Jim Dorrian still holds 45 million shares in 4DS
From the Fin Reivew 2016
im Dorrian has done well from Silicon Valley – he founded a company that sold to Oracle for $4 billion in 2007 – but he believes the Australian Securities Exchange now beats it as a source of "opportunistic capital".Dorrian is chair of 4DS Memory, a California-based developer of technology that's touted to supersede Flash data storage, known as resistive random access memory or ReRAM. It acquired Perth-based mining shell Fitzroy Resources and raised $2.75 million to list on the ASX in December 2015.Perth-based investors Brian Beresford and Simon Panton have been on 4DS' register since its 2007 seed round, but the company was investigating traditional Silicon Valley venture capital options to honour its end of a 2012 development partnership with Western Digital, the data storage giant which recently bought Sandisk for $US19 billion ($25 billion).
However, 4DS has been an unlisted public company in Australia since 2012, when prominent Perth biotech entrepreneur David McAuliffe invested, and major investor Dorrian was slowly won over to the idea of an ASX reverse listing."We were going down a different path so I had to get educated on the capital market in Australia, which to be honest I didn't know much about," says Dorrian, whose Arbor Software developed and, in 1997, sold technology which eventually became Oracle's ubiquitous Essbase database management platform.
Dorrian soon realised the trend of down-and-out ASX-listed mining companies reinventing themselves as technology startups, including fellow US ventures like 1-Page and Droneshield, was unique.More open-minded"In the US, these tired companies get turned upside down and all the money goes to lawyers' fees and the government," he says."But in Australia you've got investors willing to roll the dice again; they believe in seeing what the future looks like."Dorrian admits Australian investors also represented "inexpensive" capital compared to US venture capital, but "smarter money" in the sense they were more open-minded and less controlling."Venture capital in the US now is all about 'How many customers do you have and what's your momentum?', which is hard for a long-range, IP-investigation play like us."Dorrian, who made another fortune post-Arbor as a general partner at Crosspoint Venture Partners, where deals included Bill Me Later's $1 billion acquisition by Paypal in 2008, was confident 4DS could become his biggest deal ever."We can be one of the 10 or 15 players that builds the data storage infrastructure to cope with the data age to come."Flash will not be replaced overnight – it is too embedded in too many businesses – but it cannot forever keep up with the demand for higher-density storage, faster access, greater endurance and slimmer devices."Easier to shrinkDorrian claims 4DS's differentiator was that its technology does not require a filament, which makes it easier to shrink.Perth is becoming an epicentre for tech plays on big, blue-sky markets, according to 4DS' investor relations manager, Mel Buffier."WA investors look for well-advanced technology with a history of significant spend on R&D, that is targeting a market with enormous potential," she says.The ASX was an attractive alternative to venture capitalists demanding "untenable" entry terms as well as dominating the development program, and controlling exit timing and valuation at the expense of ordinary shareholders, she adds."Listing on the ASX provides 4DS with access to capital and investors that back technology and allow the inventors to achieve progress with minimal interference."
