Tackling EDA’s Broken Business Model: Blaze DFM CEO Jacob Jacobsson (Part 7)

SM: Is TSMC making overtures to acquire you?

JJ: You have to ask them that. I don’t think either party has an interest in that kind of setup today because we want to see how this plays out. It is not something we are talking about actively.

SM: How did you finance the company?

JJ: The first round of financing the company had occurred before I came on board from Lightspeed. Two months into my job I had to go start raising money, not because we needed it immediately but because before we were able to exploit this new business model, we needed some buffer. As you know, EDA is not exactly the darling of the investment community. I basically said that I need to have some time to do this. The way I did it was I went out and informed people about the business model that we thought could happen but that had not happened yet. As you can imagine, that takes more time.

SM: Who financed the second round?

JJ: El Dorado was the lead. They have deep semiconductor roots.

SM: They are beginning to understand and appreciate what you are talking about.

JJ: You cannot go after the EDA guys to the extent there are any, because what you are selling is an affinity to semiconductors. I do not want to hide that I want people on the board who know how semiconductor deals are done. That is what happened.
We have some smaller investors after that. Yours truly has a little bit of money in it. This is more a sign of confidence. You told me you did your first startup right out of school. You probably did not have the financial means to do that. Nowadays, I am comfortable enough that I can do some investing. I will say that my family and I still think you should not invest in the company you do because you are paying your own salary, but I wanted to have a little stake in the venture.

SM: It sounds like you have enough time and an investment thesis with which you can build an independent, real company as opposed to something to flip right away.

JJ: You obviously have to be realistic about what happens. There is enough of a TAM that it can be an independent entity and it will be a semiconductor company even if it does not make chips. On the other hand, as I told you before, I have been lucky enough to go public a couple of times. You have to look at what happens afterwards.

SM: Don’t rush to go public.

JJ: What I mean is that you have to have a cool mind on this that in the end you have to realize that you are in the business of returning money to the shareholders, and not for some kind of self-aggrandizement.

I believe this is a potential IPO play, but if someone came tomorrow and offered $500 million I would be stupid not to sell. I am looking at this Yahoo/Microsoft thing, and it was guaranteed what was going to happen. Yahoo won’t sell right now because it has to prove something.

SM: I think Yahoo had the best deal that they could have gotten.

JJ: I think so, too.

SM: I can’t imagine the board allowed Jerry Yang to screw this thing up, because now it is going to be difficult calming the shareholders.

JJ: I don’t know who did what. The board, in a big company, has to prove that they were really negotiating and even if they come back at the same price again, at least they have proved they did something.

SM: If Microsoft ever comes back it will be at a much lower price.

JJ: You think so, too?

SM: Should I have asked you anything else that I didn’t?

JJ: You could ask me about my linguistics …

SM: Which languages are you interested in?

JJ: My first degree was a major in Russian and minor in English and German. Linguistics is for the idea of a grammatical system for things. If I ever did a PhD, I had been thinking of translation machines along different ideas than the ones you see out now. Unfortunately this idea is old, there are a number of good ones out there, and I would have to work harder. That was the idea I had at the time.

I would love to learn some more languages, too. It is a bit pathetic actually that despite that my wife being Japanese I do not speak it very much. I understand a lot but I don’t speak it. I would love to learn to speak Japanese, but not for my PhD.

SM: Thanks for sharing your story. I think yours is by far the most interesting EDA company I have talked with, I normally don’t invite them to be interviewed on this forum. Congratulations on you success to date.

This segment is part 7 in the series : Tackling EDA’s Broken Business Model: Blaze DFM CEO Jacob Jacobsson
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