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TECHNOLOGY INDUSTRY LUMINARIES CONVENE AT FOUNDATION CAPITAL'S ANNUAL CEO EVENT

Technology Start-Ups and CIOs Discuss Strategies to Establish Long-Term Relationships

Menlo Park, CA - May 19, 2005 -- "Maintain focus" was the advice given by a panel of world-class CIOs to more than 100 technology CEO entrepreneurs attending Foundation Capital's fifth annual CEO event. The two-day event held this week in Napa Valley featured customer executive panels focused on the importance of relationships between CIOs, start-ups and venture capitalists. Foundation Capital uses its vast industry network and deep technical expertise to bring together innovative start-ups with seasoned IT executives.

Bill Krivoshik, Managing Director and CTO of Citigroup Global Investment Management, gives insight into the customer executive's perspective of having a relationship with VCs. "When Foundation Capital comes to me with a portfolio company, I know that it's not just a great idea being funded, but one that is financially sound, has a good management team and solves a business problem. The team at Foundation Capital also works with the portfolio company to craft a message that speaks directly to me."

Foundation Capital's General Partner Warren Weiss led a discussion with CIOs and senior customer executives that identified best practices for technology start-ups working with large companies. Three key themes emerged. First, start-up vendors should focus on the problem that the prospective customer is trying to solve rather than simply selling its solution. Second, they should create a strategic partnership plan that combines multiple vendors to achieve the customers' goals. Finally, the CIOs noted that it's a mistake for a start-up to try to solve everything for its customers. "Keep your focus. Don't try to be an answer to all of your customer's needs," added Cecilia Claudio, CIO and Vice President, Engineering of Align Technology.

Quentin Hardy, Silicon Valley Bureau Chief of Forbes magazine, moderated a panel with customer executives that compared the current business and technology climate to five years ago as well as looked ahead to the next five years. The panel found that the need for an agile workforce, increased cross business unit collaboration, a focus on integration, and a faster time to market cycle characterize the current climate. Looking into the future, the panelists identified their top priorities for the next 12-24 months. These priorities include: dynamic applications, platform consolidations, intrusion prevention and identity management, storage, disaster recovery and business continuity, VoIP and networking.

"I like the combination of start-ups and big vendors because you get the best of both worlds," said panelist Lars Rabbe, Senior Vice President, Engineering Chief Information Officer, Yahoo! "You have the advantage of experience with large vendors and early exposure to emerging technologies with start-ups." Paul Holland, General Partner of Foundation Capital stresses the importance of bringing together start-ups and CIOs in an intimate setting such as Foundation Capital's annual CEO event. "We've invested in building lasting relationships with key customer executives at some of the world's most technology-savvy companies. All parties reap great benefits from these relationships. CIOs gain access to the most cutting-edge technologies and learn from their peers, entrepreneurs receive first-hand knowledge of customer needs and Foundation Capital is able to showcase the breadth of our portfolio companies."

"This year, we had the privilege of having outstanding guest speakers like author Jim Collins and civilian astronaut Mike Melville illuminate the themes of risk," said Adam Grosser, General Partner of Foundation Capital. "Risk management was a recurring theme in our CIO panels as well -- you don't get innovation without taking some risk. The CIOs provided insight to the start-up companies on how to work with them to mitigate risk."

Customer executives attending this year's event represented some of the most well-respected global companies such as America Online, Citigroup, Getty Images, KeyCorp, Nielsen Media Research, Qualcomm, Solectron, TV Guide, and Yahoo!.

About Foundation Capital
Founded in 1995, Foundation Capital is a venture capital firm committed to supporting entrepreneurs and their companies, targeting innovative opportunities in telecommunications and networking; Internet infrastructure; and enterprise software. Foundation Capital funds total over $1.1 billion and include Harvard, Yale, CalTech, the Hewlett Foundation and MacArthur Foundation as investors. For more information, visit www.foundationcapital.com or contact Samantha Finnegan (415) 392-8282, samantha@outcastpr.com.