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To: Bernard Levy who wrote (50589)	1/17/2001 4:48:29 AM
From: Maya	Read Replies (2) \| Respond to of 50808

Thanks for the link. Here is the full story: The bite Guy Rolnik Two months after shattering the record when Broadcom Corporation (Nasdaq:BRCM) bought it for $780 million, little Israeli startup VisionTech made history again. This time it became the first Israeli startup whose entire takeover process was documented on television. The true to life images presented by Uvda (“Fact”), a documentary investigative show hosted by reporter Ilana Dayan, of VisionTech CEO Amir Morad telling employees about the megadeal turning them all into multimillionaires are a journalistic coup. But if what interests you in a startup story is how much the workers get, then you’re owed an episode or two. The story of VisionTech and other hi-tech deals remains to be told in full. Everybody knows how much the VisionTech deal was worth. Broadcom paid $780 million in shares for the company. Everybody also knows that since the transaction was made in shares, its value is subject to market fluctuation. Israel has already seen deals contract by as much as 90% of their value when the buyer’s shares crash. Less widely known is how the pie is really shared out when a startup is sold or issued. How much the entrepreneurs get, what is the workers’ bite, and how much goes to the startup’s … customers. Its customers? Yes. VisionTech refuses to comment on these assessments, but sources in the capital market believe that several hundreds of millions of dollars from the deal won’t be going to the startup’s founders or employees, but to customers holding stock options. Old boys network in New Economy It has become common for startups to issue stock options to their customers, and sometimes to their suppliers. It’s an open secret that the uppermost echelons of giants such as Cisco Systems (Nasdaq:CSCO) tend to personally obtain stock option sin startups with which their companies do business. Thought New Economy was all technology, developments and algorithms? Wake up. It’s a lot more like old economy than you thought. Closing a major hi-tech deal often involves a lot of handouts, sometimes personal allocations of stock options. Remember the deal in which Lucent Technologies (NYSE:LU) bought Chromatis Networks? A glance at Lucent’s prospectus published after the deal shows that a quite a lot of major figures in Wall Street communications and financial invested in the Petah Tikvah-based startup just before its takeover by Lucent. Sure they took a risk. In hi-tech there’s no such thing as a safe investment. But what’s sure is that issuing options and shares to key figures in the relevant industry is sometimes a necessary step toward “creating value” ahead of “exiting” – selling the company outright, or enabling the shares to be sold by issuing the company on a public exchange. Are the company’s employees deprived? Far from it. Hi-tech workers get a bigger share of the pie (the value the company creates) than employees in any other industry. A cautious estimate is that at least 1,000 Israeli startup workers have turned into millionaires, in dollars, over the last year. That’s it? But the portion workers will get in hi-tech issues and deals to come will be a lot smaller the press portrays, or than they expect. Not only because of the Nasdaq crash and the need of companies to fork over options with everybody from key industry figures to mediators to customers – it’s because the venture capital funds financing the startups have protective mechanisms in place. The most common protective mechanism built into investment contracts is that the moment the startup’s value falls below a certain point, or fails to grow at a pre-set pace, the fund’s portion of its equity increases, at the expense of entrepreneurs and workers. This is a time of diving valuations. The protective mechanisms are kicking in. When conducting financing rounds these days, most entrepreneurs and workers are finding their portions of equity far more diluted than they had realized. When the exit arrived, they will find their reward is much smaller than they’d thought. Their only comfort is that most startups never even reach that point. Most entrepreneurs aren’t fretting over their piece of the pie, how diluted they’ve become or who their shareholders are. They’re wondering how to pay salaries come the first of next month.

To: Bernard Levy who wrote (50589)	1/17/2001 7:15:24 PM
From: John Rieman	Respond to of 50808

Sony's settop called ugly:-(........................... Sony's long awaited set-top box allowing Cablevision Systems subscribers to access video-on-demand, the Internet and e-commerce opportunities turned out to big, black and bulky. "I'll say one thing about it: it's ugly," says Gary Arlen, president of interactive research firm Arlen Communications, who was there for the box's unveiling at last week's Consumer Electronic Show in Las Vegas. It turned him off so much that he didn't even pay attention to what was inside. If others react the same way, Arlen wonders how either Cablevision or Sony will succeed in the retail market with this product. more............................................. telecomclick.com