EXHIBIT 10.14
eCOMPANIES MAKES STRATEGIC INVESTMENT IN VALUESTAR
ValueStar to Expand Rating System of America's Six Million Local Service Firms
eCompanies Funding & Experience to Drive Internet Company's Expansion
(OAKLAND, CA - December 9, 1999) - ValueStar Corporation (OTC: VLST), the
nation's leading rater of local service companies, announced today a $6.05
million strategic investment from eCompanies Venture Group, L.P. This represents
an ownership of approximately 15% of ValueStar on a fully-diluted basis. Other
participating investors brought the total funding to $9.05 million which
included follow-on investments from institutional investors Seacoast Capital
Partners, Pacific Mezzanine Fund and Tangent Growth Fund. ValueStar conducts
customer satisfaction and credential-based ratings in the Auto, Home, Health,
Personal and Professional service industries, where the Company estimates
domestic buying power to top $2 trillion annually.
"We are pleased that eCompanies shares our vision of creating America's rating
system of local service companies," said Jim Stein, CEO of ValueStar. "Whether
B-to-B or B-to-C, we believe in the Buyer's right to know. So, not only are we
building a dynamic ratings database of all six million local service companies
that is accessible over the Internet, but we're creating a big, trusted ratings
brand that helps drive buying decisions at the local level. With eCompanies as a
key partner, we're tapping into the creativity and execution experience of
Internet veterans. Strategically, we're creating a win-win, where our future
content and buying systems are synergistic with some of the initiatives
eCompanies is working on, and vice versa."
eCompanies was recently founded by Jake Winebaum and Sky Dayton. Mr. Winebaum is
former chairman of Disney's Buena Vista Internet Group and past leader of The
Walt Disney Company's broad Internet initiatives including Disney.com, ABC.com,
ABCNEWS.com, and ESPN.com. Mr. Dayton is the founder and chairman of EarthLink
(NASDAQ: ELNK), which won this year's PC Computing Magazine's 1999 MVP Award for
best Internet Service Provider.
"eCompanies' charter is to quickly identify and invest in promising companies
that use the web to allow individuals and companies to work together in ways
that were not possible without the Internet," said Mr. Winebaum. "ValueStar is
doing just that by not only redefining how buyers shop for and purchase local
services using the Internet, but they are creating a brand that is destined to
become the standard of excellence for local service companies."
"At eCompanies we are attracted to Internet companies that will have significant
impact on everyday life," said Mr. Dayton. "ValueStar is attractive because it
gives the local service buyer unique power, information and assurance that was
previously unavailable."
eCompanies offers a world-class venture fund that enables Internet innovators
such as ValueStar to secure funding and utilize significant resources for quick
and efficient execution of business initiatives. eCompanies Venture Group's blue
chip roster of limited partners includes Accel Partners, CS First Boston, The
Walt Disney Company, EarthLink, The Goldman Sachs Group, Kohlberg Kravis
Roberts, Soros Fund Management, Sprint Corporation, Sun America and Times Mirror
Inc.
"With approximately $2 trillion spent annually on local services, ValueStar is
well positioned to extend its lead in providing Buyers with key ratings and
access to the best local companies," said Steve Ledger, Managing General Partner
of eCompanies Venture Group. "ValueStar created the category of local service
company ratings and is developing buying content and utilities to expand and
dominate the category - a prerequisite for our venture fund partners."
About ValueStar: ValueStar is the premier rater of local service businesses in
America, helping to facilitate e-commerce with quality-conscious consumer and
business Buyers. Buyers look for the ValueStar Certified(R) Symbol when shopping
to quickly find the best (top-rated) companies. Armed with ValueStar's
independent customer satisfaction ratings, Buyers now have the confidence to
shop for relatively unknown companies on-line. To rate each local company,
ValueStar conducts a statistically valid number of customer satisfaction surveys
and audits their license, insurance and complaint status. Top-rated companies
must qualify to use the ValueStar Certified symbol as a powerful marketing tool
to differentiate them based on quality and value.
ValueStar's rating information is unique, branded content unavailable to Buyers
anywhere else. Besides shopping for local companies displaying the ValueStar
Certified symbol in forms of traditional media, consumers may log on to the
popular site to find top-rated companies by area and industry. To assure
accuracy and an unbiased independent rating, University partners audit the
customer satisfaction rating system. For more information about ValueStar
Corporation or its SmartShopper Service, please call 1-800-310-6661.
About eCompanies: Established in June 1999, Santa Monica-based eCompanies
combines an execution-driven Internet incubator, eCompanies LLC, with a
strategic venture fund, eCompanies Venture Group L.P.
eCompanies was created by Sky Dayton and Jake Winebaum to rapidly launch
Internet start-ups that will grow into profitable, long-lasting franchises.
eCompanies will provide the essential services start-ups need from a range of
disciplines, including strategy, finance, people, creative development,
technology, business development and marketing. eCompanies has hired blue-chip
executives in each discipline, both from the online and the off-line worlds, so
entrepreneurs can tap not just into Dayton and Winebaum's expertise, but a whole
team of "second generation" Internet veterans who've done it before. [I would
add a list of our portfolio investments, divided by b2c and b2b]
eCompanies' corporate headquarters are located in Santa Monica, CA. Additional
information is available on the company's Web site, http://www.ecompanies.com.
# # #
Forward-Looking Statements: This news release contains certain "forward-looking"
statements within the meaning of the Private Securities Litigation Reform Act of
1995, which provides a "safe harbor" for these types of statements. To the
extent statements in this news release involve, without limitation, expectations
for growth or new markets, estimates of future revenues, expenses, profits, cash
flow, balance sheet items, forecasts of demand or market trends for the
Company's services or any other guidance on future periods, these statements are
forward-looking statements. The Company assumes no obligation to update
forward-looking statements. See also the risks and uncertainties described in
the company's annual report on Form 10-KSB and other documents filed with the
Securities and Exchange Commission.