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Efficient Networks
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Year Funded: 1993
El Dorado Ventures prides itself on backing strong, experienced, passionate entrepreneurs with a clear vision about the market they want to serve. As an early-stage investor, the firm is unfazed when initial product plans have to be altered, as long as management is decisive enough to make the necessary changes.
When EDV provided seed funding for Efficient Networks in 1993, the company's plan was to serve the nascent ATM Local Area Network (LAN) market. Although Efficient quickly delivered its products and became a leading vendor, the market never materialized as the company and EDV expected.
Meanwhile, a major new market emerged for high-speed DSL Internet service over traditional copper phone lines. Recognizing that the company’s ATM expertise provided an early advantage, Efficient – with the support of EDV General Partner Tom Peterson and the company’s board – changed course and began building a business supplying DSL equipment to telecom companies.
The transformation proved very successful: Efficient grew into one of the leading suppliers of broadband access products. After a successful IPO in 1999, Efficient was acquired by Siemens for $1.5 billion.
"EDV was with Efficient from the start," says former Efficient CEO Mark Floyd. “Not only is EDV exceptionally cooperative, they understand markets and have a flair for operational issues that really helped us grow the business. I could always count on them for good operational advice and financial expertise.” |
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