Startups: the Biggest Challenge

By SemiWiki

February 4, 2013

What is the biggest challenge facing an EDA startup today? By a startup, I mean a brand new company, not a company that already has a few customers and is either on a fast path to success or a slower path whereby the company can continue to grow slowly forever.

Obviously, one challenge is the funding environment. Since EDA acquisitions have typically been at low valuations, this has put investors off starting EDA companies. Of course there have been exceptions: Apache and Denali were acquired for healthy valuations but it took a long time to get there in both cases. But with computers so cheap, cloud computing providing almost infinite resource when you need it, and modern programming tools, the amount of money required to get "ramen profitable" is a lot less than it used to be. Another challenge for EDA funding is that it doesn't need enough money to interest VCs, who have large funds and want to invest the fund in a manageable number (board meetings etc) of large investments.

But I think money is easier to get hold of than something else critical: test-cases.

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