CDR: VC SECrets Newsletter 9.15.00

[EDGAR Online News]

EDGAR Online's VC SECrets Newsletter
Send comments to:
mailto:editor at edgar-online.com

***INSIDE THIS ISSUE

VC QUESTION OF THE WEEK: All Stock Options Taxed the Same?
VC COMPANY PROFILE: Ethnic Foods.com
VC SECTOR PROFILE: Broadband Companies
COMPANIES MENTIONED IN THIS ISSUE
PEOPLE MENTIONED IN THIS ISSUE

/----------ADVERTISEMENT--------------------------------\
FREE IPO GUIDE FROM BOWNE. Everything you need to know
before you go public -- from the initial decision to
perfecting your roadshow. Click here.
http://live.doubleclick.net/bowne/bowne_ipo1.html
\-------------------------------------------------------/

----------------------------------------
***VC QUESTION OF THE WEEK***
----------------------------------------
Answered by Bruce Brumberg, Esq.

QUESTION: Are all stock options taxed the same?

ANSWER: No. The taxation of your stock options will depend upon
whether they are incentive stock options (ISOs) or nonqualified
stock options (NQSOs). ISOs are free from regular tax at the date
of grant and the date of exercise (when a non-qualified option
would become taxable). NQSOs do not meet the IRS criteria for ISOs
and therefore trigger a tax upon exercise. This type of option
requires withholding of state and federal income tax, Medicare and
FICA/FUTA on the excess of the fair market value over the exercise
price on the exercise date.

Bruce Brumberg is Editor-in-Chief of myStockOptions.com

/----------ADVERTISEMENT------------------------------------\
DON'T MISS OUT ON YOUR CHANCE TO WIN AN IBM THINKPAD 600X
Register now for any of ITworld.com's weekly IT email
newsletters, and enter our sweepstakes for your chance
to win a powerful new IBM ThinkPad 600x. CLICK HERE!
http://www.itworld.com/sweeps/sweepsim.html?impsite=9235
\----------------------------------------------------------------/

----------------------------------------
**VENTURE CAPITAL COMPANY PROFILE**
----------------------------------------
By Udayan Gupta, Venture Capital Contributor

Tandoori and Noodles: EthnicGrocer.com Delivers

Immigrants are hot. Asian and Hispanic populations are booming.
Asian and Pacific Islanders populations have grown 43% percent.
Hispanics have increased nearly 40%. EthnicGrocer
(www.ethnicgrocer.com) has figured that the best way to these
populations is through their stomachs. Food!

"If you're Chinese and you live in Alabama, the chances of your
finding a Chinese store are almost none," says EthnicGrocer.com CEO
and president Parry Singh. Outside of the major urban centers,
immigrants have a hard time finding cultural-specific foods. The
ethnic food market in the U.S. is fragmented. Most retailers are
small and carry a limited amount of merchandise. "Seven out of ten
times you go to the distributor, he doesn't have what you want,"
says Singh. In response, Singh and his colleagues founded
EthnicGrocer.com and its sister sites, Namaste.com for the
Asian-Indian market, GongShee.com for the Chinese market, and
QueRico.com for the Latin American market. Consumers can shop online
and have their favorite foods - including perishables - delivered
right to their door. A godsend for newly immigrated Chinese in Alabama.

In August, EthnicGrocer.com announced the closing of its $41 million
C round of financing. Investors in the company include Integral
Capital Partners, Kleiner Perkins Caufield & Byers, Amerindo
Investment Advisors, Merrill Lynch, Benchmark Capital and KB
Partners, LLC.

Singh says his company's strengths are its scalable supply chain
platform and its expertise in ethnic marketing. As the company grows,
it continues to add hard-to-find products, and to offer other product
lines. "We start with food to build a bond with the consumer," says
Singh. Based in Chicago with a distribution centers in Hebron,
Kentucky and Northbrook, Illinois, the company currently employs 150.
By the end of the year, EthnicGrocer plans to launch sites for the
Korean, Filippino and Kosher markets.

EthnicGrocer was far from the first in the online grocery shopping
space, however. Companies like California-based Webvan Group, Inc.
(WBVN), New Jersey-based NetGrocer.com, Inc., Massachusetts-based
Streamline.com, Inc. (SLNE), Washington-based HomeGrocer.com, Inc.
(HOMG) and Peapod, Inc. (PPOD) all deliver grocery products straight
to consumers' doors. Moreover, what's there to prevent brands such
as New Jersey-based Goya Foods, Inc., California-based Authentic
Specialty Foods, Inc., and Minnesota-based Hormel Foods Corporation
(HRL), or even Houston-based retail chain Fiesta Mart Inc., from
launching their own Web sites? And it can only be a matter of time
before established chains like Cincinnati-based The Kroger Co. (KR),
Boise-based Albertson's, Inc. (ABS), and California-based
Safeway Inc. (SWY) jump on the net.

*** NOTE: On Tuesday, Peapod (PPOD) announced its acquisition of
Streamline.com (SLNE)
http://www.edgar-online.com/secrets.asp?d=A-1036992-0000950131-00-005301

*** NOTE:  A number of Webvan Group(WBVN) insiders have registered
to sell stock recently
http://www.edgar-online.com/bin/esearch/default.asp?QT=1&query=WBVN&date=1994


EthnicGrocer.com, Inc.

Venture Capital Investors

Kleiner Perkins Caufield & Byers
Benchmark Capital
KB Partners, LLC
Integral Capital Partners
Amerindo Investment Advisors
Merrill Lynch

Executive Team

Parry Singh, CEO and President
Subhash Bedi, COO
Venkat Raju, CTO and VP of Engineering
Sami El Saden, VP of Marketing

/----------ADVERTISEMENT--------------------------------\
Purchase Business/Credit Reports from Dun & Bradstreet on
over 11 million U.S. businesses. Click on the "Resources"
link when you look up SEC filings for any public company,
or search by company name and state at
http://www.edgar.telebase.com
\-------------------------------------------------------/

----------------------------------------
**VENTURE CAPITAL SECTOR PROFILE**
----------------------------------------
Broadband Companies: Unclogging the Pipe

Ensemble Communications Inc.
WildBlue Communications, Inc.
@Link Networks, Inc.
Jump. Net
As the world - or increasing numbers in it - go online, the limits
of the systems that deliver Internet services are being stretched.
The protocol "WWW", for many, now signifies World Wide Wait. Critics
say AOL stands for "America On Late." Telephone dial-ups are
excruciatingly slow, severely limiting downloads and new product
development. But the dangling carrot of land-based cable and DSL and
wireless broadband keeps consumers going, holding out the promise of
relief from slow modem madness.

A report released by the Clinton Administration in the spring of 2000
says that while broadband is available to those in densely populated
centers, the same cannot be said for those in rural areas. The study,
published by the Department of Commerce, says that while broadband
via cable is available in 65% of U.S. cities with a population over
250,000, and via telephone in 56% of cities over 100,000, fewer than
5% of towns with populations under 10,000 have any broadband access
whatsoever.

Even in the urban markets where broadband is available, delivery is
spotty. Providers are backed up and many users have been waiting
months, even years, for broadband installation.

Wireless broadband could change all that, with satellites providing
next-generation Internet access to those in far-flung regions, such
as parts of Alaska, North Dakota and, yes, Guam. For many, however,
cable and DSL are still preferable for its land-based infrastructure.

The broadband space already has many contenders. For wireless
broadband, Sunnyvale, CA-based Adaptive Broadband Corporation (ADAP),
Tel Aviv-based BreezeCOM Ltd. (BRZE), Santa Clara, CA-based
Wireless, Inc., and Plano, TX-based Nucentrix Broadband Networks, Inc.
(NCNX) are already competing for customers in the U.S. and abroad.
For cable and DSL service, individuals and businesses look to
Redwood City, CA-based At Home Corporation (ATHM), Englewood, CO-based
Rhythms NetConnections Inc. (RTHM), and New Haven, CT-based DSL.net, Inc.
(DSLN).

Given the ever-widening reach of the Internet, there is plenty of
room in the space to grow. The following companies are worth adding
to your radar:

Ensemble Communications Inc.

The San Diego-based company, with its Adaptix module and Fiberless
delivery system, manufactures point-to-multipoint systems for use
with wireless broadband. Ensemble (www.ensemblecom.com) recently
announced the closing of a $60 million round of financing. Corporate
investors in the company include Cisco Systems, Inc., ADC
Telecommunications, and Samsung.

Venture Capital Investors:
Dell Ventures
The Goldman Sachs Group, Inc.
Crescendo Ventures
Enterprise Partners
Institutional Venture Partners
Trinity Ventures

Executive Team:
David A. Twyer, CEO
Jay Klein, CTO
Sheldon Gilbert, EVP of Engineering and Operations
Rami Hadar, EVP of Marketing and Business Development
Gary Bohdan, VP of Finance and Administration

WildBlue Communications, Inc.

Based in Denver, WildBlue (www.wildblue.com) plans to offer broadband
access via satellite in North America and Latin America by 2001.
Originally founded as KaSTAR Satellite Communications, in July the
company says it closed a $137 million second round of funding.
Corporate investors include Liberty Media, TV Guide and TRW.

Venture Capital Investors:
Kleiner Perkins Caufield & Byers

Executive Team:
Thomas E. Moore, CEO and President
David M. Drucker, Founder and Chairman
Jeff Weaver, VP of Architecture
Robert Luly, VP of Technology
Brad Greenwald, VP of Marketing and Business Development

@Link Networks, Inc.

The Louisville, Colorado-based firm provides broadband services to
small and medium-sized businesses. Formerly known as Dakota Services,
the company says it secured $101.2 million in its second round of
venture capital funding. @Link Networks (www.atlinknetworks.com),
which offers primarily DSL, says it will use the money for its
nationwide deployment.

Venture Capital Investors:
Madison Dearborn Partners
Columbia Capital
Telcom Ventures
Morgan Stanley Dean Witter

Executive Team:
Alexander H. Good, Chairman and CEO
Hank Carabelli, President and COO
Jarrett B. Appleby, Chief Development and Strategic Officer
Douglas Zolnick, CTO
Raymond O'Brien, Chief Marketing Officer

Jump.Net, Inc.

Jump. Net (www.jump.net), based in Austin, Texas offers DSL,
co-location and Web hosting in 90 cities across the U.S. Through its
investment arm, Jump.Net Ventures, the firm gives start-ups low or
no-cost Internet service and Web hosting in exchange for equity.

Venture Capital Investors:
Prime New Ventures
Alta Communications

Executive Team
Kenneth Smith, CEO and President
Frank Bieser, SVP
Dewey Coffman, VP of Sales and Marketing

----------------------------------------
**COMPANIES MENTIONED IN THIS ISSUE***
----------------------------------------
@Link Networks, Inc
Adaptive Broadband Corporation
Albertson's, Inc
Alta Communications
America Online
Amerindo Investment Advisors
At Home Corporation
Authentic Specialty Foods, Inc
Benchmark Capital
BreezeCOM Ltd
Cisco Systems, Inc
Columbia Capital
Crescendo Ventures
Dell VenturesDSL.net, Inc
Ensemble Communications Inc
Enterprise Partners
EthnicGrocer.com
Fiesta Mart Inc
Goldman Sachs Group, Inc
GongShee.com
Goya Foods, Inc
HomeGrocer.com, Inc
Hormel Foods Corporation
Institutional Venture Partners
Integral Capital Partners
Jump.Net, Inc
KB Partners, LLC
Kleiner Perkins Caufield & Byers
Liberty Media
Madison Dearborn Partners
Merrill Lynch
Morgan Stanley Dean Witter
Namaste.com
NetGrocer.com, Inc
Nucentrix Broadband Networks, Inc
Peapod, Inc
Prime New Ventures
QueRico.com
Rhythms NetConnections Inc
Safeway Inc
Samsung
Streamline.com
Telcom Ventures
Telecommunications
The Kroger Co
Trinity Ventures
TRW
TV Guide
Webvan Group, Inc
WildBlue Communications, Inc
Wireless, Inc
Zolnick, Douglas

----------------------------------------
**PEOPLE MENTIONED IN THIS ISSUE***
----------------------------------------
Appleby, Jarrett B
Bedi, Subhash
Bieser, Frank
Bohdan, Gary
Carabelli, Hank
Coffman, Dewey 
Drucker, David M.
El Saden, Sami
Gilbert, Sheldon
Good, Alexander H.
Greenwald, Brad
Hadar, Rami
Klein, Jay
Luly, Robert
Moore, Thomas E.
O'Brien, Raymond
Raju, Venkat
Singh, Parry
Smith, Kenneth
Twyer, David A.
Weaver, Jeff

----------------------------------------
ABOUT THE CONTRIBUTORS
----------------------------------------
VC SECrets is published every Friday.

Udayan Gupta has covered the venture capital industry for more than
a decade as a senior writer for The Wall Street Journal and is the
co-founder of Biztrail.com, an Internet portal for entrepreneurial
businesses. He is the author of the forthcoming book "Done Deals"
(Harvard Business School Press, 2000), an oral history of the venture
capital industry.

Bruce Brumberg is the Editor in Chief of MyStockOptions.com and an
advisor to The National Association of Stock Plan Professionals.
Bruce has developed numerous books and videos on SEC compliance,
insider trading and stock plan administration.

For press, syndication, and advertising inquiries, contact
Group Publisher Hank Berkowitz at
mailto:hberkowitz at edgar-online.com
----------------------------------------
Copyright 2000, EDGAR Online, Inc.
http://www.edgar-online.com
----------------------------------------
DISCLAIMER: The EDGAR Online report
contains observations of its editor
Timothy Middleton, a consultant of EDGAR
Online and is for informational purposes
only.  These statements and expressions
are the sole opinions of Mr. Middleton and
EDGAR Online does not endorse nor
necessarily agree on such statements
and expressions.  Factual statements in
this report are made as of the date
stated and are subject to change without notice.
Nothing contained herein shall be deemed to be
recommendations to buy, hold or sell
securities nor shall it purport to be a
complete analysis of the companies
mentioned.  While the information
contained in this Report and the opinions contained
herein are based on sources believed to be reliable,
neither Mr. Middleton nor EDGAR Online
have  independently verified the facts,
assumptions and/or estimates that may
be contained in this Report. Accordingly, no
representation or warranty, expressed or implied,
is made as to, and no reliance should be placed
on, the fairness, accuracy, completeness or
correctness of the information and opinions
contained in this Report.

****************************************
UNSUBSCRIBE INSTRUCTIONS
****************************************
You are receiving this newsletter because you are a
registered user of EDGAR Online. To unsubscribe from
the SECrets Newsletter, go to
http://www.edgar-online.com/auth/updateinfo.asp
and deselect the free newsletter option.

If you need your user name or password, go to
http://www.edgar-online.com/username.asp
For help contact: mailto:support at edgar-online.com
****************************************

Email Distribution Services for EDGAR Online
provided by DoubleClick DARTmail.
****************




*#* cypherpunks at toad.com