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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
slide3

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

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

slide11

FastIdeas

Accelerator Services

  • Data center
  • Technical consulting
  • Recruiting
  • Finance/admin and legal
  • Physical real estate
  • Business planning and strategy
  • Marketing communications
  • Networking/Rolodex
slide12

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 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...

slide17

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...

slide18

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

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
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
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

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
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
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
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

  • Founders 5,350,000 39.95%
  • Sequel VP 3,501,406 26.14%
  • World VP 1,250,000 9.33%
  • Option Pool 3,000,000 22.40%
  • 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)
status1

STATUS

Pending Deals

FastIdeas

Grant Seekers

Contact Zone

Sub-Prime

Advantage PEO

RT/One

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