Full story:
Founder sells $100 million of TeraBeam shares, steps
down
Saturday, September 2, 2000
By DAN RICHMAN
SEATTLE POST-INTELLIGENCER REPORTER
Greg Amadon, the founder of Seattle start-up TeraBeam Networks Inc., was
a happy man yesterday evening.
Yes, he is out of a job, he conceded. Earlier in the day he had yielded his
chairmanship to Chief Executive Dan Hesse; he retained a seat on TeraBeam's
board of directors, but no other official duties.
On the other hand, he noted, he is $100 million richer.
Amadon, a self-described serial entrepreneur at 48, sold half of his one-third
share in TeraBeam to Softbank Venture Capital, among the earliest investors
in the high-profile company.
"This is every entrepreneur's dream," Amadon said jubilantly. "I wrote a good
script, then had the good fortune to recruit the equivalent of Steven Spielberg
to direct the movie," he said, alluding to Hesse.
Softbank already had $26.5 million invested in the company.
"The deal bodes well for Softbank to pay commensurate attention to the
company, to bring additional resources to it," Amadon said.
TeraBeam has drawn national attention, and blue-chip investments, with
technology it says will beam a safe, invisible, laser-borne Internet connection
through office windows -- dirty or clean, rain or shine -- at minimal cost.
To date, the company has raised $576 million. Most recently, Lucent
Technologies Inc. invested $450 million for a 30-percent share. Other
investors include Merrill Lynch, Morgan Stanley Dean Witter, Capital
Research and Management Group, Fidelity Management & Research,
Madrona Investments, Oakhill Venture Partners, T. Rowe Price Investment
Services, and a handful of individuals.
After the deal closes, Amadon will remain the largest individual shareholder.
Hesse is a seasoned telecom executive whose recruitment from AT&T
Wireless in March is regarded as a TeraBeam milestone almost as important
as the technology itself. He described Amadon's departure as "a typical
handoff as a startup matures."
TeraBeam is preparing to roll out service in Seattle in the first quarter of 2001.
Under the circumstances, Hesse said, "the skill set Greg had was not as
appropriate" now as it was when Amadon, a former TV cameraman, got a
brainstorm during a boring meeting and spent the next 18 months in stealth
mode building a company around his vision.
While acknowledging he and Amadon, as "two strong leaders at the top of the
business," disagreed on some matters, Hesse said Amadon's departure was
amicable. But a source close to the company disputed that.
The source said Amadon "really wanted to regain control over corporate
strategy" after Hesse brought in at least four former AT&T colleagues,
resulting in a management team Amadon regarded as insufficiently
entrepreneurial.
Two months ago, he tried to get a board member fired, the source said. And
only last week his associate, Petra Franklin, was soliciting proxies via e-mail
from shareholders in an attempt to help Amadon take control of the company.
Company insiders complained that Amadon also hyped the company's market
value, which "hamstrings the ability of the company to live up to that," the
source said.
Amadon, while highly regarded as an innovator, has had less success as an
executive.
He says he made a success of Cellular Technical Services Co., which offered
fraud control for the cellular phone industry.
But he faltered with Virtual i/O Inc., a Seattle company he co-founded in 1993
that produced virtual-reality headsets when that technology was expected to
boom.
"He drove that company into the ground, and knowledge of that is widespread
and makes Wall Street very nervous," the source said. "With a half-billion
dollars now at stake, things get very formal." |
