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 Semiconductor Manufacturing Instream's Capabilities CASE STUDIES NEXX Systems, Inc. GW Associates DB Design Group |
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NEXX Systems, Inc. Series B $10M Financing; Series C $10M Financing NEXX Systems, was founded in 2001 by Dick Post. Dick previously founded ASTeX, a company which he took public and ultimately sold to MKS Instruments in January, 2001. NEXX was founded by acquiring the old ASTeX systems group from MKS Instruments in August of 2001. From inception, NEXX envisioned creating a company that offered the full complement of tools, a “franchise” for flip chip fabrication. Now, NEXX has become the leading supplier for 200 and 300 mm process tools for the flip chip industry. In order to fund its rapid growth, NEXX hired VIA to help raise and complete its Series B and C rounds of financing. Due to the strong adoption of flip chip technology in cell phone and flat panel digital televisions, NEXX anticipated a 4x increase in sales in from 2003 to 2004. Funding was needed to support such growth. In November 2003, Instream was hired to raise a Series B round of financing in a tepid venture capital market. After 2000, venture capitalists were wary of early stage investments, particularly in the capital equipment sector where large investments were needed and exit options were limited. Due to Instream’s intimate knowledge of specific venture capitalists educated in semiconductor capital equipment, Instream was able to market NEXX to a qualified group of venture capital candidates. The process successfully ended in July, 2004 with Enterprise Partners leading the round with an $8M investment, within, a total round of $10M. With an understanding of its potential growth and working capital requirements, NEXX realized that it would need additional capital to implement its “franchise” strategy. NEXX again asked Instream to assist in raising a Series C round of financing. Sigma Partners, a leading venture capital firm highly experienced in the semiconductor equipment area, expressed interest in leading the Series C round of investment. The initial terms offered by Sigma were unacceptable to NEXX existing shareholders and board. Instream then worked with NEXX management in creating an investment structure that would satisfy both Sigma’s requirements, while maintaining value in NEXX. Instream began negotiations offering a plan consisting of a common stock buyout, warrants, and preferred issuance. In September of 2005, NEXX completed its $10M Series C financing with Sigma Partners incorporating a structure satisfactory to both parties. |
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