The story of Hansen Medical is a Silicon Valley cautionary tale repeated by various technology companies over the last few decades. Initial success and millions of dollars in venture capital funding often lead management to take shortcuts to maintain early momentum. When the plan works, no one ever sees the shortcuts. When the plan fails, legal issues overwhelm the business.

Everything went right for Mountain View, Calif.-based Hansen Medical early on. Frederic Moll split from Intuitive Surgical Inc., a surgical robotics company he founded, to start Hansen Medical in 2002. In 2005, Intuitive and Hansen cross-licensed their technology, allowing each company to apply the other’s patent portfolio. Intuitive also received royalties on future Hansen Medical product sales and equity in Hansen Medical. Hansen went public with an IPO in November 2006.

In May 2007, Hansen received clearance from the U.S. Food & Drug Administration (FDA) for commercialization of its sophisticated Sensei Robotic Catheter System and Artisan Control Catheter, which assist doctors to more precisely manipulate, position, and control cardiac ablation catheters. Luna Innovations Inc., maker of fiber-optic shape-sensing technology, became a partner in June 2007. Hansen stock peaked at $38.87 in October 2007, the result of initial sales and news of the Luna partnership.