With McCaw, you can bank on raising money
Craig McCaw knows how to raise money. The wireless entrepreneur did it again this week, reaping $600 million in the public markets for Clearwire...
Seattle Times technology reporter
Craig McCaw knows how to raise money.
The wireless entrepreneur did it again this week, reaping $600 million in the public markets for Clearwire, which is building a nationwide wireless broadband network.
On Wednesday, the Kirkland company sold 24 million shares at $25 each. It also set aside 3.6 million shares to cover any extra demand.
Founded in October 2003, the company already is valued at more than $4 billion, making it slightly bigger than Puget Energy but smaller than Expedia.
On Thursday, its first day of trading, Clearwire stock fell 38 cents, or 1.52 percent, to close at $24.62.
The 57-year-old McCaw, the company's founder and chairman, is trying yet again to redefine how people communicate. In the early days, he was set on eliminating the cord to the phone; today it is seeking a mobile network that untethers Internet users.
With McCaw's businesses over the years, there's one obvious theme — they all required lots of money.
"The capital needs of a nationwide network is significant," said Sriram Viswanathan, general manager of Intel's WiMax Program and vice president of Intel Capital. "They [Clearwire] raised a big chunk from us and Motorola and the others. ... This now gives them another good bite of the apple, but they'll have to keep going on their financing plans to do the complete build-out."
In the past 30 years, McCaw has started numerous companies at great risk and reward. In 2000, his personal wealth was estimated at $7.7 billion, according to Forbes.
In the past year, it was estimated to be about $2.1 billion, based on Forbes' most recent list, released Thursday. His holdings in Clearwire are estimated at about $1 billion.
Overall, while some of his ventures have been successful, others have failed, sometimes spectacularly.
Here's a quick look at McCaw's track record:
• In the mid-1980s McCaw started to buy rights to the nation's airwaves to create the first nationwide cellphone network. The company, McCaw Cellular Communications, was sold to AT&T for $11.5 billion in 1994. AT&T Wireless went public in 2000 and still holds the U.S. record for raising the most money in an initial public offering — $10.6 billion.
• After the sale of McCaw Communications to AT&T, McCaw tried his hand at various other ventures. In 1994, he founded XO Communications, formerly Nextlink Communications. XO was among dozens of startups that sought to compete with established phone companies by offering phone and other services to businesses. McCaw ended up losing his personal stake in the company that at the peak was worth $3 billion to $4 billion.
He left XO's board three months before it filed for bankruptcy protection in 2002.
• In 1995, McCaw bought Nextel Communications, a mobile phone, dispatch and paging company, for $314 million, pledging to invest as much as $1.1 billion to help jumpstart a turnaround.
The company developed a cellphone with walkie-talkie functions, and carved out a niche selling it to businesses.
The company narrowly skirted bankruptcy, and posted its first profit in 2003. Sprint bought Nextel in 2005 for $35 billion.
• McCaw also developed an interest in satellites, starting Teledesic of Bellevue in 1993 with the help of Bill Gates.
The intent was to build a network of 840 low-orbit satellites that would provide global Internet access. But the venture had a difficult time getting traction. He bought ICO, which was also facing difficulties, in 1999 for $1.2 billion.
McCaw and Gates were able to raise money from a Saudi Arabian prince, Boeing and Motorola, which invested millions. But Teledesic folded in 2002.
Today, McCaw remains on the board of a renewed version of ICO. The company continues to develop phone and Internet access using satellites and is based in Reston, Va., with offices in Kirkland.
• McCaw helped start Nextel Partners, an affiliate of Nextel Communications that provided mobile-phone service in smaller markets and rural areas.
The company went public in 2000, raising $470 million.
After Sprint merged with Nextel Communications, the combined company acquired Nextel Partners last year for almost $9 billion.
Tricia Duryee: 206-464-3283 or email@example.com