As part of an investment initiatives in the information services sector, Generation had proactively targeted the online classifieds area. We believed that the internet would dramatically change the dynamics of the classifieds business. The internet allowed for a faster, less expensive, real-time experience for both sides of the classifieds transaction. For example, in the online recruitment space, Generation believed that Hotjobs offered a valuable alternative to newspaper classifieds or traditional recruiters because it: 1) offered job seekers detailed and current information on job openings with value-added tools to help them monitor and control their job searches; 2) ensured their privacy as job seekers could block current employers from viewing their resumes, and; 3) provided employers a constantly updated pool of applicants with workflow management tools to streamline the recruiting process.

In May 1999, Hotjobs selected Generation as its lead investor in its first round of financing. Generation led a $16.2 million round with a $10.5 million investment and joined the company’s Board of Directors. As the Company’s first outside investor, Generation worked closely with Hotjobs to refine its strategy, bolster the management team, build the brand, and implement financial controls. Generation introduced the company to Phil Guarascio, Vice President of Marketing at General Motors and one of the largest buyers of advertising in the world, who agreed to join Hotjobs’ Board. Generation also found and recruited the Company’s Vice President of Sales, who more than doubled the company’s sales force in six months. We also introduced Hotjobs to over 20 new customers and several acquisition candidates. As the company grew, Generation leveraged the investment banking background of several of its partners in helping the company manage its IPO and subsequent secondary public offering, raising over $140 million in equity capital.
   

At the time of Generation’s investment, HotJobs was one of the many similarly-sized online recruitment companies vying for market share. Over the next two years, through management’s efforts, HotJobs emerged as one of the two major players in the space. Since its founding, HotJobs has helped hundreds of thousands of applicants find more fulfilling, often higher paying jobs, and has allowed employers to efficiently hire qualified applicants to fuel their growth. We are proud to have financed HotJobs, as it truly provides a “win-win” for both of its constituencies. At the time of our investment, HotJobs quarterly revenues were $1.9 million. By the time we exited the investment, revenues had increased to an annualized rate of over $120 million. In August 1999, HotJobs (NASDAQ: HOTJ) completed its IPO, raising $24.0 million. The company raised an additional $121.5 million in a secondary offering in November 1999, using the capital to expand operations and to acquire Resumix. By the third quarter of 2001, HotJobs annual run rate revenue had grown to $125 million. In July 2001, we distributed our HOTJ stock to our Limited Partners and in December 2001, HotJobs was acquired by Yahoo! (NASDAQ: YHOO) in a stock and cash transaction valued at over $450 million.