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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


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


FastIdeas

Accelerator Services

  • Data center

  • Technical consulting

  • Recruiting

  • Finance/admin and legal

  • Physical real estate

  • Business planning and strategy

  • Marketing communications

  • Networking/Rolodex


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...


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...


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



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 APPLIANCES

84.7% CAGR for Internet Appliances


Market shifts away from pcs
Market Shifts away from PCs APPLIANCES

  • 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 APPLIANCES

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 APPLIANCES

European Market Forecast by Application

2003

services/e-commerce = $18 B

corporate extensions = $12 B


Device independence
Device Independence APPLIANCES

Hardware:

cell phone

PDA

television

pager

radio

Application:

voice

management

video

e-mail

music


Home networks penetration and revenues
Home Networks APPLIANCESPenetration and Revenues


Why one market segment
Why One Market Segment? APPLIANCES

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 APPLIANCES

Equip.

and devices

Wireless

operators

Wireless data

Content

Wireless Data Environment

iBelay’s Focus


Opportunities conclusion
Opportunities/Conclusion APPLIANCES

  • 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 FROM OFF-LINE TO ON-LINE

  • 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 FROM OFF-LINE TO ON-LINE

  • Attracts new customers

  • Reinforces customer relationships

  • Improves sales channels

  • Improves post-sale services

  • Removes inefficient distribution


Trends
Trends FROM OFF-LINE TO ON-LINE


Trends1
Trends FROM OFF-LINE TO ON-LINE


E commerce breakout b
E-commerce Breakout (B $) FROM OFF-LINE TO ON-LINE


Status

STATUS FROM OFF-LINE TO ON-LINE

Deals Done

DataPlay

Epidemic Marketing

NetLibrary

Productbuzz

Ereo


Business concept
Business Concept FROM OFF-LINE TO ON-LINE

  • 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 FROM OFF-LINE TO ON-LINE

  • Deal


Business concept1
Business Concept FROM OFF-LINE TO ON-LINE

  • Viral Email Marketing

  • Email That Pays

  • True One-to-One Marketing

  • B-to-C Affiliate Model

  • Launched in November


Deal structure1
Deal Structure FROM OFF-LINE TO ON-LINE

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 FROM OFF-LINE TO ON-LINE

  • 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 FROM OFF-LINE TO ON-LINE

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 FROM OFF-LINE TO ON-LINE

  • 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 FROM OFF-LINE TO ON-LINE

  • 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 FROM OFF-LINE TO ON-LINE


Status1

STATUS FROM OFF-LINE TO ON-LINE

Pending Deals

FastIdeas

Grant Seekers

Contact Zone

Sub-Prime

Advantage PEO

RT/One


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