NetSuds February 2003 Monthly Report

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        1.0 Heard on the Net
        2.0 Jobs in the "com and .com" Market
        3.0 NetSuds and MedicalSuds Calendars - FREE POSTINGS
        4.0 Tidbits
               4.1    NetSuds on Tour - Agiliti
               4.2    Email Advertising
               4.3    Ex-Governor Secures Venture Funding
               4.4    BizPathways Matches Entrepreneurs to Resources
               4.5    Minnesota Venture Capital Conference - May 19-20, 2003
               4.6    UofM Carlson School Business Plan Competition
               4.7    NetSuds Awards Carlson School Slot at MNVCC
               4.8    URLs For Sale
               4.9    Name That Dog
               4.10 Networking Works
               4.11 Q4 Commercial Real Estate Report
               4.12 Minnesota International Business Development Conference - May 21-22, 2003
        5.0  Calendar of Events
        6.0  2003 Outlook for Venture Capital Is Brighter
        7.0 NetSuds CEO Roundtable - Next Roundtables starting in April
        8.0 Build Predictable Revenue In Your Organization
        9.0 Customer-Owned Networks: ZapMail and the Telecommunications Industry
       10.0 Knowledge-based industrial clusters blossom in state (Wisconsin) as activity blooms
       11.0 Through the Gate (a new monthly column)
       12.0 Guest Writers for this Report

1.0 Heard on the Net

1.1 People on the Move:

Please email: people@netsuds.com to report a change in your job status if you are moving from or to a company in the "com or .com" space. Include your new work contact information, not just your personal contact information. We do not accept press release changes from third parties. We must hear directly from the person who is 'on the move'.

NetSudser Ken Holec is returning to the Twin Cities from North Carolina where he has been CEO of PeopleClick. Ken is the former CEO of St. Paul-based Lawson Software and the CEO of Rochester-based Showcase. Ken will turn over the CEO reigns in March 2003 to the new PeopleClick CEO. Contact Ken at either ken_holec@att.net or 703.754.8302. Ken was one of the early Presidents of the Minnesota Software Association.

NetSudser Jack Hauser, formerly with Andcor, has accepted the position of VP of Finance and Administration at VisionShare in St. Paul. You may reach Jack at either 651.645.3300 or jack.hauser@visionshareinc.com.

Michael Anders is the new President and COO of Systems Consulting Group in St. Paul. He succeeds Douglas Hanson, who remains as CEO. Michael was previously with KPMG Consulting in Sydney, Australia. Contact Mike at either manders@scg-corp.com or 651.636.4470.

Sanjay Jhawar is the new Entrepreneur-In-Residence at St. Paul Venture Capital, based in the firm's Boston office. He will focus primarily on the wireless communications market. Contact Sanjay at sanjay@spvc.com.

NetSudser Phil Platt is the new Marketing & Membership Director at the UofM Campus Club - www.umn.edu/cclub/. You may contact Phil at either 612-625-1442 or platt@umn.edu.

2.0 Jobs in the "com and .com" Market

Please email: jobs@netsuds.com to report job openings in the "com and .com" Market. In the body of the message, give the name of the company and a URL link to the job postings.

The web calendars for NetSuds and MedicalSuds continue to grow in popularity as more and more people use them for the definitive place to find high-tech events in the Twin Cities. The calendars are free to use for both tracking events and for posting your own events. To post events, login as "guest" with a password of "guest". The Calendars are accessed at

Non-Minnesota companies conducting events in Minnesota will not be allowed to post events for free. Events posted to either of these calendars are not immediately available for viewing. All events will be marked "pending" and will be reviewed for content prior to public viewing.

4.3 Ex-Governor Secures Venture Funding

What's an ex-Governor to do if he doesn't run for US Senate or President? If you are North Dakota's ex-Governor Ed Schafer, you get some venture funding - $7M - and start a venture which plans to improve the high-speed and wireless reach of rural communities. For more information, see www.extendamerica.com/news.htm.

4.4 BizPathways Matches Entrepreneurs to Resources

BizPathways (www.bizpathways.org) is an online tool that points entrepreneurs to local resources they may find useful in starting and managing their enterprises. So, if you are in Dakota County, for example, and want to learn how to write a contract, the Contract Law section of BizPathways provides some brief definitions and will point you to organizations, tools, and events in Dakota County that can help you learn about contracts - from a contract law class at the Dakota County Technical College to lawyers in your area that focus on business issues.

We match users with resources by profiling registered users and customizing their access to include specific resources. We also have interactive business plan templates and a business-building checklist that users can access to create, store and retrieve documents in a secure environment.

Registration for BizPathways is currently free for users as well as resource providers. BizPathways is an initiative of Minnesota Rural Partners (www.minnesotaruralpartners.org) with a grant from the US Department of Commerce (www.ntia.doc.gov/top/).

Visit BizPathways (www.bizpathways.org) to become a registered user or to get listed as a resource (https://www.bizpathways.org/BizPathways/WelcomeSP.aspx).

4.5 Minnesota Venture Capital Conference - May 19-20, 2003

The 2nd Annual Minnesota Venture Capital Conference - www.mnvcc.com - will take place May 19-20, 2003 at the Radisson UofM. Last year's conference had 250 attendees which included 22 formal venture presentations, 50+ investors representing over $20 billion dollars in managed capital and many opportunities for businesses of all sorts to reach customers and partners.

This year's Conference is co-hosted by US Senator Norm Coleman and will feature presentations from emerging technology companies, panels and speeches by investors and industry visionaries, exhibits and lots of networking opportunities. The Conference will also include many educational aspects so that you can learn the business of tech/medtech start-ups, financing, etc.

Potential sponsors should send an email to sponsor.inquiry@mnvcc.com to learn about sponsorship opportunities.
See the list of committed investors registered for the event at www.mnvcc.com/agenda/speakers.htm.
Entrepreneurs can apply to present at the Conference by visiting www.mnvcc.com/entrepreneurs/.
Members of the media can apply for a complimentary media pass at www.mnvcc.com/media/.
Investors can apply for a complimentary registration by visiting www.mnvcc.com/investors/.
Register today at the early-bird registration price - www.mnvcc.com/register/.

Sponsored by

GOLD

BRONZE

4.6 UofM Carlson School Business Plan Competition

From NetSudser Anders Davisson, adavidson@csom.umn.edu

Carlson School business plan competition for entrepreneurs

Entrepreneurs and visionaries can turn great ideas into real businesses, thanks to the Gopher the Gold University of Minnesota Business Plan Competition.

The three winners of the 2003 Gopher the Gold competition will receive a total of $50,000 in equity and services with which to start their businesses. The annual business plan competition is designed to encourage the growth of innovative business ideas and entrepreneurial ventures at the University and in the local business community.

Competing business plans must be submitted by March 24th, 2003, and the winners will be announced on April 14 at the judging presentation. Each participating team must have a University of Minnesota student, staff or faculty member as a partner.

http://www.gopherthegold.org/

4.7 NetSuds Awards Carlson School Slot at MNVCC

For the second year, NetSuds will award one of the presentation slots at the Minnesota Venture Capital Conference to the winner of the UofM Carlson School Business Plan Competition.

4.8 URLs For Sale

4.9 Name That Dog

With four young boys who love dogs, I knew it was just a matter of time. The stars came into alignment on this deal, too. First, we found the right breed. Next, we found a breeder close to my brother-in-law, the veterinarian. Third, the breeder's husband is Internet savvy; which means there is a 24x7 webcam of the growing puppies! So, check out www.kizmar.com and click on the PuppyCam. Email me at matt@netsuds.com with suggestions on the names for the little female Vizsla with the white collar. I'll add them to the kids' names and we'll pick one out and announce it in a future NetSuds Report.

4.10 Networking Works

In the past few months, many "People On The Move" items have appeared. One was an announcement that Nancy Harrower had left Retek and started New Venture Communications. That short announcement resulted in a phone call from a prospective client who turned in to an actual client. For more information, contact Nancy Harrower at nancyharrower@attbi.com.

4.11 Q4 Commercial Real Estate Report

From NetSudser Brian T. Fogelberg, 952.924.4609, bfogelberg@cbre.com

http://www.netsuds.com/docs/q402realestate.pdf

4.12 Minnesota International Business Development Conference - May 21-22, 2003

The Minnesota International Business Development Conference - www.ibdconference.com - will take place May 21-22, 2003 at the Radisson UofM. Various international chambers of commerce, the UofM, the Minnesota Depart of Trade & Economic Development and other partners are cooperating to create a business event exploring international business.

The Conference is co-hosted by US Senator Norm Coleman and will feature presentations from technology companies, panels and speeches by international business experts, exhibits and lots of networking opportunities.

Potential sponsors should send an email to sponsor.inquiry@mnvcc.com to learn about sponsorship opportunities.
The Agenda is available at www.ibdconference.com/agenda/.
Companies can apply to present at the Conference by visiting www.ibdconference.com/presentations/.
Members of the media can apply for a complimentary media pass at www.mnvcc.com/media/.
Register today at the early-bird registration price - www.mnvcc.com/register/.
May 22 - On-site Tours of Local Companies - www.ibdconference.com/agenda/.

Sponsored by

GOLD

BRONZE

You can also try our new online calendar by clicking here for NetSuds and here for MedicalSuds.

6.0 2003 Outlook for Venture Capital Is Brighter

By Dee Power and Brian Hill, copyright 2003 all rights reserved worldwide

Entrepreneurs polish up your PowerPoint presentations and practice your pitches, because the venture capital purse strings may be starting to loosen up.

The venture capital environment in the United States looks brighter for 2003, according to a survey of 74 venture capital companies located in 23 states. The study was conducted by Dee Power and Brian Hill, authors of "Inside Secrets To Venture Capital," and "Attracting Capital From Angels," John Wiley & Sons, publisher.

2002 About The Same As 2001
********************************
The venture capitalists were asked if the environment for entrepreneurs looking for early stage capital today is better or worse than 12 months ago. The VCs were asked to rate the environment from 1 to 5, 1 -- being much worse, 5 -- being much better.

The average rating was 2.8, about the same.

Rating	Percent VCs responding
1	4 %
2	37 %
3	33 %
4	25 %
5	1 %

The number of entrepreneurs looking for venture capital has fallen again for the second year. However the quality of the entrepreneurs' business plans the venture capitalists did receive, has substantially improved for the second year as well, according to the VCs.

A Brighter Outlook for 2003

When asked if the next twelve months would be better or worse than the current environment, 60% of the VCs said it would be better.
Again the VCs were asked to rate the environment from 1 to 5, 1 - being much worse, 5 -- being much better. The average rating was 3.6.

Rating	Percent VCs responding
1	0 %
2	6 %
3	34 %
4	54 %
5	6 %

The three reasons most often given for the optimism were in order:

1. Overwhelmingly in first place -- Improvement in the economy and equity markets
2. There is money available to invest
3. IPO markets and options for potential liquidity are improving.

Followed closely by:

4. Valuations are more realistic
4. Portfolio triage is over
4. Capital Spending is up

Selected comments by the venture capitalists:

"I believe that the outlook will be improved 12 months from now in that the economy will be looking brighter and the VCs will be more anxious to deploy some of the capital that is burning a hole in their collective pockets."

"I believe the economy is turning around and there is a lot of capital on the sidelines waiting to be placed into good opportunities."

"NASDAQ will improve"

Other reasons given were:
Can't get any worse
Fly-by-night companies are gone

The negative venture capitalists blamed their pessimism on the economy not improving fast enough and the need to focus on their portfolio companies. Only two VCs mentioned terrorism or war as a factor.

There were some geographic variances in the responses. VCs in the Pacific Northwest were the most optimistic with a rating of 4.2, while New York VCs were the least optimistic with a rating of 3.3, but every region believed that the climate for entrepreneurs looking for capital would improve.

Region	Rating
Pacific Northwest	4.2
Southwest	3.7
Midwest	3.7
California	3.5
South	3.5
East	3.5
New York	3.3

Overall the trend for the last few years has been upward. VCs rated the environment in 2001 as worse than 2000 with an average
rating of 1.9. 2002 saw an improvement to 2.8. And the outlook for 2003 is 3.6, a substantial improvement.

2001	2002	2003
1.9	2.8	3.6

Now Is The Time

For entrepreneurs that have been waiting on the sidelines to start their search for venture capital, 2003 may be the best opportunity of the last few years. There is less competition and the attitude of venture capitalists towards funding early stage companies is more favorable.

Additional Analysis

Additional Analysis will be available throughout January and will cover:

What do venture capitalists think are the most critical mistakes entrepreneurs make in their business plan?

What is the one characteristic VCs think an entrepreneur must have to be successful?

What advice do venture capitalists give to entrepreneurs looking for early stage capital?

A referral by a trusted associate is accepted as the best way for an entrepreneur to be introduced to a venture capital firm. What other ways do VCs recommend for an entrepreneur?

The above results will be available on a regional basis as well. The regions include:

Pacific Northwest, Southwest, Midwest, California, South, East, New York

************************************************************

Dee Power and Brian Hill are the authors of "Attracting Capital From Angels: How Their Money and Their Experience Can Help You
Build a Successful Company," 2002, John Wiley & Sons, and "Inside Secrets To Venture Capital," 2001, John Wiley & Sons,
available in bookstores nationwide and online booksellers such as amazon.com and www.capital-connection.com.

They are also the founders of Profit Dynamics Inc. located in Fountain Hills Arizona and of http://www.capital-connection.com
The Entrepreneurs Resource For Finance. They can be reached at business@capital-connection.com

NetSuds is opening up another group of CEO Roundtables in April. The first meetings of the 3 CEO Roundtables occurred January 21, 22 and 23. We will be initiating another Roundtable in April 2003. If you are tech or medtech CEO and want to join us in April (the first session is free), contact matt.noah@netsuds.com. A synopsis of the CEO Roundtable can be found at www.netsuds.com/ceo/ It is repeated here as well.

Membership Only CEOs of tech and medtech companies are allowed to join the NetSuds CEO Roundtable. If you are a VP, CxO or President, you are not welcome unless you also hold the CEO title. Perhaps we will start a CFO, CTO or COO Roundtable but until then, we are only interested in the top dog, the CEO. If you are interested in becoming a member, contact matt.noah@netsuds.com. Membership is not automatic. There must be an available spot open in the roundtable. You must have employees. Your company must be incorporated. Your company must be a tech (communications, IT, Internet) or medtech (medtech, biotech, life sciences) company. You must pay a yearly fee in advance. You may not send substitutes to the Roundtable.

Roles Unlike the days of knights, kings and Camelot, there is no king of the NetSuds CEO Roundtable; only a facilitator; Matt Noah, CEO of NetSuds.com, Inc. Knights are replaced by CEOs and the table won't be quite round.

Schedule The Roundtable will meet 10 times per calendar year. Exact dates are not decided upon at this time. Each meeting will last between 1 and 2 hours starting at 7 am. A facility convenient to the majority of Roundtable members will be chosen. Breakfast will be served.

Purpose CEOs need resources to assist them in executing their duties and leading their companies. Boards of Directors and upper management are not always the best or most independent resources upon which to draw. The CEO Roundtable exists to provide CEOs with an independent resource of wisdom and shared experience. Your key 'take-aways' from the Roundtable will be accelerated learning - so as to avoid common and uncommon pitfalls -, an expanded network of advisors and colleagues and tools to enhance the productivity and value of your enterprise.

Content First, networking among the CEO members of a Roundtable is the best and richest content. Second, the Roundtable facilitator will schedule subject matter experts of interest to the CEOs. Examples include intellectual property, branding, sales, engineering, marketing, finance, compensation, human resources, M&A, etc.

Format Meetings will consist primarily of 2 elements. First, "content" will be presented and discussed. Second, "discussion" of common problems and solutions will take place. The facilitator will lead both elements or assign elements to certain CEOs.

Confidentiality Roundtable meetings are completely confidential. Nothing said in a roundtable discussion, short of illegal activity, leaves the meeting. This allows each CEO to feel comfortable discussing issues and subjects he may not feel comfortable speaking about with others.

8.0 Build Predictable Revenue In Your Organization

What a sales-management system can do for you, by NetSudserKen Thoreson, ken@acumenmgmt.com

9.0 Customer-Owned Networks: ZapMail and the Telecommunications Industry