Investment Focus
Value ranks highest here.
Telos typically invests $1M to $3M in early stage technology companies seeking first or second round financing. Our target portfolio companies include those focused on next-generation EDA, fabless semiconductors, and other technologies related to the semiconductor world. We are active investors who seek companies which offer:
- Innovative ideas for developing products or services that will create significant economic value for customers.
- People with a deep understanding of the markets and applications areas to be targeted.
- The potential to establish themselves as leading companies in rapidly growing markets.
Designs for new systems and ICs are becoming increasingly complex as Moore's law marches on and process technology nodes for semiconductor manufacturing become ever smaller. These advances continually create exciting new opportunities for startup companies. Capitalizing on these opportunities, however, requires careful planning and flawless execution. Therefore, at Telos, we don't go merely with what's hot, but instead we identify and evaluate investments by the way value is created for the end customer. And we evaluate teams by judging how well they are likely to deliver the promised value.
The following three areas are of the greatest interest to Telos Venture Partners:
Next-Generation EDA investment opportunities
Electronic Design Automation (EDA) software is an integral part of the electronic system and integrated circuit (IC) design processes. EDA software enables system and IC designers to handle the growing complexity of new systems and ICs through using more abstract and less detailed representations of the functions to be implemented in the design. Now, in addition, the IC implementation teams need tools that handle the effects of sub-wavelength lithography in IC manufacturing. We seek next-generation EDA software investments in areas adjacent to traditional EDA, primarily seeking to invest in companies closing the gaps between system design and semiconductor implementation and between semiconductor physical design and manufacturing. The march from 130nm to 90nm and then to 65nm presents significant IC design and manufacturing challenges that is spawning a flurry of startups, each wanting to deliver pieces of the solution. Over time, these solution fragments will coalesce into stable solution platforms for handling tomorrow's design and implementation challenges.
Successful next-generation EDA companies will address one or more of the following trends:
- The gap between integrated circuit design and manufacturing creates an opportunity for design-for-manufacturing (DFM) and design-for-yield (DFY) startups. The implications of sub-wavelength lithography in semiconductor manufacturing create opportunities in the post-processing of mask data and in the creation of a new generation of "manufacturing-aware" EDA software tools. The growing dominance of interconnect effects in the design process demands that yield mechanisms be understood and accounted for in the next generation of design tools.
- Control of power dissipation has become a design imperative as the proliferation of handheld, battery-powered systems continues. We are interested in opportunities throughout the design hierarchy—from system-level design down though physical design of the integrated circuit—to fund companies that are attacking the power problem.
- As semiconductors have taken on more system functions, there has been an increasing need to capture design intent at the algorithmic or system behavioral level with subsequent exploration of the design tradeoffs between software and hardware implementation choices. The opportunities for design tools in this gap are significant and there are many EDA startups forming to serve these needs.
Fabless Semiconductor investment opportunities
Complexity levels for ICs have reached the point where system design methods must be employed to create single chip solutions (often dubbed "system-on-chip" or "SoC"). In the fast evolving SoC world, we're seeing a blurring of the traditional lines between digital and analog design. Now, the analog and digital functions, which used to be addressed by separate chips, are often integrated into one. Fabless semiconductor companies create value in several areas, such as:
- Circuit design – Historically the realm of the analog designer, circuit topologies that either implement new circuit functions or implement old functions in better ways (less space, lower power dissipation, etc.) can create significant value. Mixed-signal solutions that marry digital and analog design methods to replace pure analog solutions are another example of circuit design cleverness.
- Architecture – Novel IC-level architectures, based on a deep understanding of end-system architecture trends, can create enormous business value. Innovative architectures are increasingly dependent upon the use of circuit blocks obtained from outside sources (in-licensed intellectual property) in combination with proprietary circuit blocks which represent the company's key intellectual property. An SoC design or a multi-die solution delivered in a single stacked chip package [System in Package (SiP)] are options to implement products based on this value creation approach.
- Methodology – The growing popularity of application specific standard products (ASSPs) has allowed semiconductor companies to address very specific vertical market needs. In order to the leverage the success of an existing product, derivative products must be produced to address other vertical market opportunities. Consequently, design methodology advantages that shorten the time-to-market for new derivative products have become a new way of creating business value.
Other investment opportunities
In addition to the areas of interest described above, Telos is interested in investment opportunities in other areas that leverage the semiconductor and software business knowledge of the Telos team. Examples of these opportunities include:
- Innovations related to semiconductor manufacturing, packaging, or testing.
- The application of semiconductor technology or design methods in other industries.
