Crescent Networks closes

Three months after it laid off two-thirds of its staff yet insisted it was not closing, edge router start-up Crescent Networks has indeed ceased operations.

The company, which was developing a so-called Dense Virtual Router for service providers, could not turn product trials into revenue generating sales in time to attract additional funding from investors, according to a former company spokesman who confirmed the closure. As a result, Crescent ran out of cash.

Calls to Crescent CEO Gerald Wesel’s office were not returned by press time.

Crescent is selling its intellectual property and has received interest in it from about 10 companies so far, according to a company source. The source declined to identify the companies.

Last October, Crescent laid off 40 of its 60 employees in order to conserve cash to support trials of its VRX-1000 router in Europe, Asia and the U.S.

Crescent raised $66 million since its founding in 1999. Wesel said last fall that Crescent was considering an attempt to raise another round of funding, and was also looking into a partnership with a major telecom vendor to take its VRX-1000 router to market.

Distribution partnerships with larger, established telecom equipment vendors, underscored by an investment, are common among start-ups in today’s downtrodden market, in which carriers have reduced their capital spending by almost 50% since 2000.