ANN ARBOR, Mich. – Ardesta LLC in late October received a $100 million to fund its activities as an accelerator for the microsystems, or microelectromechanical systems (MEMS), industry, said Rick Snyder, chief executive officer.
Ardesta was founded in 1999 as MEMS Tech by Avalon Investments, a venture capital firm founded by Snyder in 1997. Prior to founding Avalon, Snyder was president and chief operating officer at Gateway Inc. from 1991 to 1997. Avalon will no longer make any new investments, Snyder said, explaining that he is now turning all of his focus to Ardesta.
Ardesta plans to use the majority of its funding for its VC investing program, Snyder said. The company plans to back early-stage companies developing commercial uses for microsystems technology in the optical, wireless, bio-medical and general industrial market sectors, he said.
Ardesta will make initial investments of approximately $1.5 million to $3 million, he added. By 2002, the company should amass a portfolio of approximately 20 companies, he said, adding the portfolio should be split evenly between companies founded by Ardesta and minority investments in other companies. Because Ardesta is set up as a corporation, its fund does not have a management fee or carried interest structure, he noted.
Ardesta will scout for deals nationwide, Snyder said. “In a year or two, I hope we will be looking for deals internationally,” he added. Meanwhile, the company is also looking into the possibility of establishing as many as three incubators for microsystems companies in the U.S. The company is currently looking at founding incubation facilities in Ann Arbor, Mich., Berkeley, Calif. and Albuquerque, N.M., – near the University of Michigan, University of California and Sandia National Labs respectively, which are the leading microsystems research facilities in the country, he added.
Once up and running, the incubators will provide companies with networked office space, legal and financial services as well as human resource services, Sndyer said. It’s too early in the process of getting the incubators up and running to provide any more specific details about how the proposed incubators will operate, he added. He did say companies funded by Ardesta will not have to participate in the company’s incubator program.
In addition to VC funding and incubation, Ardesta plans on engaging in what Snyder calls industry building activity. “We are trying to be innovative in the field and be innovative in terms of microsystems industry developments,” he said. Ardesta’s industry building efforts include constructing a pilot fabrication facility for microsystems technology and founding an executive search firm. The company has already founded Ardesta Media to create microsystems publications and to coordinate industry trade-shows, he said.
Investors in Ardesta’s recent round of funding included Lurie Investments Inc., Avalon Portfolio LLC, the Ralph Wilson Equity Fund, JFM Investments, Masco Capital Corp., Avalon Investments and the company’s management team. Snyder declined to say how much each investor contributed to the round. He did say the company had until the end of this year to expand the round of funding by $50 million to $150 million, if it can find additional investors who want to participate. Even if Ardesta does not bring any additional investors into the round, the company will not need any additional rounds of financing until 2002, he added. Ultimately, the company’s long-term goal is to go public, he said, adding he envisions this event occurring within a five-year time frame.
Ardesta currently has a team of eight employees, and within two months it will likely scale up to 12 people, Snyder said. The company is also in the process of founding its first start-up, a company in the chemical sensor business likely to be named Sensation, he added.