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To: allen v.w. who wrote (35797)	6/22/2000 8:46:00 PM
From: allen v.w.	Respond to of 40688

How Do Top Internet Venture Capitalists Spot a Solid Investment? Posted by Rochelle at Wed Jun 21, 2000 - 2:47 PM PT In the aftermath of the technology market shakeout this spring, venture capitalists and investment groups are critically scrutinizing the business models and customer value of emerging Internet companies more than ever. What new fundamentals are they seeking when investing in Internet companies? Funding for start-ups this year will now undergo a rigorous set of standards in order to gain the investment community's vote of confidence. Here are some things to keep in mind... Two influential technology investors and the CEO of a new Internet company comment on how the ability to serve real business needs was a crucial factor in the recent funding of Internet upstart Question.com -- an eMarketplace relationship management company that helps facilitate online communication and relationship building between buyers and sellers within Internet Marketplaces. Old Economy Ideals in a New Digital Economy For the next half of the year, a prominent theme for investors evaluating new Internet ventures is the ability to combine Old Economy business ideals, such as profitability and long-term value, with next- generation technologies designed to serve a New Digital Economy. When evaluating his latest portfolio company, Austin Ventures General Partner John Thornton noted four critical characteristics that attracted him to invest in Question.com -- the most important being the development of solutions that serve as the underlying fabric for Internet commerce, most commonly referred to as infrastructure technologies. The other vital evaluation criteria included: leadership by an accomplished management team, proven customer traction and maturity of technology for real-life usage. Question.com CEO and president David Sikora found the climate among investors was more skeptical than ever when he recently secured more than $34 million in funding for his latest venture, from companies including: GE Global eXchange Services, Vignette Corporation, Charles River Ventures and GE Equity. "Investors have become weary of the unproven 'concept company' phenomena and demand sound, results-oriented business plans," noted Sikora. Back to Basics To raise substantial funding, he went back to basics, relying on proven business formulas to demonstrate how his company will generate new revenue, achieve profitability, and most important, successfully serve blue-chip customers with solutions that will help them improve their businesses. "It's simple -- no matter what industry you're in -- you must profitably produce a product or service that helps your customers either save money or make money," said Sikora. "At Question.com, our major objective is to ensure that our customers succeed."