Article Abstract:
Analog Devices is a $214 million a year Massachusetts company which makes electronic components for scientific and engineering applications. The company had managed its growth well from its 1965 beginnings, but as technology rapidly advanced the company felt it was left behind. Instead of buying small, promising companies outright, and possibly losing key talent and management, it decided to work out unique arrangements with these same companies. The relationship Analog developed with ten small companies involved financial support and working together to develop ideas which would mutually benefit all parties involved. Analog has always displayed sensitivity to changing market conditions, and it utilized this same sensitivity in the arrangements worked out with these small, growing, technological companie. In addition to money, Analog offers these firms executive advice but does not tell the smaller companies how to run their businesses. It will be years before it can be determined if the approach Analog is taking with these businesses is successful, but it says a lot for the company that it is working to keep the entrepreneurial spirit alive.
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Article Abstract:
When Knogo Corp. was looking for a way to finance future expansion without putting itself in debt for the long term, the company president came up with a unique solution. The company borrowed the money from Swiss banks at a very low rate of interest. The debt can be converted into company stock, which means that Knogo may never have to repay the loan with cash. Flow Industries is a privately held research company which raised capital for the production of their innovative wind turbine by forming a limited partnership. The company hopes to repeat the process in the future and, eventually, to take the company public. Gerald Grossman is not your typical venture capitalist. While most venture capital companies concentrate on the high technology areas, Grossman invests on the slow track, the more traditional businesses where he can bank on the hard assets of a company, for he does not like to take equity risks.
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Article Abstract:
In 1981, when the founders of Sytek, Inc., a consulting firm, decided to diversify into manufacturing the hardware and software for local-area networking systems, they began looking for someone willing to make large capital investments. Although they had offers from venture capitalists, they decided to join forces with one of the giants of the cable industry. Industry giants have tried before to help out smaller companies, often with mixed results as they seek too much control in the start-up companies. Sytek was determined not to let that happen, and before agreeing to any financial help, spelled out their own position which included future independence. Both parties agreed to the terms, and now, over two years later, the relationship between the two companies remains beneficial to them both.
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