December, 2001

1
The Life After

• December, 2001

2
Next Year Well make the big step ahead

• International Terror
• Intifada
• NASDAQ

How Bad Is it ?!
3
Supply / Demand Repealed
The world has reached an absurd disparity between
the number of outstanding shares of technology
stocks and the number of people out there to
chase them
Shares of top five tech firms Cisco Systems,
Intel, Microsoft, Oracle, Sun Microsystems
World population
4
Equity Capital Markets Update
5
The Pipeline
The IPO Market will probably not gain much
momentum in the last five weeks of 2001.
According to Dealogic, there are only 51 IPOs in
the pipeline. This is a considerable decline
when compared to the same time last year when
187 companies were scheduled to go public.
6
IPO Dollars in Backlog (millions of Dollars)
Technology represents 42 of the dollars in the
IPO pipelines
7
Mutual Funds Flows
Money Markets (as of November 20, 2001)

• Assets at an all-time record high of 2.29
  trillion
• While money market yields have reached historical
  lows, they still offer institutional investors a
  higher return than treasury bills and commercial
  paper.

8
Mutual Funds Flows
Equity Funds (as of November 20, 2001)

• Three consecutive weeks of hefty inflows-assets
  of 2.73 trillion
• Half of the weeks (November 13-20) inflows of
  2.1 billion went into large cap growth funds and
  half went into small and aggressive growth funds

9
New Offerings are Trickling Back
10
Follow-On Pricings

• Due to Deteriorated market conditions, supply of
  follow-ons is lighter and the appetite for
  properly positioned follow-ons is growing
• Although continuing to exhibit concerns about
  valuations and fundamentals, investors continue
  to seek growth opportunities

11
Venture Capital
New reality in the next few years

• Much less money- 20-25
• Very little new investments (in new companies)
• New emphasis on profit, cash flow
• Different schedules- raising money takes a lot of
  time
• Different legal environment

Cash Is King
12
In The long run- The New Economy?!
Get down...

• Back to reality- sales and profit are In again!
• We are five years back
• Planning of financing and fund raising, sales and
  profits
• Its a new world- and we need to get used to it

New Economy
Old Economy
13
Key Take Aways

• What is the market looking for in a tech company?
• A strong management team
• Consistent growth
• A low cash burn rate
• A clear sign to profitability
• Avoid unnecessary hype
• Under promise and over deliver!

14
The New Tech World