TeraBeam exec steps down, sells big stake

The founder and chairman of TeraBeam Networks, a start-up developing "fiberless" optics to handle high-speed Internet access, stepped down from his post yesterday and sold a portion of his stake in the company.

Greg Amadon will be replaced by TeraBeam's president and chief executive, Dan Hesse, whose departure in March from his position as chief of AT&T Wireless Services helped Seattle-based TeraBeam gain notice.

Amadon will also leave TeraBeam's board of directors, but will have a designated appointee on the eight-member board.

Amadon said he sold about half his TeraBeam stake to Softbank Venture Capital for about $100 million. He now holds slightly more than a 16 percent interest in the company, making him still the biggest individual shareholder.

With its added holdings, Softbank now owns about 25 percent, making it the largest institutional shareholder, Amadon said. The noted Japanventure-capital company already had invested $26.5 million in TeraBeam.

Amadon, who founded the company in 1997, said he stepped down to let "professional management" take the company from its research-and-development phase to commercial rollout of its product. The company plans to sell satellitelike equipment that will receive an optical beam broadcast from TeraBeam, providing customers with broadband Internet access.

The company, which has about 400 employees, has no paying customers.

"There are lots of way to slice and dice what might have happened," Amadon said. "Softbank has a set of resources it can bear to the company."

Softbank is just one of a number of well-known investors in TeraBeam. Others are Madrona Investments, Merrill Lynch and Morgan Stanley Dean Witter. Such a roster helped TeraBeam, which has about $576 million in cash, become arguably the most well-funded private technology company in the Seattle area.

Recently, it formed a new division, TeraBeam Internet Systems, 30 percent of which is owned by Lucent Technologies.

Amadon said he will take his wife "on a nice long trip somewhere," but will return to serve on the board of several start-ups, including locally based X10 Wireless Technology. With three other start-ups under his belt, Amadon said he will likely start other technology companies once he returns.

The former CBS News photojournalist founded Cellular Techical Services, which has sold shares to the public, Portable Cellular Communications and Virtual IO.