Garage Technology Ventures Enters 2005 with New Investments and Successful Exits

PALO ALTO, CA–January 28, 2005–Garage Technology Ventures completed 2004 reporting an expanded portfolio of companies and several portfolio company successes, including two liquidity events. As a seed-stage and early-stage venture capital firm, Garage is focusing on emerging technology companies located in California and the West. The firm is currently investing out of its newest fund, the $20 million Garage California Entrepreneurs Fund, which is anchored by an investment from CalPERS, the California Public Employees Retirement System.

“Early stage technology entrepreneurs re-emerged and re-engaged with the venture community in 2004, making it a busy year for Garage,” noted Bill Reichert, managing director of Garage Technology Ventures. “With 12 early-stage companies now in the portfolio, we are looking to find eight to ten more great companies to round out the current fund in the next six quarters.”

The firm focuses on information technology and materials science opportunities, with a particular emphasis on companies with capital-efficient business models. Investments in the second half 2004 included:

• ClearFuels Technology, based in Hawaii, is applying advanced gasification technologies to produce ethanol, methanol, hydrogen and other fuels from cellulose-based crop waste. Garage co-led a Series A round of $3.5 million in October along with Pacificap and other investors.
• PhoneBites, a mobile technology company based in San Francisco whose application lets subscribers inject digital audio segments into live telephone conversations, outgoing messages, voicemails and photo messages. Garage co-led a Series A round of $3.0 million in December along with Cardinal Venture Capital and Siemens Mobile Accelerator.
• BitPass, the provider of an innovative online payment system enabling paid access to a broad range of online content and services. As an existing investor, Garage participated in the firm’s $11.75 million Series B financing. The round also included Worldview Technology Partners, Steamboat Ventures (the venture capital arm of The Walt Disney Company), First Data, and RRE Ventures, in addition to existing investors Cardinal Venture Capital and Amicus Capital.

Garage joined with other top tier venture capital firms, such as VantagePoint Venture Partners, Sequoia Capital, Alloy Ventures and Hummer Winblad Venture Partners, in earlier 2004 investments. Included in first half investments were Miasole, a manufacturer of thin-film solar cells for the direct conversion of sunlight to electricity, IP3 Networks, a customizable provisioning, billing and authentication system that enables service providers and corporate enterprises to manage and control public access to the Internet, and Sapias, a leading provider of enterprise-class mobile resource management solutions.

Liquidity events continued to make news in the Garage Portfolio in the second half:

• iNest Realty, which provides an online service for shopping for new homes from leading home builders and get cash back, was acquired by Lending Tree, a division of IAC. Garage was an early investor in INest, which is based in Chicago.
• GuruNet Corporation, which develops and markets the GuruNet Answer Engine and provides quick integrated references answers instead of just search engine links, completed a successful initial public offering and its shares are traded on the American Stock Exchange (AMEX: GRU).

Earlier in 2004, NetConversions, based in Seattle, was purchased by aQuantive (NASDAQ: AQNT).

The success of Garage’s first “Art of the Start” Conference in June 2004, with more than 300 high-tech startup entrepreneurs attending, has spurred Garage to schedule further editions to the series. Garage has slated a regional event at the University of Central Florida on Feb. 24, 2005, to be followed by a Silicon Valley edition on April 21, 2005 at the Computer History Museum in Mountain View, CA.

The conference series is based on The Art of the Start, the latest book by Garage Technology Ventures managing director Guy Kawasaki. The book reached the bestseller lists of BusinessWeek and the Wall Street Journal, and has been adopted as an entrepreneurship text by major business schools, including Stanford University. Based on Kawasaki’s and the Garage team’s experience in helping entrepreneurs, The Art of the Start features time-tested, battle-hardened business strategies and tactics entrepreneurs need to succeed.

Michael Moritz, general partner at Sequoia Capital, has joined many others in praising the book. “A successful entrepreneur requires three things: a garage, an idea, and this book–Guy’s irrepressible guide to the raw essentials of life in a young company. I wish we could post all this information on Sequoia Capital’s web site because it would make our jobs as VCs much easier,” commented Moritz.

Since its founding in 1997, Garage has dedicated itself to mentoring entrepreneurs through signature events such as the Bootcamp for Startups series and the more recent the Art of the Start series.

“Our goal is to help the next wave of entrepreneurs build the next generation of great technology companies. We help them by drawing on our experience and the experience of other successful entrepreneurs and investors,” noted Kawasaki.

About Garage Technology Ventures
Garage Technology Ventures is a seed-stage and early-stage venture capital firm located in Silicon Valley. Garage focuses on investing in and supporting emerging technology companies in information technology and materials science.

Media Contact:
Krause Taylor Associates
Betty Taylor
bettyt@krause-taylor.com
408-918-9082

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