Chipidea: Successful Exit of a Venture Capital Investment

This case describes the situation faced by the CEO of Chipidea after having received an unsolicited offer to sell his company. Chipidea was founded in Lisbon, Portugal, by José Epifanio da Franca, to design analogic microchips using technologies developed by his team at the Instituto Superior Técnico in Lisbon. Franca has soon perceived that in a digital world inhabited by analog humans there would be a growing need for systems that would provide the interface between the analog and digital worlds. Through successive venture capital rounds Franca and his team built what would become as key global reference in the world of digital chips. The case presents the company’s evolution from inception to the day it was faced with an unexpected offer to buy the whole company. The case highlights the dilemma faced by many entrepreneurs between cashing out their equity ownership in the venture or holding it for some more years while trying to increase its value. It also discusses the many alternatives ways to liquify their investment, including auctioning the company or do an IPO. There is information to discuss the process as well as the pros and cons of each of the several alternatives facing the founders.
This case is suited for the “exiting investments” section of courses in entrepreneurial finance and venture capital.

Author: Luís Rainho, Paulo Soares de Pinho
Reference Number: NSBE-16-14002
Number of pages: 19
Publisher: Nova School of Business and Economics
Teaching Notes: Yes
Language: English
Price: € 3,50