After raising $54.2 million from venture capitalists such as Bessemer Venture Partners and Highland Capital Partners, Mangrove Systems is shutting its doors. Light Reading reports today that the communications equipment company decided this week to close down while it supports its existing customers and seeks out a buyer.
If one can be found, investors should receive some return. But finding an acquirer after admitting that the company has no future does not stake out the strongest of negotiating positions.
Other unfortunate venture backers of Mangrove include Star Ventures, Gold Hill Venture Lending Partners, an affiliate of Silicon Valley Bank and Columbia Capital. The company most recently raised $13.2 million from existing investors last year after a $21 million second round in 2005 and a $20 million first round in 2003.
The third time was not the charm for Mangrove founder Jonathan Reeves. He previously founded Sahara Networks and Sirocco Networks, which were sold for $212 million and $2.9 billion respectively. It just goes to show that past entrepreneurial success is no guarantee for repeat performance in the future.
Tags: bessemer, mangrove, vc, venture capital
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