VC-Backed Busts: Novafora

#1. Novafora

San Jose, Calif.-based provider of video processing technology.

The company raised $12 million in 2007 Vertex Management and Gemini Israel Funds, but the big dollars came earlier this year when those same VCs helped finance Novafora’s $255 million acquisition of publicly-listed Transmeta Corp.

What Happened?
The company was cash-positive, but shut its doors and laid off all 40 employees on June 29, after being unable to attract additional venture capital funding.

“VC appetite has really dried up for later-stage semiconductor companies,” says a former Novafora executive, reached by peHUB less than 24 hours after the collapse. “They all want to do social networking and things like that.”

Novafora’s creditors were in control at last check, and were assigning a trustee who would manage a sale of Transmeta’s intellectual property (designed, in part, by Linus Torvalds).

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