The Art of Turning $25 Million Into $560 Million

The Syncom Venture Partners story.

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How did a completely bankrupt satellite communications company—that now provides data and voice services to customers worldwide, including relief agencies in earthquake-torn Haiti—become a powerhouse with a market value of $560 million?

Syncom Venture Partners came to its rescue, and set a better course. The easy part occurred when the Maryland venture capital firm, which specializes in assisting media and communications companies and made initial investments in BET, XM Satellite and Radio One, paid Motorola, Inc. $25 million for Iridium Satellite, Inc. A few years earlier, Motorola’s total investment in the satellite company was valued at about $6 billion.

Iridium was a steal, for a reason. From the mid-1980s until 1999, Motorola created Iridium’s network of 66 orbiting satellites, satellite phones and a string of terrestrial stations to service business travelers. But technology keeps advancing, and by 1999 when Iridium’s satellites were all launched, few wanted brick-sized phones that charged up to $10 a minute, as cheaper cell phones were available. By contrast, the 2010 Iridium 9555 satellite phone is about half the size, costs about $1,000, and charges around $1 a minute.

In 1978, Syncom founder and adviser, Herbert Wilkins Sr., above left, and founder and managing general partner, Terry Jones, above right, joined forces in a newly formed venture capital fund with a commitment to “making early to mid-stage investments in underserved segments of the media and communications industry.”

That focus exemplifies the firm’s approach. Before joining Syncom, Jones earned a bachelor’s degree in electrical engineering, a master’s degree in computer science and biomedical engineering, and an MBA, from respectively Trinity College, George Washington University and Harvard University. Wilkins, Syncom’s first president and CEO, is no longer active with the firm but remains an adviser. He was a venture capitalist before co-founding Syncom, and earned an undergrad degree from Boston University and a Harvard MBA.