Silicon Valley Medical Technologies
COST OF CAPITAL
Directed
Silicon Valley Medical Technologies - SIVMED was found in San Jose, CA, in 1982 by Kelly’s O’Brien, David Roberts, and Barbara Smalley. O’Brien and Roberts, both MDs, were on the research faculty at the UCLA Medical School at the time; O’Brien specialized in biochemistry and molecular biology, and Roberts specialized in immunology and medical microbiology. Smalley, who has a PhD, served as department chair of the Microbiology Department at UC-Berkeley.
The company started as a research and development firm, which performed its own basic research, obtained patents on promising technologies, and then either sold or licensed the technologies to other firms which marketed the products. In recent years, however, the firm has also contracted to perform research and testing for larger genetic engineering and biotechnology firms, and the US government. Since its inception, the company has enjoyed enormous success – even its founders were surprised at the scientific breakthroughs made and the demand for its services. One event that contributed significantly to the firm’s rapid growth was the AIDS epidemic. Both the US government and the private foundations have spent billions of dollars in AIDS research, and SIVMED had the right combination of skills garner significant grant funds, as well as perform as a subcontractor to other firms receiving AIDS research grants. The founders were relatively wealthy individuals when they started company, and they had enough confidence in the business to commit most of their own funds to the new venture. Still, the capital requirements brought on by extremely rapid growth soon exhausted their personal funds, so they were forced to raise capital from outside sources. First, in 1991, the firm borrowed heavily, and then in 1993, when it used up its conventional debt capacity, it issued $15 million of preferred stock. Finally, in 1996, the firm had an initial public offering (IPO) which raised $50 million
Directed
Silicon Valley Medical Technologies - SIVMED was found in San Jose, CA, in 1982 by Kelly’s O’Brien, David Roberts, and Barbara Smalley. O’Brien and Roberts, both MDs, were on the research faculty at the UCLA Medical School at the time; O’Brien specialized in biochemistry and molecular biology, and Roberts specialized in immunology and medical microbiology. Smalley, who has a PhD, served as department chair of the Microbiology Department at UC-Berkeley.
The company started as a research and development firm, which performed its own basic research, obtained patents on promising technologies, and then either sold or licensed the technologies to other firms which marketed the products. In recent years, however, the firm has also contracted to perform research and testing for larger genetic engineering and biotechnology firms, and the US government. Since its inception, the company has enjoyed enormous success – even its founders were surprised at the scientific breakthroughs made and the demand for its services. One event that contributed significantly to the firm’s rapid growth was the AIDS epidemic. Both the US government and the private foundations have spent billions of dollars in AIDS research, and SIVMED had the right combination of skills garner significant grant funds, as well as perform as a subcontractor to other firms receiving AIDS research grants. The founders were relatively wealthy individuals when they started company, and they had enough confidence in the business to commit most of their own funds to the new venture. Still, the capital requirements brought on by extremely rapid growth soon exhausted their personal funds, so they were forced to raise capital from outside sources. First, in 1991, the firm borrowed heavily, and then in 1993, when it used up its conventional debt capacity, it issued $15 million of preferred stock. Finally, in 1996, the firm had an initial public offering (IPO) which raised $50 million