Transcript here - Doug Render: Marketing Professional::for hire

An iBelay Update
January 27, 2000
Agenda
•
•
•
•
iBelay
FastIdeas
Colorado
Market focus for
investing
• Investments Status
Venture
Accelerator
$100 M Fund
P2
P3
6 Month Execution
P4
P15
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
FastIdeas, Inc.
iBelay Partners, LLC
Pete Estler & John
Moinester
P1
Data center
Technical consulting
Recruiting
Finance/admin and legal
Physical real estate
Business planning and
strategy
Marketing communications
iBelay, LLC
•Fund of Limited Partners
Employees
FastIdeas, LLC
Pete Estler, Managing
Member
P2
P3
Cash Services Common Shares
Preferred Shares Non-Statutory Options
P4
P15
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
Deals Status
Deals done
• DataPlay
• Epidemic
Marketing
• NetLibrary
• Productbuzz
• Ereo
Deals pending
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•
•
•
•
FastIdeas
Grant Seekers
Contact Zone
Sub-Prime
Advantage
PEO
• RT/One
Target Deal Structures
Our Idea
70%
Their Idea
60%
Founder
0%
20%
CEO
15%
10%
Mgt/Emp*
15%
10%
iBelay
*Includes FastIdeas Portion
THE iBELAY
ACCELERATOR
Accelerator Business Model
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•
•
•
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
Accelerator Services
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•
•
•
•
•
•
•
Data center
Technical consulting
Recruiting
Finance/admin and legal
Physical real estate
Business planning and strategy
Marketing communications
Networking/Rolodex
Acceleration Process
6 month focus on four objectives
–prove the business model; rigorous
metrics
–1st Customer
–management team
write –scalable system
biz plan
1 mo. prove business model
$25 k
4-6 mo.
scale business
$1.5 M
3-12 mo.
$15+ M
IPO/
Exit
Accelerator Management
Pete Estler
CEO/President
Tom Ball
Data Center
TBD
Staffing
John Hickey
Operations
Larry Engle
Fin/Lgl/Adm
TBD
Marketing
Options Pool
5%
P1
5%
P2
5%
P3
5%
P4
5%
P15
COLORADO
“The Wild Wired West”
COLORADO:
The Wild Wired West
The nation’s leader in...
• job growth
• educational attainment
• economic vitality
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
COLORADO:
The Wild Wired West
Future forces...
• #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
COLORADO:
The Wild Wired West
Future forces…VC investment in formative
stage Internet ventures: Q1-3, 1999
Per Capita
0
5
10
15
20
25
30
CA
MA
CO
WA
TX
NY
NJ
PA
VA
FL
$58.1 M invested in 1st three Quarters of 1999
Colorado’s Anchor
Technology Companies
THE DIRECT MARKETING
OPPORTUNITY
DM &Brand Advertising: $370B in 2003
1999
Brand Advertising
Direct Marketing
2003
$107.9
$173.7
$148.5
$221.6
7.1%
CAGR
• iBelay will capitalize on shifts within DM
DM Break Out: $222B in 2003
Direct Mail
Telemarketing
Magazine
Internet
DR TV
Newspaper
Radio
Other
2003
$26.3
1999
$20
$66.2
$41.8
$84.5
$13.5
$0.75
$52.7
$21.7
$17
$5.5 $7.9 $11.5
• iBelay focuses on the Internet channel
$9
$6.1
6.2%
CAGR
$17.1
Online Advertising Media
Spending Trends
$9
$8
$7
$6
Jupiter
$5
Forrester
$4
Yankee
Group
$3
$2
$1
$0
1999
2000
2001
2002
• 51% CAGR over the next 3 years
Online Shift to DM: $5.5B in 2003
25%
65%
1999
2003
75%
64.3%
CAGR
35%
• DM share of Interactive advertising swells
from 25% in 1999 to 65% in 2003
Email the DM ‘Killer App’
Advertising
EBPP
1999
Ecommerce
CRM
$15 $3.7
$51
2004
$1,300
$255
$114
$16.8
$365
• Email poised to become the cornerstone of
multiple high-growth markets
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
OPPORTUNITIES RESULTING
FROM BROADBAND
Shift in Consumer Behavior
• Effects
– More Time Online
– Access from
Anywhere
– More Online
Spending
• Causes:
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–
–
–
Lower Cost
Availability
Ease of Installation
Consistency of
Promotion
•Consumers get What they want, When
they want , Where they want
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
Gigabits per Second
1,000,000
100,000
AT&T
Projection :
253% CAGR
10,000
1,000
DLJ Projection :
76% CAGR
100
1998
1999
2000
2001
Internet Network capacity doubles every 9 months
Internet Traffic doubles every 100 days
Source: Red Herring Feb. 2000
2002
2003
OPPORTUNITIES RESULTING
FROM THE SHIFT FROM PCs
TO INTERNET APPLIANCES
Information Explosion not Just
for PCs
Millions of Content Windows
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Includes Web pages and
cable and broadcast TV
channels
Source: McKinsey
e=estimated
CAGR 150%
1995
1996
1997
1998e
84.7% CAGR for Internet Appliances
1999e
2000e
2001e
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
Portable
PCs
37%
Smart
phones
56%
17.2 M
Wireless Data
Computing
Devices in
2000
Handheld
Devices
7%
134.3 M
Wireless Data
Computing
Devices in 2004
Portable
PCs
24%
Smart
phones
70%
2 Billion Short Messages per Month in Europe
Handheld
Devices
6%
Wireless Data Revenue
European Market Forecast by Application
services/e-commerce = $18 B
corporate extensions = $12 B
2003
Device Independence
Hardware:
Application:
cell phone
PDA
television
pager
radio
voice
management
video
e-mail
music
Home Networks
Penetration and Revenues
70
60
1,600
Networked Households
On-line Households
PC Households
Revenues from Home Networking
1,400
1,200
50
1,000
40
800
30
600
20
400
10
200
0
0
1999
2000
2001
2002
2003
Millions of $
Millions of US Households
80
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
Software
Wireless
operators
Wireless data
Content
iBelay’s Focus
Equip.
and devices
Wireless Data Environment
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 ecommerce
CAPITALIZING ON BUSINESS
TO BUSINESS (B2B)
COMMERCE SHIFTING FROM
OFF-LINE TO ON-LINE
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
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•
•
•
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Attracts new customers
Reinforces customer relationships
Improves sales channels
Improves post-sale services
Removes inefficient distribution
Trends
Trends
E-commerce Breakout (B $)
1400
1200
1000
800
600
400
200
0
B2C
B2B
1998 1999 2000 2001 2002 2003
8
43
18
109
33
251
52
499
76
843
108
1331
STATUS
Deals Done
•DataPlay
•Epidemic Marketing
•NetLibrary
•Productbuzz
•Ereo
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
Deal Structure
• Deal
Business Concept
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•
•
•
•
Viral Email Marketing
Email That Pays
True One-to-One Marketing
B-to-C Affiliate Model
Launched in November
Deal Structure
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Founders
Sequel VP
World VP
Option Pool
Other
Shares
5,350,000
3,501,406
1,250,000
3,000,000
291,867
Ownership
39.95%
26.14%
9.33%
22.40%
2.18%
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
Business Concept
• Become the Internet’s largest and most
robust provider of product informationfocused 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 Structure
• Series A Convertible Preferred
• Funding Sought $10 to $12 million
• max. $4 million Co-Investment by Current
Sareholders (pari passu)
Ereo? - No info
STATUS
Pending Deals
•FastIdeas
•Grant Seekers
•Contact Zone
•Sub-Prime
•Advantage PEO
•RT/One