10 5 01 kaf pres

It's A Great Time to Start A Technology Company: 

It's A Great Time to Start A Technology Company Kevin Fong Managing Partner October 7, 2001

The View from Silicon Valley: 

The View from Silicon Valley Finally…we all have time to think again! Lots of money to fund good ideas $26 Billion VC funds raised in first half of 2001 $45 Billion VC funds predicted to be raised in 2001 2,400 companies financed through Q'3 2001 Great management talent available Innovation continues! What’s Good...

The View from Silicon Valley: 

The View from Silicon Valley Lack of business confidence September 11th aftermath affecting the economy Tech companies reducing forecasts by 20-50% Layoffs continue IPO and debt market remain shut; M&A activity is weak What's Not So Good…

Setting the Context: 

Setting the Context

Setting the Context: 

Setting the Context

Downcycles Produce Great Companies: 

Downcycles Produce Great Companies NASDAQ

A Closer Look: The PC Industry (1980-1990): 

Index 12/31/80 = 100 Market Cap ($ MM) A Closer Look: The PC Industry (1980-1990) Long term PC Market Statistics $800B of market cap created since 1985 50% year-over-year market cap growth since 1985 20%+ year-over-year revenue growth since 1985

A Closer Look: The Internet Boom (1996-2000) : 

A Closer Look: The Internet Boom (1996-2000) Numerous innovative technology markets over-funded Booming IPO and M&A markets — unrealistic valuations Lack of focus on business fundamentals Biggest IPOs: Excite@Home now bankrupt! Biggest M&A: Lucent/Chromatis now shutdown!

Lessons Learned: The Internet Boom (1996-2000): 

Lessons Learned: The Internet Boom (1996-2000) Venture capital is a highly specialized business Venture capital is about investing in unique technology Too many dollars ruin a market Too many dollars ruin a company Customer value proposition matters

What Matters: 

What Matters Great Management CEO David Scott 17 Year HP Veteran Sun Enterprise Server Development Team Big Market 2004 Storage Market - $140B Unique Technology Utility Class Storage Customer Value Proposition 10x price performance improvement Strong Business Model 55%+ gross margins Great Return May 2001: $100M financing with a $300M valuation Criteria

A 32 Year Legacyof Great Investments: 

A 32 Year Legacy of Great Investments

Mayfield at a Glance: 

Mayfield at a Glance Early stage investors Singular focus on information technology Communications Enterprise software 410 portfolio companies; 100 publicly traded, 51 acquisitions 10 partners, 4 associates, and operating, marketing and recruiting partners $1 billion fund raised in April 2000 7 early stage investments completed in 2001

Mayfield Blueprint for Success : 

Mayfield Blueprint for Success A 32 Year Legacy Partners and Organization Investment Strategy Technology focus with differentiated products Relationships with "centers of excellence" Value add for portfolio companies

Current Technology Trends : 

Current Technology Trends Pervasive computing Increased mobility Distributed applications Voice and text-based applications Real-time enterprise Improved productivity Enhanced connectivity Data Management Decreasing costs of transporting, processing and storing

What's It All Mean?: 

What's It All Mean? Back to the basics in venture investing Innovation continues Downcycles happen Prediction: Several billion dollar companies will emerge out of this downcycle It's a great time to start a technology company!

Slide16: 

kfong@mayfield.com (650) 854-5560