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“The whole problem with chip investments is no one wants to fund them,” Mike, a VC I knew, said to me. “But we’ve solved that with our investment in Smooth-Stone (yes, this really was the company’s name).”
“How?” I asked.
“Easy. We have the whole syndicate lined up for the life of the company. We have $100 million already raised. This company is going to win and win big!”
“That sounds great,” I said. “I’ll watch with interest. Who are you competing with?”
“We’re going to beat Intel in the server market,” Mike said, confidently.
“Good luck with that,” I said.
“You’re not a believer, I take it.” Mike said.
“No, I’m not. I’ve been to this movie before,” I replied.
Money is great, but you’re going to need more than money to win.
“What do you mean?” Mike asked me.
“Do you remember Tabula?” I asked.
“Yeah, they’re still around. We passed on investing in them. We thought they couldn’t beat Xilinx.”
“Then you know why I am dubious about Smooth-Stone,” I said. “They’re trying to do to Intel what Tabula was trying to do Xilinx. It’s so hard to beat…
