How a Startup Got to the Exit First

Airepace’s sale to Cisco for $450 million is a lesson in how to grow.

Cisco’s (CSCO) deal to buy Wi-Fi switch maker Airespace for $450 million is likely to be one of the biggest acquisitions of a venture-capital-backed company you’ll see all year. A deal that big elicits cheers from nearly everyone in Silicon Valley. But the guy cheering the loudest is Tae Hea Nahm, a Storm Ventures partner, who will make more than $100 million on the deal for Storm and its limited partners. But beyond the money, the success of Airespace is a confirmation of an idea and a company that Nahm founded and managed from its earliest days within Storm Ventures.

Incubating a company sounds so 1990s, because the concept never really seemed to work. But Airespace is one of the few fledgling companies that took off. Founded in 2001, just as the technology downturn accelerated, Airespace faced challenges from a number of startups. Some of those companies, such as Meru Networks, Trapeze Networks, and Vivato, are still around. Other startups that tried to make their fortunes in the Wi-Fi world have since died. The key was to grow fast and get to the exit before anyone else did. Nahm took me through the critical moves Airespace made that allowed it to outmaneuver its competitors.

By Michael V. Copeland

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