RWI Group Closes Fund IV, Raises Over $100 Million in Venture Capital; Fund to Focus on Early-Stage Communications, Software, and Semiconductor Investments.

Business Editors/High-Tech Writers

PALO ALTO, Calif.--(BUSINESS WIRE)--Jan. 22, 2001

RWI Group, an early-stage venture capital firm, today announced the closing of RWI Group IV, L.P. (the "Fund") with over $103 million in commitments. The Fund marks the continued growth of RWI Group since its inception in 1995.

RWI Group IV, L.P. will invest in start-ups primarily in the communications, software, and semiconductor sectors. The average initial investment will range from $2 to $3 million, with sufficient capital reserved for participation in future rounds of financing. The Fund will look to invest primarily in first or second-round venture financings. The Fund has already invested in four companies and anticipates investing in approximately 20 companies. With the closing of RWI Group IV, L.P., RWI Group increases its assets under management to more than $165 million.

The Fund was raised and is run by General Partners Donald A. Lucas and William R. Baumel. Other RWI Group investment professionals include Principal Jonathan B. Barek and Special Limited Partners Donald L. Lucas and Noel P. Rahn. Most investments are expected to be located in Silicon Valley and will have the active involvement of the RWI Group team.

As was the case with previous RWI Group funds, the majority of the Fund's capital came from active individual investors who include leading entrepreneurs, CEOs, senior technology executives, venture capitalists, attorneys, and financiers. These limited partners help with entrepreneurial and management expertise, industry contacts, due diligence support, and deal flow. In addition, the Fund received investments from institutional investors such as Minneapolis Teachers' Retirement Fund Association and St. Paul Teachers' Retirement Fund Association.

"I'm very pleased with the response from investors," said Donald A. Lucas, founder and managing general partner of RWI Group. "Despite the current fundraising environment, we had strong demand from existing RWI Group investors and attracted several high-quality new investors to the Fund. This Fund will allow us to continue our hands-on involvement in the growth and success of our portfolio companies."

As a Special Limited Partner, Donald L. Lucas, a 40-year veteran of the venture capital industry and the founding investor in such leading technology companies as Cadence Design Systems, Macromedia, National Semiconductor, and Oracle, will continue to play an active role in working with portfolio companies in the Fund. His experience and guidance is an invaluable resource in advising both RWI Group as well as technology entrepreneurs.

"We view the current investing environment as extremely strong," stated Bill Baumel, general partner of RWI Group who joined RWI Group in May 2000 after more than five years at Coral Ventures. "Valuations have become more reasonable while the pace of technological innovation continues unabated. We have extremely strong deal flow and by keeping our fund relatively small, we have a great opportunity to work with early-stage companies."

According to Antony Awaida, CEO of Xporta, Inc., a Silicon Valley start-up seeded by RWI Group which recently completed its second round of financing, "RWI Group is a great funding source for new companies looking for more than money. They have a very strong network of contacts and resources, and they will roll up their sleeves and become an extension of the company in order to help entrepreneurs grow their businesses. Raising RWI Group IV in the current market conditions is a testament to the strength of their team."

Minneapolis Teachers' Retirement Fund Association (MTRFA), an investor in RWI Group III, L.P., increased its commitment for RWI Group IV, L.P. Karen Kilberg, executive director of the MTRFA, commented, "The team at RWI Group practices old-fashioned venture capital: selectively finding great technology companies and then helping to build these companies, actively drawing on the extensive network of RWI Group limited partners in the process. They avoided the dot-com mania which affected many other funds and instead focused on building real businesses. In an age of mega-funds, I like the fact that RWI Group kept their fund relatively small. This will allow them to work closely with early-stage portfolio companies without the pressure to put large amounts of money to work."

RWI Group has already made several investments in the Fund, including:

-- Cierra Photonics, a Santa Rosa, Calif. company that applies wafer scale
integration technology in the production of cost-effective, high-performance
fiber optic components.

-- PDF Solutions, a San Jose, Calif. company that provides yield-enhancing
software and services for semiconductor manufacturers. Donald L. Lucas is on
the board of directors.

-- Xporta, a Santa Clara, Calif. company that develops global sales
acceleration software which enables companies to provide total landed cost
solutions. Donald A. Lucas is on the board of directors.

-- YY Software, a Mountain View, Calif. company that provides intelligent
customer auto-response software for eBusiness platforms. Bill Baumel is on the
board of directors.

About RWI Group

RWI Group is an early-stage information technology venture capital firm based in Silicon Valley with over $165 million of capital under management. Primary areas of focus include communications, software and semiconductor companies. Representative investments include Cierra Photonics, Conduct Ltd. (Sold to Mercury Interactive) (Nasdaq:MERQ), Extricity, Intraspect Software, Novalux, nQuire Software, Pluris, Preview Systems (Nasdaq:PRVW), ProxiNet (Sold to Pumatech) (Nasdaq:PUMA), RangeStar Wireless, SLP Infoware (Sold to Gemplus) and Xporta. For more information please see www.rwigroup.com.