Got Equity? Startups Can Barter It for Products, Services & Skills

Got Equity? Startups Can Barter It for
Products, Services, and Skills to Fuel Growth

Online service will offer users products and professional services to
conserve cash and help startups leverage their inventory and human capital
to make business purchases

WESTON, MA – November 1, 2000 –New business ventures, and especially those on the cutting edge of the New Economy, frequently lack the resources to purchase what they need to build strong businesses. What cash-strapped startups typically do have is potential of great earnings at some future date; as a result, startups are finding that their need for resources—professional skills and services, office products, hardware, and the like—can most painlessly be paid for, not with cash, but in the form of stock, based on the future value of the company.

In response to that need, BarterItOnline.com, a B2B e-marketplace of barter, today announced the launch of an equity trade feature in its e-marketplace that brings businesses and entrepreneurs together to barter products, services, and skills. Barter has always been used by business as an efficient way of increasing sales and decreasing cash expenditures," said Richard L. Cravatts, CEO and founder of BarterItOnline.com.

And now doing business in the New Economy has itself opened up new opportunities for strategic bartering," said Cravatts. Dot com startups can effectively use barter to minimize cash outlays for web site development, marketing and public relations expertise, advertising, banner and other new media services, as well as legal, financial, and other personnel costs–all of which are normally paid for with expensive, borrowed cash in the early years of a business."

In fact," Cravatts said, the very nature of launching an Internet business, with its rapid and steep upfront marketing costs for acquiring visitors, means that barter is an especially necessary tool for dot com startups. BarterItOnline.com is convinced that by enabling startups to trade part of their equity and future earnings for what normally would be current cash outlays, we offer great flexibility to entrepreneurs, as well as a comfort level for the venture capital community who find so much of its early-stage investment being consumed by expensive marketing and advertising costs."

BarterItOnline facilitates trading between businesses and professionals by creating a virtual currency, ‘E-dollars, which members use to buy and sell at the site. The great benefit of using a common currency, of course, is that, unlike the case with online ‘swap sites, it offers great flexibility to users by enabling them to trade fluidly with any member of the BarterItOnline community. Purchases and sales are recorded by the site, which receives a cash transaction fee from the buyer at the time of the purchase.

BarterItOnline takes the unique step of creating a user-friendly business ‘portal, with tools and resources for doing business more effectively–in this case, however, all the tools are related to strengthening ones business through barter.

In a time when a whole new industry is being creating online, it seemed logical that options for bartering be applied to the New Economy," said Cravatts. For that reason weve included some innovative services on BarterItOnline.com to help businesses ramp up quickly, competitively, and in a way that conserves the sometimes limited infusions of venture capital."

BarterItOnline also provides business owners and entrepreneurs some other solutions for building their enterprises. The Barter Talent feature, for instance, makes a broad range of professional expertise–web designers, copywriters, business plan consultants, lawyers, accountants– available on trade.

The Barter RFP feature enables users to broadcast to a whole universe of sellers a specific project need they have that they would like to fulfill by bartering. Sellers can respond anonymously and choose to enter the transaction on a barter basis just once, as opposed to registering permanently on a barter site.

The Barter Rewards program enables companies to trade surplus or excess product or services for non-cash incentives with which to reward key employees, vendors, and clients.

The Online Learning and Executive Education feature of the site will allow companies to improve the quality of their workforces with a broad range of professional skills and development courses. BarterItOnline members can purchase the courses on barter, either for their personal use or as part of a company-wide benefits program.

The Media Buyer department of the site facilitates the buying and selling of advertising space, including banner ads, portal advertising, and co-branded marketing programs between web sites. The site also provides users the opportunity to exchange equity and stock in startups for advertising space and marketing needs.

About BarterItOnline.com

Founded in September 1999, BarterItOnline.com is a privately-held Boston-based        
e-marketplace for B2B barter. Its management team, with members from top financial, advertising, cultural, and high-tech posts, has been active in using bartered media to leverage the growth of regional businesses, while helping them to conserve cash and optimize sales. Initial funding for the company came from Publications Management Company, a regional publishing firm with a bartered media division.

The use of barter as a strategic business tool is well-established. The Wall Street Journal, for instance, recently noted that ‘officially reported barter totals an estimated $16 billion a year, or 0.2% of the total U.S. economy, and those numbers do not even reflect the appearance of online trading. According to a recent study by PricewaterhouseCoopers and the Internet Advertising Bureau, barter ‘represented 7 percent of the $693 million in Internet advertising recorded in the first quarter of 1999.

BarterItOnline is located at: http://www.barteritonline.com.