Lauro Rizzatti: Still Bullish on EDA

Lauro Rizzatti, formerly VP of Marketing at verification-centric EVE, thought he was going to move to Oregon last year and retire, but he was wrong. Instead he is busier than ever, hard at work both in the EDA tech sector and in the larger world of venture capital.

Lauro is consulting with Mentor Graphics to promote the company’s ever-expanding presence in the world of emulation, and he is also involved with the Oregon Angel Fund, a group of investors led by Eric Rosenfeld and former SpringSoft USA President Scott Sandler, also busy residents of Oregon.

Mentor is one of the top two emulation companies in the world, along with Cadence. Synopsys also has a foot in the door of that market thanks to their 2012 acquisition of EVE, which brings us back to Lauro. It was after his year spent at Synopsys following the acquisition that he ‘retired’ to Oregon. Clearly, however, it was a waste of his 30+ years of experience in verification to not have him continue contributing to the conversation around that technology, hence his consulting work at Mentor.

I had a chance to talk with Lauro about all of this in a recent phone call, a discussion in which he celebrated the green of Oregon while also gently chiding the endless rain that makes that lushness possible.

“My wife is a native of Oregon,” he said, “and she always wanted to go back to Portland, which I was happy to do following my retirement. Once here, I met with Scott Sandler, who explained the structure of OAF, and I elected to participate. The fund is meant to help startups in the region. It does not focus on any particular market segment, but is wide open to any business with the potential to contribute to Oregon’s economy.

“OAF will consider any business plan and screens over a hundred proposals per year, with five chosen each year in which to invest. The amounts range from half a million dollars up to a full million, about 5 million dollars per year in investments

“Eric started the group in 2007 and since that time, the fund’s total investments are in the range of 30 million dollars. OAF has done very well, with several successful exists and only one company to date failing to return on the investment.

“What really intrigues me about OAF, however, is the fact that after thorough diligence, it still requires a two-thirds vote of the partners to move forward with any particular investment. The group as a whole really needs to believe in a startup for the investment to happen, although individual partners are free to pursue private investment in a company they might learn about during the diligence process, even if it does not appeal to OAF as a group.”

Lauro explained that when he first arrived in Oregon last year, he planned to participate as an active investor in OAF, to be heavily involved doing due diligence for startup proposals.

“However,” he said, “I ended up doing something else. I had the opportunity to do consulting in EDA instead, and that was an easy choice to make. Perhaps I’ll be actively involved in OAF later, but for now I am busy with my consulting.

“Over the years, Mentor had noticed all of my activities at EVE, writing article and promoting emulation, so I have ended up writing articles for them. Not articles that openly promote Mentor, but pieces that discuss the use of custom FPGAs versus standard FPGAs for emulation.

“Mentor, for example, uses custom FPGAs designed for emulation – they call it ’emulator-on-chip’ – but standard FPGAs have a lot more capacity, so that has been the focus of several of my articles.”

At my request, Lauro spent a moment characterizing the emulation focus at the two other big EDA companies.

“Cadence uses the IBM technology they acquired several years back,” he said, “and continues along that path. The problem is that for all of the positive characteristics of that approach, it does not scale nicely.

“To achieve the same capacity you can get using FPGAs, they have had to build big machines that require a lot of cooling. And that’s cooling by fluid, not by air. Now they’re finding the approach is running out of stream. So much so, that although last year Cadence anticipated a new offering for the emulation market by year-end, the release has now been delayed until much later this year.

“As Synopsys acquired EVE, they feel they can address the shortcomings of emulation by way of software. But if you’re building an emulation box with FPGAs from Xilinx, you have to ride the road map of Xilinx. The obvious benefit is, you take advantage of the Xilinx investment of many years to develop the silicon, so there is definitely a diverging path into the future between these two philosophies.”

Circling back to the topic of startups, I asked Lauro what he thinks about the current ecosystem in EDA, is there any room there for new companies to get started?

He responded, “EDA, unfortunately, continues to be a market dominated by the three giants in a sea of small companies existing at the mercy of the big three. The large companies not only compete with each other on the size of their sales organizations, they also compete against startups using legal and business practices to throw up roadblocks for progress.

“Given that’s been the case for some time, it’s quite amazing to look at EVE and realize that we had actually reached $57 million dollars in sales prior to the acquisition by Synopsys. Because of that, I was not that excited about selling EVE to Synopsys, but the opportunity presented itself and either we did it then or face an uncertain future in a very competitive market. That was the reality for us in 2012.”

“So are there startup opportunities in EDA?” Lauro asked, and then answered his own question.

“Well, the Big Three companies offer a menu of tools which, with few exceptions, are only of average quality. Because of their size, these companies are permeated by rules and regulations that obstruct the creativity mandatory to developing innovative solutions and technologies.

“Were I to suggest an area, however, where someone might be able to get market traction for innovative ideas in EDA, I would say it is in the analog world. There have been very few attempts to accelerate verification for analog designs.

“SPICE continues to be very slow, so an engine to accelerate SPICE could be an area of very interesting research. The users could definitely benefit from startups who are willing to wrestle with this problem and come up with better solutions.”

“Are such things happening in the universities?” I asked.

Lauro ended on a bullish note: “Absolutely. I thoroughly endorse the innovations I hear about at the university level. Great things are happening in EDA research all the time there, both in the U.S. and in Europe.

“If you want to remain optimistic about startup opportunities in EDA, concentrate on ideas and companies spinning out of the various universities involved in the technology. Today, that really is where the future of EDA innovation resides.”

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About OAF …

“The Oregon Angel Fund is a community supported, professionally managed, investor driven angel fund. The fund provides investors privileged access to the most promising startups and early-stage growth companies in Oregon and SW Washington. Founded in 2007, OAF has grown to become the most active local venue for funding startups in terms of both participants and dollars invested.”

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Tags: Cadence, custom FPGAs, Emulation, Eric Rosenfeld, EVE, IBM, Lauro Rizzatti, Mentor Graphics, Oregon Angel Fund, Scott Sandler, SPICE, Synopsys, Xilinx

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