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An iBelay Update

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

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  1. An iBelay Update January 27, 2000

  2. Agenda • iBelay • FastIdeas • Colorado • Market focus for investing • Investments Status

  3. Venture Accelerator $100 M Fund 6 Month Execution P2 P3 P4 P15

  4. 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

  5. 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

  6. 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

  7. Deals done DataPlay Epidemic Marketing NetLibrary Productbuzz Ereo Deals pending FastIdeas Grant Seekers Contact Zone Sub-Prime Advantage PEO RT/One Deals Status

  8. Target Deal Structures *Includes FastIdeas Portion

  9. THE iBELAY ACCELERATOR FastIdeas

  10. 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

  11. FastIdeas Accelerator Services • Data center • Technical consulting • Recruiting • Finance/admin and legal • Physical real estate • Business planning and strategy • Marketing communications • Networking/Rolodex

  12. 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

  13. Accelerator Management FastIdeas Options Pool 5% 5% 5% 5% 5% P1 P2 P3 P4 P15

  14. COLORADO“The Wild Wired West”

  15. COLORADO: The Wild Wired West • job growth • educational attainment • economic vitality The nation’s leader in...

  16. 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...

  17. 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...

  18. 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

  19. Colorado’s Anchor Technology Companies

  20. THE DIRECT MARKETING OPPORTUNITY

  21. DM &Brand Advertising: $370B in 2003 7.1% CAGR • iBelay will capitalize on shifts within DM

  22. DM Break Out: $222B in 2003 6.2% CAGR • iBelay focuses on the Internet channel

  23. Online Advertising Media Spending Trends • 51% CAGR over the next 3 years

  24. 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

  25. Email the DM ‘Killer App’ • Email poised to become the cornerstone of multiple high-growth markets

  26. 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

  27. OPPORTUNITIES RESULTING FROM BROADBAND

  28. 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

  29. 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

  30. Bandwidth Demand Projections • Internet Network capacity doubles every 9 months • Internet Traffic doubles every 100 days • Source: Red Herring Feb. 2000

  31. OPPORTUNITIES RESULTING FROM THE SHIFT FROM PCs TO INTERNET APPLIANCES

  32. Information Explosion not Just for PCs 84.7% CAGR for Internet Appliances

  33. 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

  34. 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

  35. Wireless Data Revenue European Market Forecast by Application 2003 services/e-commerce = $18 B corporate extensions = $12 B

  36. Device Independence Hardware: cell phone PDA television pager radio Application: voice management video e-mail music

  37. Home NetworksPenetration and Revenues

  38. 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

  39. Software Equip. and devices Wireless operators Wireless data Content Wireless Data Environment iBelay’s Focus

  40. 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

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

  42. 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%.

  43. Reasons for Shift • Attracts new customers • Reinforces customer relationships • Improves sales channels • Improves post-sale services • Removes inefficient distribution

  44. Trends

  45. Trends

  46. E-commerce Breakout (B $)

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