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Wireless networking co., Aruba, steps on it

aruba.jpgAruba Networks, the Sunnyvale company that provides corporate wireless networks, has raised $25 million more from its venture backers.

VentureWire has a story (sub required) that mentions this market has been hot since January, when Aruba competitor's Airespace agreed to be acquired by Cisco Systems for $450 million. At the time, VentureWire correctly points out, Aruba had claimed it had rebuffed an acquisition overture from Cisco on the grounds it could give its investors a bigger return.

So now, Aruba is taking even more money, saying it needs the cash to build out sales and marketing even faster. That means, of course, it will need to perform even better to produce those promised returns to investors. Who knows. They are either not doing as well as expected, or they are...

as supremely confident as ever. We'll assume the latter is true, given market growth. Question, though: Why not take cheaper financing, via loans from all those eager financiers, so as not to water down value of existing shareholders, including employees at company? (We'll ask them, and report back.)

Two years ago, we checked in with Doug Leone, the venture capitalist with Sequoia Capital, and backer of Aruba. Aruba had only been launched the previous year. ''Business is booming" he told us at the time. He said the company had so far hired carefully, in step with market demand, but that the company might have to hire more aggressively to keep up: ''The question is, how hard do we want to hit the pedal?''

Well, the answer is, apparently, pretty hard.


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