( ESNUG 508 Item 1 ) -------------------------------------------- [08/08/12]
From: John Cooley <jcooley=user domain=zeroskew got calm>
Subject: How Dean Drako's 1/2 billion dollar "side hobby" might change EDA
One of the neat things about having a mailing list that goes to literally
33,018 engineers is that people send me tips on things that I *should*
already know -- but I sometimes don't know -- thus making me appear much
smarter than I really am. :)
A classic example happened recently when this was forwarded to me:
From: [ Dean Drako of Barracuda Networks ]
Dear [ Person X ],
I am writing to let you know I have resigned as President and
CEO of Barracuda Networks. I will continue to remain a large
shareholder of the company and serve on its Board of Directors.
When I founded Barracuda 9 years ago, we started by offering
a single affordable spam filter to SMBs. The company now has
expanded to more than 140 different products, with nearly 1000
employees, 5000 VARs, 150,000 customers, $250,000,000+ in
revenue, and $100,000,000+ cash in the bank.
We achieved profitability and nearly 30 percent growth every
year since Barracuda's inception, blah, blah, blah...
- Dean Drako
Barracuda Networks Campbell, CA
I read this forwarded letter twice. There can't be two "Dean Drako's"; it's
too unique a name. I went snooping on the web just to be sure.
   
On the left "Dean Drako" Barracuda pic. On the right "Dean" IC Manage pic.
... Same face... And I recognize that smirk... Hell, he's even wearing the
same shirt, same suit, and it looks like even the same tie. Yup, same guy!
So this means Dean really founded TWO start-up companies at the same time
back in 2003??? Who the hell does that????
Why didn't he tell anyone this at all those DACs? "Oh, BTW, along with my
tiny $10 million IC Manage company that does really dull data management
stuff, on the side as a hobby I also happen to CEO a monster $250 million
web security company called Barracuda Networks..."
---- ---- ---- ---- ---- ---- ----
After I calmed down, with me being a naturally prying investigative type, my
first nosey question to myself was: "Wow. So how much is Dean now worth???"
OK, let's see. Web security/IT typically gets a valuation of 5-6X forward
revenues once they IPO. So doing the math: $250 M in 2011 times 30% growth
equals forward revenues of $325 M. A multiple of 5-6X times $325 M means
Barracuda's current ballpark valuation is $1.63 billion to $1.95 billion.
(Mentor's market cap is $1.72 billion. If Dean's company were public today,
it would be a similar to Mentor! Whoa! "Hobby company"????)
Digging some more I found that Barracuda only had 2 rounds of funding; $40 M
in 2006 and $5.61 M in 2009. Not much dilution there, so it's reasonable
that Dean, as founder, President and CEO, owns around 30% of the company.
So 30% of $1.63 to $1.95 billion makes Dean's worth from $489 M to $585 M!
(Let's just call it 1/2 a billion dollars to keep it simple.)
---- ---- ---- ---- ---- ---- ----
This sudden new $500,000,000 in personal net worth clearly puts Dean Drako
up at the Aart de Geus level in EDA. Their similarities & differences:
| Trait |
Aart de Geus |
Dean Drako |
| personal net worth |
~$300 million |
~$500 million |
| education |
Phd'85 in EDA at Southern Methodist University |
MSEE'88, UC Berkeley |
| age |
59 |
46 |
| personal technical focus |
pretty much 100% EDA from extreme frontend to extreme backend |
a mix of frontend EDA, data management, web security, IT |
| business pedigree |
CEO of Synopsys for 25 years |
Apple for 4 years, 3DO for 2 years, CEO of DAI for 4 years, CEO of BoldFish for 2 years, CEO of Velosel for 2 years, CEO of Barracuda and IC Manage for 9 years |
| business successes |
took SNPS from $0 to a market cap of $4.5 billion in 25 years |
sold DAI for $27 million; IC Manage makes $10 million; Barracuda stock will likely market cap at $1.8 billion |
| business flops |
VHDL, Behavioral Compiler, suing Magma, Lynx, Custom Designer, FPGA Express, Chip Architect, Synplicity, Arkos, SNPS Cloud, Synfora, Gerry Hsu, TLMcentral.com |
Velosel Trading Hub, DAI CoverScan, Barracuda IM Firewall, Barracuda Spyware Firewall, LizaMoon attack |
| business style |
10% home grown products from SNPS R&D; 90% acquired products from start-ups or rivals |
likes to bootstrap; very hands-on and involved in all aspects of company |
| business money style |
likes company books with lots of free cash on hand |
likes company books with lots of free cash on hand |
| acquisition experience |
57 at Synopsys; Borg style mergers; buys to keep or kill |
6 at Barracuda; Borg style mergers; buys only to keep |
| patent lawyers |
likes to bully small EDA start-ups with patent lawsuits |
minor hero for defending open source SW in IT patent lawsuit |
| layoffs |
maybe 15 to 20 over the past 25 years |
none |
| # of employees |
6,331 |
"nearly 1000" |
| Glassdoor.com rating as CEO |
95% approve |
88% approve |
| BusinessInsider ranking |
#25 of the 2011 Best Tech Co's to Work For |
#2 of the 2011 Best Tech Co's to Work For |
| most impressive competitive award |
2004 Ernst & Young Entrepreneur Of The Year |
2007 Ernst & Young Entrepreneur Of The Year |
| personal entrepreneural style |
a rock solid one-company guy who'll ride SNPS into retirement |
financial serial polygamist; likes to go in deep operationally on a few good companies |
| EDAC |
has been EDAC Chairman at least 2 or maybe 3 times |
recently elected Member of EDAC board |
| customer experience in a movie quote |
"Show me the money!" or "Greed is good." |
"Failure is not an option." |
So this July 18th news that Dean Drako resigned as CEO from Barracuda has
two major implications:
1.) It implies he'll be doing more with IC Manage. At DAC'12, Dean
showed off Zero-Time Sync, it populates engineers' tools super
quickly. BRCM did 2 GB in 15 sec. See ESNUG 505 #5.
2.) It implies he'll be doing more start-up related stuff. What Dean
will be specifically doing (in or outside of EDA) is anyone's
guess. What I do know is Dean owns DrakoVentures.com.
No matter what, it's a brilliant move. Since Dean is still a "large
shareholder" of Barracuda stock, he'll get to reap the upside of when it
goes public while off doing his IC Manage and Drako Ventures exploits.
Not a bad "side hobby" for a guy who does that really dull data management
stuff. :)
- John Cooley
DeepChip.com Holliston, MA
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Related Articles
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