For its part, Mannesmann gained a long-sought foothold in the semiconductor industry, a point that helped Intrabay in its lengthy efforts to retain intellectual property rights while getting the financial boost it needed, Whalen says. By using the infrastructure of a multinational, multi-billion dollar corporation, we got the product produced at a much lower cost than having to build the infrastructure internally. Adhering to one of Lam's cardinal startup rules, Whalen is clearly keeping an eye on Intrabay's financial resources. Intrabay's tunnel vision may help it keep costs in check, but some in the investment community say factory automation startups serving the semiconductor industry will need to adopt a broader approach to really soar. Ken Epstein, principal at NewCap Partners in Belmont, Calif., predicts that Intrabay will move beyond the semiconductor market.
Factory automation translates itself beyond semiconductor equipment.
It's probably a good market for them, but it's not going to be where they get their valuations. It's a good niche, but it's only one niche. They'll get their valuation more on the software solutions and how many other markets they can service. Not every company is fortunate enough to hook up with a well-heeled conglomerate and retain its intellectual property rights. One such company is Holbrooks Development and Manufacturing.