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POWER FACT
The amount of venture capital dollars invested in companies across the country grew 266% for the first quarter of 2000 over the first quarter of 1999, from $6.2 billion to an astonishing $22.7 billion. 85% of this money went to early stage companies (previously known as start-ups) according to the National Venture Capital Association.

BRAIN SNACK
In a recent nationwide study of advertising executives by Menlo Park-based Creative Group Marketing, 66% felt like they got their best ideas in the morning - 32% believe they are most creative in the early morning hours!

POWER FACT
More women are climbing the ladder at Fortune 500 companies, according to a 2000 study by Catalyst, which showed that 12.5% percent of corporate officers in the nationÍs 500 largest companies are now women, up from just 8.7% in 1995. While women are playing only a major role in the Internet companies funded by venture capitalists in 1999, making up 45% of top management posts, they serve as CEO in only 6%.

BRAIN SNACK
A study released in July by the University of Texas indicates that a vast majority of Texans are ready for ñe-government.î Two-thirds of the random sample of households use a computer and the Internet regularly, and 81% believe that the Internet could improve access to government services.

POWER FACT
Texas was well represented in the Inc. 500 list of fastest growing companies for 2000. Austin was the #3 city in the country with ten companies on the list; Dallas came in at #4 with nine companies, and Houston, with six companies, was close behind at #5.

POWER FACT
AeA released a study in May which ranked Texas #2 nationally in high-tech jobs; the stateÍs high tech work force has increased to more than 411,000 jobs.

2001 YEARLY REPORT

greater austin community highlights

In many ways, Austin experienced both successes and surprises. The first half of 2000 was full of exciting growth, high hopes for IPOs, new company announcements and a steady flow of investments into companies. During the second half, however, news was more often about layoffs, start-ups closing their doors, plummeting stock prices, and venture dollars slowing to a trickle. The entrepreneurial spirit runs strong in Austin, however, and there is little doubt that 2001 will again have Austin high tech businesses back in stride. We have highlighted below some of the more interesting, influential and representative happenings of the business year in Central Texas.

The 360 Summit in January brought together again the leaders of our high tech community to address the challenges and opportunities we face as companies and as citizens. Several initiatives were developed to work on issues such as increasing voter turnout in area elections; strengthening ties between the University of Texas and local high tech employers; and solving our metropolitan transportation problems.

The Asian Chamber of Commerce hosted a sold-out New Year's Gala in February, showcasing the Austin business community's diversity and our ever-growing involvement in international initiatives.

The Young Men's Business League and the Young Women's Alliance co'sponsored the second "Austin Under Forty" awards program in February, recognizing nine outstanding young leaders of our business, charitable, political and healthcare communities.

The Texas eCommerce Association hosted their inaugural Top Ten Awards in Austin in March. Over 500 of the state's leading e-commerce executives attended the banquet, which was hosted by CBS's Dan Rather and recognized the top ten Texans in this industry, including Austinites Michael Dell, Neil Webber, Ross Garber and Andrew Busey.

Austin-Bergstrom International Airport, according to information gathered by the Airports Council International in the first quarter of 2000, was the 6th fastest growing airport in the nation.

During the first six months of 2000, Austin added 32,500 jobs to the local economy, a 5.2% increase for the same period in 1999.

Of 60 "CyberCities" studied by the American Electronics Association (AeA), Austin ranked #4 in the concentration of high tech workers for the 1990s, according to a report released during the summer. In 1998, for example, 148 out of every 1,000 Texas workers were employed in the high tech industry.

In July, seven Austin companies made the Software Magazine annual ranking of the top worldwide public and private software companies (based on 1999 revenues). Pervasive Software was the top local company at #187 with $66.5 million in software revenue. Also representing Austin were Metrowerks, Concero, Evolutionary Technologies International, BPA Systems, Catapult Systems and PolyDyne Software.

By the end of September, layoffs from dot-coms across the country surpassed 16,000; in Austin during just August and September, nearly 700 people lost their posts at eight Internet-based companies.

The annual Fortune 500 Conference (sponsored by Jaguar) for the CEOs of the nation's largest companies was held in Austin during October. More than 100 top executives attended the conference and enjoyed hot spots in Austin like the UT campus and the Four Seasons Hotel; each CEO had a Jaguar and driver at their disposal during their stay.

The Austin office of KPMG celebrated the fifth year of its Austin High Tech Awards in October, and about 700 people from the area's hottest tech companies celebrated with them. Tim Sanders, director of Yahoo's ValueLab, was the master of ceremonies, and seven local companies were honored for their industry leadership, product innovation and community commitment.

An analysis of US Census Bureau data released in October showed that Austin was in the top three cities nationwide for growing "big business." In 2000, Austin had 731 companies with 100 employees or more, a 48% growth from 1995, when our city had 495 companies with that employee count.

In the fall, Forbes ranked Austin the "best place to do business and advance your career," based primarily on our community's job and salary growth in the high tech sector. Austin moved into the top spot from the #2 ranking received in 1999, replacing Seattle.

The Austin Entrepreneurs Foundation quickly grew as one of the best ways for local start-ups to give back to their community. Ninety-four emerging Austin high tech companies pledged stock in 2000 to the foundation to fund future charitable contributions — a process now known as equity philanthropy. The founders of the Austin Entrepreneurs Foundation are also helping to establish similar organizations in other communities, including Houston and Dallas.

houston community highlights

In the fourth largest city in the country, where the economy is traditionally driven by the energy, construction and healthcare industries, technology made 2000 its year for growth and expansion in Houston. The national economy, a strong dollar, and rising energy prices further encouraged the growth of the technology sector in a city known for its diversification and international flare. Following are a few of the highlights from Houston in 2000.

Packed with a vibrant venture capital market (more than $535 million invested), a strong educational system, and large research and development, Houston witnessed many of its hometown giants venture into the technology world, including Enron, with its venture funds, Enron Broadband, Enron Online and Enron Net Works divisions. Reliant Energy and others also created subsidiaries focused on emerging technologies and the Internet.

While corporate America adopted and supported technology, several start-ups fared well throughout the year. Houston's success stories included: Ashford.com, the online fine jewelry retailer, who made headlines by giving away a million dollar diamond worn by Faith Hill during the National Anthem at the Super Bowl; Questia Media, which received the largest round of financing in Houston with $90 million invested; and CompuBank, the first federally chartered electronic bank in the U.S.

Houston experienced its 14th consecutive year of job growth and was named the third-fastest growing high tech city in the United States based on the number of high tech jobs in an AeA CyberCities report. Its strongest tech sectors were energy, information technology, biotechnology, and NASA-related industries. The report also cited that 42 out of every 1,000 private sector workers were employed in high tech firms in Houston, outpacing the oil and gas-drilling sector for the first time in history.

As a result of what localbusiness.com called the "Internet Express" of 2000, networking organizations also experienced a boom, satisfying Houston"s demand to know and be known. The Houston Technology Center"s Digital Mixers brought together more than 400 Houstonians on a monthly basis, many times filling the venues beyond capacity. In addition, the Rice Alliance for Entrepreneurs and Technology, MIT Enterprise Forum of Texas, Technology Entrepreneurs' eXchange, Tech Execs, Association of Internet Professionals, Women in Technology International, Texas Electronic Commerce Association and others found a strong and loyal following in Houston.

Houston also saw an influx of conferences and exhibitions to showcase emerging technologies, including Interactive Energy, Chemicals Online, ITEC, and others. Mayor Lee Brown brought together more than 1,000 women to support technology in the "Gulf Tech" City by sponsoring the Mayor's Women in Technology Conference at the George R. Brown Convention Center. In addition, the Mayor's Girls in Technology Competition at NASA brought more than 150 teenage girls together in a team-based competition to address alternative energy sources.

Houstonians also found a way to cross the digital divide through Technology For All, a non-profit organization that creates neighborhood-based computer learning centers, including new and donated equipment, networking services, Internet access, and training for underserved children and adults throughout the city.

Because of its diversification and the traditional economy base, Houston was not as affected by the downturn in the market, however HoustonÍs systems integration service providers were hit hard.

OUR FIRM

Carol Thompson founded The Thompson Group in 1993 to work with companies looking for one simple but powerful thingÜ—better business relationships. While services have evolved during the past seven years, focusing on building and maintaining mutually profitable relationships has remained the cornerstone of our firm. Today, The Thompson Group serves clients as a strategic marketing partner, developing and implementing grass-roots strategies in geographic marketplaces across Texas. Our services are based on our deep knowledge of and high-level connections within specific business communities; we customize our strategies and tactics according to the culture and influencers of each city. Our staff members are involved with the leading organizations, events, companies and individuals within each community, and our constantly evolving services reflect the changing nature of influencing factors.

Our Services:
The Thompson Group is a consulting firm, specializing in helping businesses attain marketing, public relations and business development goals in the Texas marketplaces. Our experience and depth in this region uniquely qualifies us to work with companies that want to relocate or expand within a specific community. Our services include marketing and public relations programs designed to integrate clients into relevant sectors of the community, gaining them access to influencers and decision makers, and delivering their message to target audiences effectively. Specific deliverables include:

• Targeted and strategic networking programs, including organizations and events
• Publicity programs, including sponsorship and speaking opportunities
• Customized lists of key influencers and strategies for building relationships
• Personalized executive networking plans
• Customized training programs
• Media relations
• Special events strategy and management
• Marketing communications plans
• Community relations and charitable giving programs
• Message development personalized for specific marketplaces
• Competitive analysis personalized for specific marketplaces
• Budget research and recommendations
• Presentation assessments

Our Future:
The Thompson Group is committed to continuing to grow our firm in Texas and beyond. Our goal for 2001 is to establish our firm as the premier partner for businesses who want to develop a unique and compelling presence in the major business communities within Texas. We have strengthened our knowledge base and professional network in the Dallas Metroplex during the past year, and are working to build a more permanent presence in that exciting technopolis. San Antonio is also a focus for The Thompson Group in 2001; we will research and build our local network as that community evolves its base of high tech and entrepreneurial companies. We are committed to offering statewide services to our clients, customizing our recommendations based on our expertise in each city. We appreciate all of the support of our staff, our clients and our colleagues, and look forward to great successes together as we continue to challenge ourselves to provide even better service in our current and developing marketplaces.