The company has since moved to larger quarters, taking its used furniture along.
Many start-ups ended up in San Diego because of its identification with wireless communications technology.
Quorum, for example, is developing a semiconductor chip that can be used in cellphones to handle voice and data transmissions simultaneously. In the three years since its founding, it has grown to 30 employees and has attracted about $10.3 million in venture capital funding.
Several of its employees came out of UCSD, where there is a group of faculty members and students who specialize in the development of radio frequency integrated circuits, or RFICs, used in cellphones.
"There are maybe 1,000 designers in the world of RFIC chips," said Bernard Xavier, Quorum's CEO. "And I'd say that 40% of them are in the San Diego area."
Quorum is situated in a granite-and-glass building in an office park that is quite upscale compared with the Ceyx digs. But on a recent visit there was no art on the yellow walls of the office suite, and the furniture, though of better quality, was also recycled from failed companies.
"Everyone works 80 to 100 hours a week," said Lon Christensen, chief technical officer. "The motivation is stock options."
If the wireless sector plunges in a way that killed numerous Los Angeles-area tech start-ups when the Internet content business went soft, it would undoubtedly be a serious blow to San Diego. But the city has weathered past downturns because of its mix of biotech and information technology companies.
"They're both cyclical, but not on the same cycle," the San Diego Venture Group's Woolley said.
As much as things seem to be coming together for San Diego's high-tech community, it still lives in the shadow of Silicon Valley, which is recognized worldwide as the epicenter of digital life.
That's fine with Jordan Greenhall, co-founder of DivXNetworks Inc., a San Diego company that has raised about $20 million since it was founded in 2000.
"The big advantage of San Diego over the Silicon Valley is attitude," said Greenhall, whose company sells a video compression technology. "Up there it's a mercenary culture where everyone you hire is always looking out for the next opportunity, the next batch of options.
"Down here, people actually get passionate about a product. It's not surprising that this is a lot better place to start a company."