AOL Digital City Founder Launches New Internet Accelerator, Vector Development.

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WASHINGTON--(BUSINESS WIRE)--March 30, 2000

D.C.-Area Internet Accelerator Led By Bob Smith Closes First-Round

of Financing; Will Invest in Early-Stage Internet Start-Ups

Prestigious, Blue-Chip Backers Include AEA Investors Inc.,

Warburg Pincus Ventures, and Deutsche Bank 

Bob Smith, founder of AOL's Digital City Inc., the leading network of city guides on the Internet, announced today that he has formed a new Internet accelerator, Vector Development LLC. Located in the Washington, D.C.-area technology corridor, Vector enters the industry in close partnership with three prestigious financial backers AEA Investors Inc., Warburg, Pincus Ventures, and Deutsche Bank.

Vector is currently funded with more than $50 million, with future rounds planned. The company's focus is investing in non-controlling interests in B2B start-up and early stage Internet companies. These companies will primarily be commerce-oriented start-ups in the sector, especially those that use the Internet to organize fragmented business communities. Currently, Vector is in active negotiations with a number of companies and will be announcing its first investments shortly.

Vector has assembled a strong team of Internet veterans uniquely qualified to nurture and accelerate Internet start-ups during the crucial first year of development. The Vector team includes:

- Bob Smith, founder and former general manager AOL Digital City, Inc. (DCI)

- Jim Smith, former associate partner, Andersen Consulting

- Ed Hauck, former group publisher, Philips Publishing

- Mark Lewyn, former director TicketMaster Online-CitySearch; co-founder
ezgov.com

- Rick Wilhelm, former manager, Andersen Consulting

- Ellen Kirsh, former general counsel of AOL

- Gail Foster, former head of business development for AOL's HomePages and AOL
Instant Messenger

"We're the working man's accelerator," says Smith, "We'll roll our collective sleeves up and bring our more than 50 years of operational experience in the Internet, trade publishing and interactive services to be a true partner to the entrepreneurs who work with us."

The Vector team will be aiding start-ups in strategy, business development, technology implementation, sales and marketing and product development. Vector is particularly interested in working with, and investing in, Internet start-ups that organize fractured business markets and, in doing so, can enhance, or speed up, the process of buying and selling. "Interactions between buyers, sellers and the intermediaries in business transactions represent a complex community ideal for online solutions. There is a huge opportunity here for people who understand this process," says Smith.

Smith, 42, brings significant real-world Internet experience to Vector. Author of Digital City, Inc.'s business plan in 1994 and responsible for its launch and early development, he built a team of more than 250 people and developed the leading network of online city guides on the Web.

"My time at Digital City and AOL really taught me what it takes to build an Internet company from the ground up," says Smith. "Besides recommending a good non-prescription antacid, I hope I can share some of the knowledge I gained at DCI and elsewhere with a whole new generation of Internet entrepreneurs."

Partners AEA Investors, Warburg Pincus Ventures, and Deutsche Bank see great potential in Vector Development, thanks in large part to the expert team of Internet veterans behind it. According to Bob Smith, AEA--a billion dollar-plus private equity firm backed by some of the nation's top CEOs, which as a result receives B2B internet business plans every day--was impressed by the quality of the Vector team and its ability to work hand-in-glove with Internet start-ups. Adds Patrick Hackett, Managing Director at Warburg, one of the world's largest venture capital funds. "We are really excited to be working with Bob and his team...there are very, very few incubators that have this kind of management depth."

About AEA Investors Inc.

AEA Investors Inc. is a preeminent management buyout firm with commitments in excess of $1 billion. AEA has offices in New York and London and employs more than 25 investment professionals. The firm was founded in 1969 by leading industrial families and CEOs of major corporations to make private equity investments. AEA's network of investors includes current and/or retired Chief Executive Officers of major multinational companies, industrial family groups, and select institutions from around the world. AEA targets traditional buyouts, as well as growth equity and venture capital investments, in an array of select industries including analytical instruments and life sciences, communications and media, business services, consumer products, chemicals, and specialty retailing. Its most recent and present portfolio of investments includes Rand McNally, randmcnally.com, Tanning Technology, Mettler-Toledo, Waters Corporation, Balducci.com, Graco Children's Products, Sutton Place Gourmet, and Sovereign Specialty Chemicals.

About Warburg, Pincus Equity Partners, L.P.

Warburg, Pincus Equity Partners, L.P. is a private equity fund capitalized with $5 billion in 1998 and is managed by New York-based E.M. Warburg, Pincus & Co., LLC., a major global private equity investment firm that has invested more than $9 billion in over 350 companies since 1971. The firm has over 80 professionals working in offices in the US, the UK, Germany, Japan, Hong Kong and Singapore. The firm has considerable experience in funding software companies and Internet start-ups; as well as more traditional investments in advertising, media, communications, health care, retail and other relevant brick and mortar businesses. Its past and present portfolio of investments includes Internet companies such as EarthWeb, Covad Communications, AsiaInfo, StarMedia, BEA Systems, the Cobalt Group and Chemdex. More information is available at www.warburgpincus.com.

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