In reality, there were so many telecommunications start-ups that the supply far exceeded the demand.
Isaac Lasky, a 55-year-old consultant in Denver, said he was burned by a telecommunications start-up in December.
In 1995, he made a rare misstep — he quit CBS to become the C.E.O. of a telecommunications start-up that soon imploded.
Over the last two years, Forstmann Little, which is led by Theodore J. Forstmann, has invested $2.5 billion in two struggling telecommunications start-ups: XO Communications and McLeodUSA.
The Aguirre family, which controls Radio Centro, has been trying to sell its radio holdings for some time to concentrate on its telecommunications start-up, Maxcom.
After struggling for four years to expand, Mr. Salmasi merged his business with another small telecommunications start-up into a new venture that ultimately became Qualcomm.
The Newark-based IDT, which specializes in wholesale long-distance and prepaid calling cards, has been seeking distressed telecommunications start-ups.
"If you get in there, it's like getting a bachelor's degree in computer science plus five years of work experience," said one programmer who served in an electronics unit and now works at an Internet telecommunications start-up.
Michael Kleeman, a former consultant at the Boston Consulting Group who is a founder of a telecommunications start-up, said Iridium was blindsided by the rapid growth of ground-based competition.
Other investors, like Craig O. McCaw, who made his fortune in cellular phones but lost billions recently on two telecommunications start-ups, should perhaps have been able to see the market overcapacity.
Another company, MainStream PCS, postponed efforts to raise more than $1 billion in loans last week, according to bank loan investors, due in part to their wariness about putting money into telecommunications start-ups.
