At 09:23 6/13/2000 -0700, Tim May wrote:
>If ZKS crashes and burns with an investment pool of several tens of
>millions of dollars--someone told me they'd raised more than US$75M, but I
>haven't looked closely--then "educated investors" will likely avoid this
>type of market.
At CFP, ZKS told me they had 200 employees and were growing fast, were
about to open a bay area office. Let's say they're at 250 now, and each
employee costs them $100,000 a year (hardly inconceivable, including
benefits, overhead, salary).
ZKS said in Sep 99 they had raised $12 million in a first round, and in Jan
2000 $25 million. Let's call it $40 million.
(http://www.zeroknowledge.com/media/pressrel.asp)
Their burn rate, however, has to be something like 250 employees * $100,000
= $25 million/year. So since they've been around for a few years now
(albeit with a smaller number of employees in 1999), they'd probably have
at most a year's worth of cash on hand.
Offsetting that, as an income stream, would be the deals with ISPs and a
probably relatively small revenue stream from individual subscribers. I
don't see either as generating tens of millions of dollars. In a pinch,
they could raise more cash in a hurry, but that would be at terms
disfavorable to ZKS founders and first-round investors and would mean
ceding control of the company.
-Declan
(copied to ZKS pr for authoritative response)
