Open HW, open design SW, and the VC ecosystem dilemma

The open model for solutions development is quickly extending from software to other technology areas, such as hardware and services. Specifically, just as open source has spawned a revolution in the technical, business, and legal model for software, open hardware will provide a swell of collaborative innovation that will create entirely new markets and provide significant business benefits to the most creative, most reliable, and most adaptable semiconductor, EDA, system-on-chip (SoC) and systems houses. The open-source software stack with Linux as its cornerstone is increasingly the preferred choice for newly venture-funded companies. Open hardware will also change the world of SoC venture investing. While the degree of openness and the business model may vary, SoC products have to be increasingly developed through a collaborative model that helps assemble IP blocks and services from multiple sources. In this paper we describe the open standards model for hardware, chip, and tool innovation, and we argue the a systematic IP valuation methodology will help the success of this environment, in that it will allow each member of the value chain - especially small VC-backed companies - to capture enough value to desire to participate.