11-2
       Exhibit 11-1:  Venture Capital — 
       Market Size, 1995-2001
             120                                                9000
                     Amount invested                            8000
             100     Number of deals
                                                                7000
             80                                                 6000
                                                                5000
             60
                                                                4000
             40                                                 3000
                                                                2000
             20
                                                                1000
              0                                                 0
                 1995   1996   1997   1998   1999  2000   2001
 Source:  Data from PricewaterhouseCoopers, MoneyTree Survey:  Full Year & Q4 2001 Results:  US Report.
                                                            
                                                                11-3
       Defining a Startup
         A startup is a business that is in the process of 
            developing the underlying infrastructure needed to 
            support future growth
         A startup is a business engaging in the the 
            following three basic processes:
              – Developing and refining the offering and strategy to go 
                to market
              – Obtaining initial funding to begin operations
              – Building a capable management team to handle 
                operations 
                                                        
                                                                                                                                                                 11-4
                 Exhibit 11-2:  Startup Business
                  Investment Stages
                                       Early Stage                                                Expansion Stage                                       Later Stage
   Financing                                                                                             Second-
                                                                                                         Second-
                                                                                                         Second-
                           Seed Stage                  Startup                First-Stage                 Second-               Mezzanine                   Bridge
                            Seed Stage                 Startup                First-Stage                                       Mezzanine                   Bridge
                            Seed Stage                  Startup                First-Stage                                       Mezzanine                   Bridge
      Stages                Seed Stage                  Startup                First-Stage                Stage                  Mezzanine                   Bridge
                                                                                                           Stage
                                                                                                           Stage
                                                                                                           Stage
                       – Validate the             Build                    Expand                 Provide working         Fuel substantial          Prepare for 
                          business concept          management                production,              capital once            growth (typically          initial public 
   Investment             (e.g. build               team and                  marketing, or            shipping products       provided to                offering, 
   Investment
    Investment
    Investment            prototype,                complete                  sales                    or providing            business that              usually 
      Purpose
      Purpose             develop business 
      Purpose
       Purpose                                      product                   capabilities             services                are at least               planned in the 
                          plan, conduct             development                                                                break even)                next 6 months 
                          market research)
                                                                                                                                                          to a year
                         Angel investors         Angel investors            Traditional VC         Traditional VC         Traditional VC          Traditional VC 
                         Traditional VC          Traditional VC             Corporations           Corporations           Corporations            Corporations
      Type of                                                                                                                                       
      Type of              Consulting firms         Consulting firms                                                             Buyout firms            Buyout firms
       Type of
       Type of
    Investors            Online VC firms         Incubators                                                                 Investment banks        Investment 
     Investors
     Investors
     Investors
                         Incubators                                                                                                                     banks
      Source:  Gold Book of Venture Capital Firms, Bob Zider, 
                     “How Venture Capital Works,” Harvard Business Review                                                                 
                                                               11-5
       Relationship between Human 
       and Financial Capital
       Human and financial capital resources can 
          influence the business planning process and, 
          in turn, be influenced by the business plan
           – Human capital resources may include 
             entrepreneurs, management team, strategic 
             advisors and partners, and logistical advisors and 
             partners
           – Sources for financial capital include debt financing 
             and equity financing
                                                       
                                                                                                             11-6
           Exhibit 11-3:  The Relationship Between 
             Human Capital                                                    Financial Capital
           Human and Financial Capital
           Entrepreneur                                                            Equity
            Entrepreneur
                                                                               Bootstrapping
                                                                               Bootstrapping
                                                                       Angels             Venture Capital
         Management Team                                                Angels            Venture Capital
         Management Team
                                         Business 
                                          Business 
                                          Planning               Corporate Ventures      Holding Company
                                          Planning                Corporate Ventures     Holding Company
                                          Process
                                           Process
         Strategic Advisors 
         Strategic Advisors 
             & Partners
             & Partners
                                                                                    Debt
                                                                                         Commercial Bank 
                                                                     Trade Credit        Commercial Bank 
        Logistical Advisors                                          Trade Credit             Loans
         Logistical Advisors                                                                   Loans
            & Partners
             & Partners