Paradigm Genetics Industry Agricultural Biotechnology Founded: September 1997 CEO: John Ryals Funding History: February 1998 - $4 million July 1998 - $8 million 2000 - $15 million May 2000 - $42 million (IPO) Partners & Investors Intersouth Partners, Diatech, Ltd., Polaris Venture Partners, TransAmerica Business Credit, Phoenixcor Financial Services, Burrill & Co.	In the rapidly evolving biotechnology industry, two and a half year-old Paradigm Genetics, an agricultural biotech (agbio) company, is one of North Carolina's newest IPO candidates. Taking advantage of Wall Street's new interest in biotechs, Paradigm recently filed with the Securities and Exchange Commission to raise approximately $100 million through an initial public offering. Founded in September 1997, by President and CEO John Ryalsand four former Novartis crop protection scientists, Paradigm Genetics intends to use the new financing for general operations and possible acquisitions. The agricultural sector of the biotech industry combines the knowledge of how individual plant and animal genes work, with computer science and the process of manipulating the chemical gene makeup of agricultural outputs, to create such potential products as heartier crops and plants that fight insects. The end results can be as ambitious as more nutritious "supervegetables" or a more reliable food supply. In the course of research, Paradigm has developed an expertise in the science of "functional genomics." In this field, the Company identifies individual plant genes and their functions, inputs the information into a database, and then utilizes the database along with sophisticated data-mining software to determine what genes are possible "targets" for manipulation. Finally, Paradigm determines the impact of various external chemical compounds on the "target" genes. Other corporate partners involved in the process, then use those chemical compounds to actually alter the makeup of the gene and the resulting agricultural produce. Knowing that in the biotech industry, the process of bringing a single product to market can take years of research and millions of dollars spent on clinical trials, Paradigm has been very strategic in its choices of industry partners. For instance, in October 1998, Paradigm signed an agreement with Bayer AG for $40 million to aid in the development of a new herbicide. More recently (January 2000), the Company struck a broader deal with Monsanto for $55 million to aid in the creation of a wide range of harvest products. Payments in both agreements are for Paradigm's achievement of technological "milestones," and could potentially involve royalty payments based on the sales of any end marketplace product. Paradigm has been very smart about its non-industry partners as well. Also in January 2000, Paradigm announced a strategic alliance with life sciences software company LION Bioscience AG to assist in processing and analyzing the reams of data required for its products. The two also plan to collaborate on new industry software products. In addition to its vast proprietary database of plant genes and their functionalities, Paradigm has an added benefit over its competitors. With the ability to test its theories in its new industrial scale laboratory facilities, Paradigm's research results tend to be much more reliable than those of its primary competitors, who deal only in the theoretical functions of genes. And movement into new research facilities isn't the only growth Paradigm has experienced during its brief history. From its original five employees, the four scientist founders plus a secretary, the Company now employs 102 individuals at its RTP facility, with the expectation that number will grow to more than 200 by year's end. Numerous scientists, new laboratory facilities, and ongoing research and development with no product to market as yet, require large infusions of cash. But, unlike most startups, cash has been in plentiful supply for Paradigm since its inception. In 1998, the Company raised $12 million in two financing rounds, and added $8 million more in March 1999. The recent resurgent interest in biotechs by Wall Street indicates that the investment cash stream is likely to continue. However, to overcome the IPO hurdle, investors must be sold on Paradigm's ability to deliver on research results and fulfill the strategic agreements it has negotiated. Last year, Paradigm's only revenue came from strategic alliances and a government grant. While the risks are great, no one knows them better than Paradigm's management team. In fact, the registration statement filed with the Securities and Exchange Commission clearly lays out in Paradigm's own words the battle the Company faces - "We are an early stage company using unproven technologies and, as a result, we may never become profitable." But if recent trends on Wall Street are any indication, they are risks many savvy investors are willing to take.
LendingTree Industry Internet Business Services Founded: 1996 CEO: Doug Lebda Funding History: December 1998 - $5 million 2nd Quarter 1999 - $5 million September 1999 - $50 million February 2000 - $44 million (IPO) Partners & Investors Union Labor Life Insurance Company, Capital Z Financial Services, GE Capital, The Goldman Sachs Group	Up and coming Internet startup LendingTree, Inc. recently demonstrated that North Carolina's reputation for highly successful financial services corporations is not limited to the traditional banking establishment. LendingTree.com, based in Charlotte and founded by Doug Lebda in 1996, enables Internet consumers to comparison shop for favorable loan terms on mortgage deals, home equity lines, auto loans, and credit card loans by tapping into its extensive network of on-line lenders. After going public on February 16, 2000 at $12 per share, LendingTree has risen as high as $21 per share and recently closed at $16.75. The Company, which offered 3.7 million shares and raised $44 million with its IPO, competes in the on-line loan market which, estimated at $482 million in 1997, is expected to top $100 billion in 2001. Using the funds raised during this financing round, the Company recently initiated a $40 million television, print and outdoor advertising campaign that emphasizes the credo "When Banks Compete, You Win." Based on extensive customer research, the Company developed its business model to capitalize on the desire of consumers for empowerment in the lending marketplace. Through LendingTree.com, within 24 hours of a single loan request consumers can receive and evaluate as many as four loan offers without ever having to leave the comfort of home. The value proposition isn't limited to consumers either. Through an extensive network of more than 100 financial institutions - including such recognizable names as Citibank, Chase, Advanta, Bank One, First USA, and PNC Bank Corporation - LendingTree provides lenders with a new distribution channel, reduction of customer acquisition costs, and the ability to receive forms from consumers to whom they are most likely to extend a loan offer. By developing alliances with such Internet partners as Priceline.com, LendingTree has dramatically expanded the marketing base of traditional financiers by allowing consumers access to such revolutionary products as name-their-price mortgages. LendingTree also provides marketplace data to its strategic partners, enabling them to expand their customer base nationwide, and refine and improve their Internet lending strategies thereby allowing them to quickly respond to changing market conditions. In the burgeoning business to business market, the Company also offers proprietary software to banks wanting to set up their own independent web-based lending sites, and boasts such customers for this software as North Carolina-based Wachovia Corporation. LendingTree, together with nine lending partners, launched the on-line loan assistance product in June of 1998, two years after founder Doug Lebda personally experienced frustration with the traditional mortgage loan application process. In December of 1998, the Company announced its first external financing, $5 million from Union Labor Life Insurance Company, with an additional $5 million coming from the same source during the second quarter of 1999. LendingTree is led by a management team with more than 100 years of combined experience within the banking, financial services, consumer marketing, and information technology sectors. Prior to going public last month, in September of 1999 LendingTree announced completion of a third funding round totaling $50 million with Capital Z Financial Services, GE Capital, and The Goldman Sachs Group. The deal marked one of the top Internet equity deals of 1999. Looking forward, LendingTree processed over 68,000 loan applications in the first two months of this year; and currently facilitates more than $65 million a day in loan demand from consumers seeking home mortgages, home equity, automobile financing, personal loans and credit cards. Given its consumer-focused product approach and powerful strategic alliances with some of the nation's top lending institutions, LendingTree Inc. has apparently developed a robust root system extensive enough to support the type of growth necessary to succeed in the ever-expanding Internet marketplace.
Cogent Neuroscience Industry Biotechnology Founded: 1998 CEO: Max Wallace, President and CEO Funding History: 1999: $5.5 million April 2000: $15 million Partners & Investors Intersouth Partners, Aurora Ventures, Kitty Hawk Capital, Cordova Technology Partners, Eno River Capital, Franklin Street Partners, The Wakefield Group, SR One, TriState Investment Group Presented at Venture '98.	Max Wallace believes the Research Triangle Park region is on an entrepreneurial roll, citing Red Hat, Trimeris and SciQuest.com as examples of success stories that have created "a lot of momentum in the past three years." "I think everybody is enjoying the liftoff of the Triangle," Wallace said. He should know. Wallace played a key role in launching five ventures in the region, including Trimeris. He co-founded his latest company, Cogent Neuroscience, Inc., in October 1998, or about a year after stepping down as funding president of Trimeris (Nasdaq: TRMS). "It takes about a year to really put the things together to make a company come to life," said Wallace, president and CEO of Durham-based Cogent. "Now that's changing. The timeframe is shortening, which is important in a marketplace that expects you to make an impact quickly." Although Cogent is an integrated neurological target and drug discovery company searching for novel and effective treatments for brain diseases, Wallace said he had to configure it like an Internet company. "We're shooting for a liquid return for our investors within two years of our founding," he said. "We can't take 10 years." Prior to the recent frenzy of Internet-related IPOs, a biotech firm such as Cogent would have been given seven years to reach profitability. Wallace and seven others raised $5.5 million in 1999 for initial funding from five venture capital firms—Intersouth Partners, Aurora Funds, Eno River Capital, Kitty Hawk Capital and Cordova Ventures. Cogent closed on a second round of venture capital totaling $15 million in April 2000, twice as much as it initially set out to raise. "We would up closing on $15 million, and we could have taken quite a bit more, " said Wallace, which should enable the company to grow its workforce from 30 to 90 people. The expansion will be done "as quickly as we can responsibly hire the right people," said Wallace. "They have come up with a very sound business model," said Stuart Frantz of Franklin Street Partners of Chapel Hill, which led the latest round of financing. In addition to Franklin Street Partners, the new investors include The Wakefield Group, which is based in Charlotte and has an office in Durham; SR One, the venture-capital arm of SmithKline Beecham; and the Triangle based TriState Investment Group. "Cogent's my baby," he said. "I learned a lot in those previous ventures. The right thing to do now is harvest all the knowledge and experienced I've gained and go for it."
XS, Inc Industry Agricultural Sector Founded: 1998 CEO: Fulton Breen, President & CEO Funding History: April 1999: $2.5 million Oct. 1999: $20 million Dec. 1999: $500,000 Partners & Investors Morgan Stanley Dean Witter Venture Partners, Morgan Stanley Dean Witter Capital Partners, Meredith Corporation, Southeast Interactive Presented at Venture '99.	XS, Inc. is redefining distribution in agricultural chemicals via a double blind Internet auction site coupled with automatic fulfillment processes . The company allows all players in the agricultural chemical industry - manufacturers, distributors, and growers - to anonymously buy and sell product through an open forum in which prices are determined in real time based on the fundamentals of supply and demand. XS, Inc. founder Fulton Breen spent more than 21 years in the agricultural chemical business, while co-founders Bill Barton and Randy Hompesch have extensive experience in the consulting and IT industries, respectively. Through the vision of its vastly experienced founding fathers, XS, Inc. has developed a current membership base of more than 40,000, and is currently the largest and only neutral trading site in agriculture with several million dollars in transactions. XS, Inc. is currently initiating a strategic round of funding for the first quarter of 2000. The company's funds are primarily being spent on marketing, technology, and people. When asked why he likes doing business in the Triangle, Breen says, "It has great resources, quality of life, climate, and it's the home of the Blue Devils".
SciQuest Industry E-commerce: Scientific Supply Founded: 1995 CEO: Stephen Wiehe, CEO Scott Andrews, Chairman Funding History: 1997: $700,000 (angel investment) 1998: $10 million 1999: $37.5 million November 2000: $120 million (IPO) Partners & Investors Trinity Ventures, Bessemer Venture Partners, ABS Capital, Noro-Moseley Partners, The Wakefield Group Presented at Venture '98.	The global scientific supply market is as fragmented as it is vast. Based on data from the Laboratory Products Association and Strategic Directions International, the 1999 global market for scientific products was approximately $36.4 billion. A considerable amount of time and money is spent by customers and suppliers searching for each another. The founders of SciQuest.com, a team with many years of combined industry experience and extensive contacts throughout this supply chain, spotted opportunity amid this chaos: e-commerce. "That's where the future is," says co-founder and vice president of business development Peyton Anderson. Anderson, Scott Andrews, Bobby Feigler and Keith Gunter founded SciQuest.com to use e-commerce as a means of speeding scientific discovery in 1995. Today, SciQuest.com is a leading business to business e-marketplace for scientific products used by pharmaceutical, chemical, biotechnology, industrial and educational organizations worldwide. By leveraging its extensive laboratory products and supply chain management expertise with its exclusive product listings and robust portfolio of e-procurement solutions, SciQuest.com has the ability to reduce customers' procurement costs and increase researchers' productivity. Additionally, SciQuest.com provides suppliers a cost-effective sales and marketing channel. The company's e-marketplace is distributor-neutral and can be customized and seamlessly integrated with its customers' enterprise systems. "It was a matter of understanding the market," says CEO Scott Andrews. "We firmly believe that industry knowledge -- knowing the current way business is conducted and its weaknesses, along with knowledge of key contacts in the industry are most important. Technology is only really useful if it solves a real business problem in a quicker, easier, or more effective way." The company has built a management team of industry veterans committed to reducing supply chain costs and inefficiencies thus benefiting both buyers and suppliers. As of January 1, 2000, SciQuest.com employed more than 200 professionals at its headquarters in Research Triangle Park, N.C., and offices in MountainView, Calif., and Plainview, NY. The company went public in November 1999 at an initial offering price of $16/share.
Ganymede Software Inc. Industry Network Performance Management Software Founded: 1995 CEO: Tim Huntley, Founder and CEO Funding History: $10.6 million private funding raised Investors: Triangle Investment Group, South Atlantic Venture Capital, Canaan Partners, Ascent Venture Partners Presented at Venture '96	Excellence in an IT organization can be measured in many ways, but what really is the ability to consistently deliver reliable, predictable application performance. This can be difficult, at best, given the complexity and piecemeal design of corporate networks today. IT managers must see and understand what the end user is experiencing in order to deliver well-behaved networked applications. Well acquainted with the problem, four former IBM developers created a company, Ganymede Software, to provide software that helps businesses contend with monitoring and managing their large data networks. With its powerful and flexible Chariot® and PegasusTM software packages, large corporate customers can build, test and monitor their multi-protocol networks, streamlining the process and saving money. It's a given that building better tools and providing innovative approaches to widely-shared problems are key components of a successful high-tech business venture. But understanding the evolution of technology -- and the accompanying unforeseen problems -- distinguished Ganymede for investors. "Rarely do things go exactly as planned," explains founder and CEO Tim Huntley. "So [investors] want [companies] that can react well and adapt. We do that." Ganymede was founded in 1995 with $650,000 from private investors. A year later, Ganymede presented at Venture '96. The first round of venture capital came from Chapel Hill's Tristate Investment Group (TIG), and Tampa's South Atlantic Venture Capital. With that initial $4.5 million targeted at accelerating sales and marketing functions and building a solid staff of creative, problem solving engineers, Ganymede next secured a $5.5 million round of funding from Connecticut's Canaan Partners and Boston's Ascent Venture Partners in 1998. On February 28, 2000, Mission Critical Software announced that it has entered into a letter of intent to acquire Ganymede Software Inc. Under the terms of the agreement, Mission Critical Software will issue 2.75 million shares and options in a transaction to be accounted for as a purchase. Based on Mission Critical Software's closing share price of $62.25 on February 25, 2000, the total value of the transaction would be approximately $171.2 million.
Xanthon, Inc. Industry Molecular Diagnostic Technology Founded: 1996 CEO: Jim Skinner, President and CEO Funding History: $22.6 million raised to date Investors & Partners: Intersouth Partners, Noro-Moseley, Cordova Ventures, Aurora Funds, Franklin Street/Fairview Capital, North Carolina Technological Development Authority, Centennial Venture Partners Presented at Venture '97	Xanthon is a molecular diagnostics company with a platform electrochemical technology that detects DNA or RNA directly, circumventing the need for chemical labels and amplification as well as expensive equipment and highly skilled laboratory personnel. "We have made significant technological and product development progress," reports Jim Skinner, Xanthon's President and CEO. "Our first product, the Xanthon Xpression Analysis System, will be introduced to the market for drug discovery applications this fall," he notes. Xanthon contracted with RELA, Colorado Medical Technologies for the design, development and manufacture of the instrument used in the system. "We now have 30 employees and 26,000 sq. ft. of research & development, engineering and manufacturing space in RTP," adds Skinner, a repeat entrepreneur who's led several successful biotech firms, including Editek. The company's core technology was discovered at the University of North Carolina at Chapel Hill by Holden Thorp. He and his colleagues continue to collaborate with Xanthon as they explore the next generation of this technology under a multi-year Sponsored Research Agreement (SRA). Under a separate SRA, Ed Bowden of North Carolina State University is assisting with the product development program. The company also has two other SRA's with Duke University and Brown University. The technology is owned by UNC and exclusively licensed to Xanthon. Xanthon is funded by a premier group of southeastern venture capital firms. It secured $11 million in three rounds from Research Triangle investors Intersouth Partners, the Aurora Funds, Franklin Street/Fairview Capital, Centennial Venture Partners and the North Carolina Technological Development Authority, as well as Atlanta-based Noro-Moseley Partners and Cordova Ventures. In addition, Xanthon was awarded a $200,000 Economic Development Loan from the North Carolina Biotechnology Center and secured a $4 million line of credit from Oxford Venture Leasing. "The next round of venture financing is under way to the tune of $10-12 million," Skinner says, adding that he hopes to extend the investor base beyond the region. "This round of capital will be spent on product development and manufacturing scale-up. "
ICAgen, Inc. Industry Biopharmaceuticals Founded: 1992 CEO: Kay Wagoner, Ph.D. Funding History: 1995: $3.5M - Medical Science Partners 1997: $5.8M - Venrock Associates, Medical Science Partners 1997: Abbott Laboratories (undisclosed) 1999: $16.1M - Alta Partners, Venrock Associates, Chase Capital Partners & New Medical Technologies 1999: Abbott Laboratories (undisclosed)	ICAgen, Inc., is a privately held company engaged in pharmaceutical drug discovery focusing exclusively on ion channel targets. ICAgen has developed an integrated technology platform that is able to rapidly discover small molecule therapeutics for a broad spectrum of therapeutic indications, including cardiovascular, urinary, hematological and central nervous system disorders. "We have worked hard to position ICAgen as the premier ion channel drug discovery company," notes P. Kay Wagoner, Ph.D., ICAgen's president and CEO. "We will continue to generate viable therapeutic products for corporate partners and for ICAgen's internal development pipeline." To that end, the company has active drug discovery programs and five others in clinical trials or advanced preclinical studies. Last year, the company initiated trials for a drug to treat sickle cell disease in addition to collaborations with Abbott Laboratories and Bristol Myers Squibb that provide more than $100 million in pre-commercialization payments. In November, San Francisco-based Alta Partners and Chase Capital Partners led a $19 million round of venture capital. New investors included Swiss-based New Medical Technologies and the Japanese firm Fugijin. ICAgen's existing venture investors, including Venrock Associates, Gutrafin, and Hoegh Invest AS, also made significant investments. In addition, ICAgen received a second equity investment from Abbott Laboratories as a result of the continuation of the companies' agreement of 1997. ICAgen used the funding to acquire key technologies, retain top scientific talent and build its technology platform. "We appreciate the enthusiastic support of the venture community and are excited about our future," Wagoner notes. "Within the next 12 to 18 months, we anticipate closing at least two new corporate collaborations and moving our own products through clinical trials."

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