An iBelay Update

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An iBelay Update

• January 27, 2000

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Agenda

• iBelay
• FastIdeas
• Colorado
• Market focus for investing
• Investments Status

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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

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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 Shares Preferred Shares
Non-Statutory Options
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Status of Funding

• Closed on 45 M - Dec. 6th
• 2nd Closing Scheduled 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

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Deals Status

• Deals done
• DataPlay
• Epidemic Marketing
• NetLibrary
• Productbuzz
• Ereo

• Deals pending
• FastIdeas
• Grant Seekers
• Contact Zone
• Sub-Prime
• Advantage PEO
• RT/One

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Target Deal Structures
Includes FastIdeas Portion
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THE iBELAY ACCELERATOR
FastIdeas
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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

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FastIdeas
Accelerator Services

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

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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
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Accelerator Management
FastIdeas
Options Pool
5
5
5
5
5
P1
P2
P3
P4
P15
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COLORADOThe Wild Wired West
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COLORADO The Wild Wired West
The nations leader in...

• job growth
• educational attainment
• economic vitality

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COLORADO The Wild Wired West
A wired work force...

• 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

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COLORADO The Wild Wired West
Future forces...

• 3 domestic relocation destination
• Governors 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

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COLORADO The Wild Wired West
Future forcesVC investment in formative stage
Internet ventures Q1-3, 1999
58.1 M invested in 1st three Quarters of 1999
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Colorados Anchor Technology Companies
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THE DIRECT MARKETING OPPORTUNITY
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DM Brand Advertising 370B in 2003
7.1 CAGR

• iBelay will capitalize on shifts within DM

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DM Break Out 222B in 2003
6.2 CAGR

• iBelay focuses on the Internet channel

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Online Advertising Media Spending Trends

• 51 CAGR over the next 3 years

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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

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Email the DM Killer App

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

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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

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OPPORTUNITIES RESULTING FROM BROADBAND
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Shift in Consumer Behavior

• Effects
• More Time Online
• Access from Anywhere
• More Online Spending

• Causes
• Lower Cost
• Availability
• Ease of Installation
• Consistency of Promotion

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

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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

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Bandwidth Demand Projections
Internet Network capacity doubles every 9
months Internet Traffic doubles every 100
days Source Red Herring Feb. 2000
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OPPORTUNITIES RESULTING FROM THE SHIFT FROM PCs
TO INTERNET APPLIANCES
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Information Explosion not Just for PCs
84.7 CAGR for Internet Appliances
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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
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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
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Wireless Data Revenue
European Market Forecast by Application
2003
services/e-commerce 18 B corporate extensions
12 B
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Device Independence

• Hardware
• cell phone
• PDA
• television
• pager
• radio

Application voice management video e-mail music
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Home NetworksPenetration and Revenues
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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

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Wireless Data Environment
iBelays Focus
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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

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

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Reasons for Shift

• Attracts new customers
• Reinforces customer relationships
• Improves sales channels
• Improves post-sale services
• Removes inefficient distribution

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Trends
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Trends
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Share of Total E-Commerce
7.8 B
1998
108 B
43 B
2003
1.33 T
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E-commerce Breakout (B )
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STATUS

• Deals Done
• DataPlay
• Epidemic Marketing
• NetLibrary
• Productbuzz
• Ereo

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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

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Deal Structure

• Deal

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Business Concept

• Viral Email Marketing
• Email That Pays
• True One-to-One Marketing
• B-to-C Affiliate Model
• Launched in November

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Deal Structure

• Shares Ownership
• 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

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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

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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

• iBelays Investment
• Series D
• 5 M
• x,xxx,xxx Preferred Shares
• Y.Y diluted ownership

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Business Concept

• Become the Internets 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

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Deal Structure

• Series A Convertible Preferred
• Funding Sought 10 to 12 million
• max. 4 million Co-Investment by Current
  Sareholders (pari passu)

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Ereo? - No info
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STATUS

• Pending Deals
• FastIdeas
• Grant Seekers
• Contact Zone
• Sub-Prime
• Advantage PEO
• RT/One

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