Bob Shallit: Chip maker gets boost in funding

KeyEye Communications has a fresh $16 million -- and a new CEO to help spend it.

The Sacramento startup has just completed a Series B funding round led by a group that includes Silicon Valley's Menlo Ventures and Sacramento-based American River Ventures.

New CEO Chuck Fox, 50, who came on board this month, says the cash will be used to quickly market KeyEye's communications chips -- designed to move data over standard copper wire at 10 gigabits per second. The company recently helped draft the worldwide industry standard for such products.

"Now, it's a bit of a race to see who can be first to market," says Fox, who's had executive roles at Intel, Xilinx, Cradle Technologies and, most recently, Chameleon Systems in the Bay Area.

Fox, who replaces outgoing CEO Harvey Scull, is confident his firm has a head start over its rivals, having produced similar chips that meet the 10-gig specs.

KeyEye and its competitors are using copper wire because it's much cheaper than fiber-optic cable. The downside is that it consumes far more energy, a worry for big data center operators.

Fox and company co-founder Mike McConnell think they have an answer to that problem. They're developing chips that require less energy because they move data a maximum of just 30 meters, instead of the current industry standard of 100 meters. The shorter distance is sufficient for most users, they say.

"The risk is that 30 meters needs to be embraced (by the industry)," Fox says. "But I'm very comfortable with that risk."

Joy of sax: It's been quite a year for CEO Chuck Hansen. His local software company received a $50 million infusion from a new partner, subsequently bought a Bay Area firm and is nearing closure on another acquisition.

But Hansen's personal highlight probably came last week at Hansen Information Technologies' annual client conference at Squaw Creek near Lake Tahoe.

Hansen hired rockers Huey Lewis and the News to entertain the 600 customers and employees at the company event. And joining the band on stage was Hansen, an accomplished saxophone player.

When he hired the News for the gig, Hansen asked if he could "drop in" with the band. Lewis' agent said "No way." It's never done.

But Lewis relented after remembering a meeting with Hansen in New York last year. And he remembered hearing -- and liking -- a CD of Hansen's local R&B dance band, Hip Service.

So not only did Hansen "drop in," he played three numbers -- "Back In Time," "Do You Believe In Love" and "Working for a Living" -- with his musical heroes. He even soloed on "Back in Time."

"It was unbelievable," Hansen says of the experience. Huey Lewis had nothing but praise for his short-term band member, telling the audience at one point: "This guy can play."

Condo mania: Developer Sotiris Kolokotronis is ready to go vertical with one midtown condo project and is eyeing a second, similar project in the same neighborhood.

With the foundation now completed, structural work begins this week on the L Street Lofts, a 92-unit, eight-story project at 1818 L St., across the street from the apartment complex he completed this past summer.

Following a kickoff event held Tuesday night, sales are under way. Prices range from the "high 300s" for the smallest units, Kolokotronis says, to $1.2 million for some penthouse suites.

A slowdown in housing sales doesn't worry the developer because he's convinced midtown will be the region's condo hot spot.

"It has all the amenities -- the restaurants, the galleries, everything is there," he says. It also has an established residential base, and "people want to be where other people are," he says.

He's so sold on the area he's just gone into escrow to acquire a property at 17th and I streets for another condo project that could include some retail shops.

Earlier this year the land drew interest from Denver condo builder Craig Nassi. When he opted not to close escrow, Kolokotronis jumped in.

"We're doing our due diligence on it," Sotiris says. Specific plans for the new site should be ready in a few weeks.