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An iBelay Update. January 27, 2000. Agenda. iBelay FastIdeas Colorado Market focus for investing Investments Status. Venture Accelerator. $100 M Fund. 6 Month Execution. P2. P3. P4. P15. iBelay Strategy. 15 portfolio companies in 2000 Position as public operating company

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An ibelay update

An iBelay Update

January 27, 2000


Agenda

Agenda

  • iBelay

  • FastIdeas

  • Colorado

  • Market focus for investing

  • Investments Status


An ibelay update

Venture Accelerator

$100 M Fund

6 Month Execution

P2

P3

P4

P15


Ibelay strategy

iBelay Strategy

  • 15 portfolio companies in 2000

  • Position as public operating company

  • 10 of 15 companies will fit the operating model

  • 2 liquidity events in 2000

  • Position for exit by Q4 2000

    • IPO of operating company

    • sell to ICG, CMGI, Safeguard

    • long term hold


Structure

P2

P3

P4

P15

Structure

iBelay Partners, LLC

Pete Estler & John Moinester

FastIdeas, Inc.

Data center

Technical consulting

Recruiting

Finance/admin and legal

Physical real estate

Business planning and strategy

Marketing communications

P1

  • iBelay, LLC

  • Fund of Limited Partners

Employees

  • FastIdeas, LLC

    • Pete Estler, Managing Member

Cash Services Common SharesPreferred SharesNon-Statutory Options


Status of funding

Status of Funding

  • Closed on $45 M - Dec. 6th

  • 2nd ClosingScheduled Feb. 16th

  • $55 M Targeted for 2nd Round

    • Shaw Comm. = $10 M

    • Shaw Family = $5 M

    • Tango = $??

    • Barnard = $50 M

  • Possible Debt Financing for 2nd Round Deals

  • Re-Investment Strategy


Deals status

Deals done

DataPlay

Epidemic Marketing

NetLibrary

Productbuzz

Ereo

Deals pending

FastIdeas

Grant Seekers

Contact Zone

Sub-Prime

Advantage PEO

RT/One

Deals Status


Target deal structures

Target Deal Structures

*Includes FastIdeas Portion


The ibelay accelerator

THE iBELAY ACCELERATOR

FastIdeas


Accelerator business model

Accelerator Business Model

FastIdeas

  • Funded and 100% owned by iBelay

  • $2M invested

  • Break even on services delivered

  • Focus

    • support execution of 6 month acceleration plan

    • success= 1st round funding within 6 months

      = company stands on its own


An ibelay update

FastIdeas

Accelerator Services

  • Data center

  • Technical consulting

  • Recruiting

  • Finance/admin and legal

  • Physical real estate

  • Business planning and strategy

  • Marketing communications

  • Networking/Rolodex


An ibelay update

FastIdeas

Acceleration Process

6 month focus on four objectives

  • prove the business model; rigorous metrics

  • 1st Customer

  • management team

  • scalable system

write

biz plan

1 mo.

$25 k

prove business model

4-6 mo.

$1.5 M

IPO/Exit

scale business

3-12 mo.

$15+ M


Accelerator management

Accelerator Management

FastIdeas

Options Pool

5%

5%

5%

5%

5%

P1

P2

P3

P4

P15


Colorado the wild wired west

COLORADO“The Wild Wired West”


Colorado the wild wired west1

COLORADO: The Wild Wired West

  • job growth

  • educational attainment

  • economic vitality

The nation’s leader in...


Colorado the wild wired west2

COLORADO: The Wild Wired West

  • 2nd highest concentration of hi-tech workers

  • 2nd highest percentage of population online

  • 3rd highest percentage of PC households

  • 3rd highest percentage of Web-enabled businesses

A wired work force...


An ibelay update

COLORADO: The Wild Wired West

  • #3 domestic relocation destination

  • Governor’s Commission on Science and Technology

  • Colorado Institute of Technology

    • $250M initiative to build the “MIT of the West”

  • Reasonable cost of living

    • Denver: 90% San Francisco, 67% Boston

    • Boulder: 68% Menlo Park, 84% Cambridge

Future forces...


An ibelay update

COLORADO: The Wild Wired West

Future forces…VC investment in formative stage Internet ventures: Q1-3, 1999

$58.1 M invested in 1st three Quarters of 1999


Colorado s anchor technology companies

Colorado’s Anchor Technology Companies


The direct marketing opportunity

THE DIRECT MARKETING OPPORTUNITY


Dm brand advertising 370b in 2003

DM &Brand Advertising: $370B in 2003

7.1% CAGR

  • iBelay will capitalize on shifts within DM


Dm break out 222b in 2003

DM Break Out: $222B in 2003

6.2% CAGR

  • iBelay focuses on the Internet channel


Online advertising media spending trends

Online Advertising Media Spending Trends

  • 51% CAGR over the next 3 years


Online shift to dm 5 5b in 2003

Online Shift to DM: $5.5B in 2003

64.3% CAGR

  • DM share of Interactive advertising swells from 25% in 1999 to 65% in 2003


Email the dm killer app

Email the DM ‘Killer App’

  • Email poised to become the cornerstone of multiple high-growth markets


Email trends

Email Trends

  • The most widely used Internet application

  • 99M Americans sent 335M emails daily in ‘99

    • number of boxes will double within 3 years

    • daily volume will quadruple

  • Distinction between email messaging, marketing and customer service blurring


Opportunities resulting from broadband

OPPORTUNITIES RESULTING FROM BROADBAND


Shift in consumer behavior

Effects

More Time Online

Access from Anywhere

More Online Spending

Causes:

Lower Cost

Availability

Ease of Installation

Consistency of Promotion

Shift in Consumer Behavior

  • Consumers get What they want, When they want , Where they want


Why broadband

Why Broadband?

  • Today vs. Tomorrow

    • Which would you choose?

  • 56.6kbps vs. 36mbps Connections

  • Dial-up vs. Always on

  • Text based vs. Rich, Interactive Content

  • Expensive vs. Cheap Broadband Access

  • Lines at the Mall vs. e-Commerce Anywhere


Bandwidth demand projections

Bandwidth Demand Projections

  • Internet Network capacity doubles every 9 months

  • Internet Traffic doubles every 100 days

    • Source: Red Herring Feb. 2000


Opportunities resulting from the shift from pcs to internet appliances

OPPORTUNITIES RESULTING FROM THE SHIFT FROM PCs TO INTERNET APPLIANCES


Information explosion not just for pcs

Information Explosion not Just for PCs

84.7% CAGR for Internet Appliances


Market shifts away from pcs

Market Shifts away from PCs

  • Mobility revolution

    • more mobile devices than PCs connected in 2003

    • 1Billion handsets by 2003

    • 51% growth in Personal Companions

  • Device independence

    • browser access to data and applications

  • Home networks

    • 10 M U.S. homes will be digitally remodeled by ‘02

$35 B Wireless Data Rev. in Europe by 2003


Wireless internet access

Wireless Internet Access

134.3 M Wireless Data Computing Devices in 2004

17.2 M Wireless Data Computing Devices in 2000

2 Billion Short Messages per Month in Europe


Wireless data revenue

Wireless Data Revenue

European Market Forecast by Application

2003

services/e-commerce = $18 B

corporate extensions = $12 B


Device independence

Device Independence

Hardware:

cell phone

PDA

television

pager

radio

Application:

voice

management

video

e-mail

music


Home networks penetration and revenues

Home NetworksPenetration and Revenues


Why one market segment

Why One Market Segment?

Convergence of course

  • Phones were used for talking

  • Pagers were used for paging

  • PDAs were used for information

    Shift to application centric - platform independence

  • Phone, pager, PDA - just a device to run applications that

    • carry voice, message, store information


Wireless data environment

Software

Equip.

and devices

Wireless

operators

Wireless data

Content

Wireless Data Environment

iBelay’s Focus


Opportunities conclusion

Opportunities/Conclusion

  • Applications that take advantage of information explosion served to all Internet/Information Appliances

  • Applications that take advantage of mobile platforms/carrier technologies/protocols

  • Sharpest focus on intersection with direct marketing, broadband, and e-commerce


Capitalizing on business to business b2b commerce shifting from off line to on line

CAPITALIZING ON BUSINESS TO BUSINESS (B2B) COMMERCE SHIFTING FROM OFF-LINE TO ON-LINE


B2b market space

B2B Market Space

  • 1/4 of all B to B purchases made online by 2003

  • Software spending to support B2B commerce

    • $1.65B in 1999

    • $22.5B in 2004

  • $43 B online trade of hard goods in 1998, will surge to $1.3 T by 2003

    • an annual growth rate of 99%.


Reasons for shift

Reasons for Shift

  • Attracts new customers

  • Reinforces customer relationships

  • Improves sales channels

  • Improves post-sale services

  • Removes inefficient distribution


Trends

Trends


Trends1

Trends


E commerce breakout b

E-commerce Breakout (B $)


Status

STATUS

Deals Done

DataPlay

Epidemic Marketing

NetLibrary

Productbuzz

Ereo


Business concept

Business Concept

  • Web enabled digital content distribution media and storage device for portable information appliances and hand-held consumer entertainment devices

  • Drive and Media will be about the size of a match book


Deal structure

Deal Structure

  • Deal


Business concept1

Business Concept

  • Viral Email Marketing

  • Email That Pays

  • True One-to-One Marketing

  • B-to-C Affiliate Model

  • Launched in November


Deal structure1

Deal Structure

SharesOwnership

  • Founders5,350,00039.95%

  • SequelVP3,501,40626.14%

  • World VP1,250,000 9.33%

  • Option Pool3,000,00022.40%

  • Other 291,867 2.18%


Business concept2

Business Concept

  • E-books for institutions and individuals

  • $32 B U.S. and $100 B non-U.S. English publishing market

  • Targeting 50 Million U.S. Library patrons

  • Launched product in mid ‘99

  • iBelay can help create Internet and data industry partnerships


Funding summary

Funding History

Series A 8/98

$5 M

Series B 5/99

$25 M

Series C 10/99

$72 M

Series D 1/00

$15-20 M

iBelay’s Investment

Series D

$5 M

x,xxx,xxx Preferred Shares

Y.Y% diluted ownership

Funding Summary


Business concept3

Business Concept

  • Become the Internet’s largest and most robust provider of product information-focused business communities.

  • Our content aggregation and ecommerce referral strategy uniquely positions us to become the leading infomediary in the emerging $1.5 trillion online B2B ecommerce market


Deal structure2

Deal Structure

  • Series A Convertible Preferred

  • Funding Sought$10 to $12 million

  • max. $4 million Co-Investment by Current Sareholders (pari passu)


Ereo no info

Ereo? - No info


Status1

STATUS

Pending Deals

FastIdeas

Grant Seekers

Contact Zone

Sub-Prime

Advantage PEO

RT/One


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