In 1996 two senior managers at Newbridge Networks, a large public company, believed that telecom service providers throughout the world required much more advanced tools to facilitate access (by their subscribers) to their networks. The two founders gained the support of senior management at Newbridge Networks. In 1997, they spun out a new company – Bridgewater Systems. We helped in the creation of the initial business plan, in the early financing and the support of the business during its fledgling period.

Bridgewater successfully created products aimed at improving what is referred to as Triple A: access, authorization and accounting. Aliant Communications became the first customer in 1998, followed shortly thereafter by other wireline wins with GTE, Qwest and Covad. We became an investor in Bridgewater in 1999 when the Company completed its first institutional round.

Bridgewater revenues doubled year-over-year from 1998 to 2001. In addition, the Company secured its first wireless customers – Verizon Wireless and Bell Mobility in Canada. We seemed poised for sustainable growth.

By 2001 however, the party was over. Telecom service providers clamped down hard on capex spending. Bridgewater growth slowed. We actively engaged with management to steer through the rough waters. The shift in strategy was simple in retrospect: focus on the wireless service providers as the key target market at the expense of wireline service providers who were the hardest hit by the general downturn. We also took an active role in recruiting a new experienced CEO to take Bridgewater to the next level.

Bridgewater was able to re-establish revenue growth in the latter