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Intel Capital CEO Summit

Intel Capital CEO Summit. Arjun Gupta, CEO and Chief Believer TeleSoft Partners August 1, 2001. www.telesoftvc.com. AGENDA. Page. Next-Gen Communications Opportunities 2 Supply of Venture Capital 3 Private Market Pricing Dynamics 4 Public Market Pricing Dynamics 5

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Intel Capital CEO Summit

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  1. Intel Capital CEO Summit Arjun Gupta, CEO and Chief Believer TeleSoft Partners August 1, 2001 www.telesoftvc.com

  2. AGENDA Page • Next-Gen Communications Opportunities 2 • Supply of Venture Capital 3 • Private Market Pricing Dynamics 4 • Public Market Pricing Dynamics 5 • Macro Trends & Industry Structure 6 • Exits – Acquisitions vs. IPO’s 7 • Optical Value Chain – The Next Frontier 8

  3. TELESOFT KEY INVESTMENT SEGMENTS Optical layer I. Next-Gen Communications Opportunities

  4. SUPPLY OF VENTURE CAPITAL Source: Venture One II. Supply of Venture Capital

  5. TRENDS IN PRICING Stage PRE ‘98 ‘98-’99 ‘99-’00 L $400MM - $500M } 2-3x 1-2 Years MarketingDevelopment M $200MM - $300MM } ProductDevelopment 5-10x 6 Months E <$25MM - $35MM $200MM - $300MM $100MM 2-3x 1-2 Years 2-3x 1-2 Years DANGER $40MM - $60MM $100MM 2-3x 1-2 Years 4-5x 9 Months <$10MM - $20MM <$20MM - $25MM III. Private Market Pricing Dynamics

  6. PRICING EFFECTS • LBO’s • Buyout Firms $147MM = $50MM • TCV and ICP • “Crossover Funds” 1 = $950MM 2 $1BN • Morgan Stanley Study(From 1/1/80 – 3/31/96) • 801 Technology IPO’s • Average IPO was $147MM • Largest IPO was MSFT at $300MM Public Market$$$ • Dot.com IPO’s > $1BN $100MM Private VC Market $$$ Early Middle Late IV. Public Market Pricing Dynamics

  7. CUSTOMER AND SUPPLIER INDUSTRY STRUCTURES Personal Computing Fortune 100 Businesses Fortune 1000 Businesses Every Business Millions of Households Billions of Consumers Communications 200 PTT’s 500 – 1,000 Wireless + LD + Local 5,000 Carriers 10,000 Carriers (B/C/D – LEC’s) 1998-99Over Expansion Customer Industry Structure 2000-01 Retrenching North America Europe Japan Full-Service Lucent Cisco Nortel Alcatel Ericsson Siemens NEC Point Players ADC Ciena Motorola Tellabs Nokia Hitachi Toshiba Enterprise Applications SAP, Oracle Oracle Databases IBM Supplier Industry Structure Microsoft, Lotus Applications OperatingSystems Microsoft Intel Microprocessors V. Macro Trends & Industry Structure

  8. EXITS – ACQUISITIONS vs. IPO’s VI. Exits – Acquisitions vs. IPO’s

  9. TELESOFT’S OPTICAL PORTFOLIO Process & Materials Components Systems Carriers Modules & Sub-systems AmberWave Kymata Versatile Lynx-Photonic NP Photonic WIN OnFiber Catamaran Lara Networks ModeTek Novalux Calient VII. Optical Value Chain – The Next Frontier

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