IronBridge to throw in the towel?

(Telephony) No news is good news these days, it seems, especially when it comes to start-ups keeping their heads above the water. IronBridge Networks is the latest to falter and reportedly is expected to file for bankruptcy protection today.

If it files for Chapter 7 bankruptcy protection, the company would sell off its assets. IronBridge could not be reached for comment.

This news follows the Jan. 31 layoff of 90% of its employees--170 people--after the company’s expected $100 million in funding fell through.

Three-year-old IronBridge, which touted the virtual routing capabilities of its terabit router only a few months ago, is the latest in stream of equipment providers feeling the burn from venture capital squeamishness.

“They are definitely caught in the downturn in the market,” said Chris Nicoll, senior analyst for Current Analysis. “VCs are holding their investments to a much higher degree of scrutiny.”

Even Alcatel, part owner of IronBridge via its acquisition of Newbridge Networks, didn’t throw IronBridge a life preserver. Alcatel already has a number of IP router investments of its own, and IronBridge was something it simply inherited. The French supplier may have not made an investment in IronBridge on its own if given the chance, said Nicoll.

While IronBridge may have had a clear defining characteristic with its virtual routing capabilities and two strong customers--Energis and Qwest Communications--testing the platform, the company faced an uphill battle in convincing service providers that its router gave them a competitive advantage and didn’t complicate their networks, said Nicoll.