Greetings from the Outlook team!

If you haven”t noticed by now late 2003 and 2004 are shaping up to be great years for early-stage IT investment. In the future, investors will likely look back on 2004-5, as some of the best years for early-stage investment in the first decade of the 21st century.

Consider the Ðchips are down¼ theory. The chips have been down for the Silicon Valley and venture investment in general: unemployment has been high, no liquidity is in sight for many private companies, people”s expectations have been Ðreset¼ from bubble highs, the value of Ðbasic common-sense business¼ has returned. When the chips are down, people tend to look elsewhere for growth and prosperity. When they look elsewhere, those willing to stick around help renew and get the first mover advantage. They are the beneficiaries of the BOTTOM of the cycle. The Silicon Valley has renewed itself in this fashion through several cycles, dating back to the 1960s.

Outlook Ventures is currently very active in seeking out seed and early-stage software opportunities, and has invested in three new companies in the past three months (double the pace of the previous three years!). We are primarily funding experienced/serial entrepreneurs (CEOs of our last 3 deals had a combined 9 previous business start-ups), Greenfield markets (new market spaces brought about by new technologies or new ways of doing business), and breakthrough technologies. If you send companies of this type to us, we will react quickly and give these entrepreneurs our attention.

The Chips are down, but the Tide is Up!

The Outlook Ventures Team
March 2004