade giving itself an
expectations haircut. On top of that, new forums for investment have sprung up
in just the past several years that fund more than just music and
Some recent highlights:
So there's momentum building for crowd-sourcing some
technologies. But the news is not as rosy as Kickstarter or its fans would have
Independent analysis suggests that more than 40%
of Kickstarter projects fail to achieve their funding level, although
investors overwhelmingly tend to back the right horses (see the related info
graphic below) with their overall dollars.
On top of that, technology projects rank second-worst in
terms of success on Kickstarter, with just 39 percent achieving goal. What
works? Dance and theater projects (liberal arts majors, rejoice!!).
Dance, by the way, had the fewest number of projects (758)
submitted for the period covered in the infographic, followed closedly by
technology (806). Dance projects sought an average of $2,374 each, while
technologists were asking for $12,282, which may have contributed to
technology's high failure rate. (Then again, the average film and video project brought in $40,000).
All that said, crowd-funding is here to stay. Kickstarter reports that 2.2
million people contributed $319 million last year, funding more than 18,000
And right now, you'd be wise to jump on the Arduino-Raspberry Pi-Android and wireless bandwagons if you're looking to fund a project, at least according
to the visualization (right) of the successfully funded technology projects on
The larger question is not whether crowd-funded and
venture-funded projects will co-exist but in what proportion?
Right now the technology projects skew toward the easy,
understandable and consumer-friendly, but as people get savvier, conceivably
smaller investors could be investing money into new and interesting
semiconductor and EDA strategies (a la Andreas Olofsson and Adapteva).
What do you think?
with Lip-bu Tan, Part 2: Energizing the Electronics Industry
CEO at DAC 2013: 'I've Doubled, Tripled Down on Semiconductor Investment'