The Art of Turning $25 Million Into $560 Million

The Syncom Venture Partners story.

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Since its founding, Syncom has invested in more than 150 companies with an aggregate market value of over $10 billion, some of which went public or were sold to major corporations. Along with its telecom portfolio, Syncom also invested in companies that brought cable television to black and Hispanic communities in Los Angeles, Chicago and the District of Columbia.

Jones says, “We look for the best deals, as opposed to operating based upon a social calling. We invest in companies that are minority-owned and operate in the minority or general market, and firms that are not minority-owned and do business in the ethnic marketplace. Sixty percent of our investments are with ethnically owned companies and 40 percent are not.”

When Syncom decided to buy Iridium, some observers thought its partners went crazy. But Wilkins saw a way to build a telecom link between people in rural areas and the outside world. Critics also didn’t have his vision of a global market for clients located on ships, planes, at the poles, mid-desert, or in businesses like FedEx that use Iridium to track vehicles.

But in 2000, impediments had to be hurdled before the Iridium purchase was made. The bursting of the dot-com bubble frightened most investors away from such a speculative tech buy, as well as the stigma of Iridium being the then-largest corporate bankruptcy in U.S. history. So Syncom put together a group that raised $25 million to buy the firm, and another $130 million in commitments to recapitalize the venture.

A more pressing threat also remained. When Iridium filed for Chapter 11 bankruptcy, one of Motorola’s main concerns was its potential and continuing liability from damages if Iridium satellites fell to earth.