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Outside The Classroom Raises $2.5 Million in Venture Capital Financing

11/24/2003

Population-Level Prevention™ Pioneer Expands Market, Diversifies AlcoholEdu Product Line

NEWTON, MA - November 24, 2003 - Outside The Classroom, developer of the best-selling AlcoholEdu online prevention program, announced it raised an additional $2.5 million in venture capital funding to support market expansion and new product development. Mayport Venture Partners, a new investor based in Jacksonville, Florida, joined existing investors Sherbrooke Capital, CommonAngels, and AngelHealthcare Investors in the round of financing, which increases the total invested in the company to $8 million.

"The investment is a vote of confidence in Outside The Classroom's progress in pioneering a new market and setting the standard for effective online prevention," said Brandon Busteed, Founder and Chief Executive Officer of Outside The Classroom. "With AlcoholEdu working for students on more than 300 college campuses, we will be ready to introduce AlcoholEdu for High School across the country in early 2004."

AlcoholEdu attacks the problem of high-risk "binge" drinking on college campuses. In 2003, more than 50,000 students have taken the program at schools including Princeton, Dartmouth, Duke, University of Connecticut, Johns Hopkins, Villanova and Santa Clara University, making it one of the most popular courses on the Internet. A customized, two-and-one-half-hour interactive learning program that students take in the privacy of their own rooms, AlcoholEdu provides research- and science-based prevention in a non-opinionated format, emphasizing the personal and social effects of drinking and the many factors that influence decisions about whether, when and how much to drink. By engaging students in thinking seriously about the effects of alcohol on their academic performance, health and relationships, AlcoholEdu empowers them to make better decisions and change their behavior - providing the most effective primary prevention vehicle colleges have to effect measurable changes in the drinking culture on their campuses.

"Outside The Classroom is positioned to do extremely well with its groundbreaking solution to one of the biggest problems confronting secondary and higher education today - high-risk student drinking," said C. Daniel Rice, President and Chief Executive Officer of Mayport Venture Partners. "Failure to address this crisis directly in our high schools and colleges will undermine our children's future. With AlcoholEdu, Outside The Classroom is meeting an enormous and growing market need for innovative, affordable and effective online prevention programs."

Attacking the Student Drinking Crisis through 'Population-Level Prevention'

AlcoholEdu has pioneered and is successfully applying a new concept - Population-Level Prevention™ - which utilizes the Web to provide customized, tailored prevention programs to entire populations simultaneously, thereby enabling rapid changes in social norms and group culture that lead to short- and long-term reductions of harmful behaviors. Research has shown that when colleges require populations such as all first-year students, athletes, or members of Greek-letter organizations to take AlcoholEdu, dangerous drinking behavior moderates and alcohol consumption decreases - especially among high-risk drinkers.

Assessment data from more than 3,100 students at eight schools that required their entering first-year students to take AlcoholEdu in the fall of 2002 demonstrated that:

  • The proportion of students who abstained from alcohol increased by 10 percent, from 39.4 to 43.4 percent of the total, during a period of adjustment to college when the proportion of abstainers usually decreases dramatically.
  • Among students who continued to drink, the average number of drinks consumed per week declined more than 13 percent, from 9.9 before taking AlcoholEdu to 8.6 when measured a month after completing the program.
  • The proportion of episodic heavy drinkers - those having had five or more drinks at a sitting in the previous two weeks - decreased by 20 percent during the first months of college, a time that usually sees a doubling of the number of "binge" drinkers on campus.
  • The incidence of certain high-risk drinking behaviors, such as "pre-partying" - drinking at home before going out for the evening - decreased significantly.
  • And there were substantial improvements in healthier and safer behaviors, such as pacing drinks at one per hour and avoiding drinking when taking prescription medications.

Expanding the Market with New Solutions

"There are more than 4,000 two- and four-year colleges in the United States and more than 20,000 high schools. Every single school is in need of effective prevention programs that will lead their student populations to make better choices about drinking and other high-risk behaviors," said Mary Damkot, Principal of lead investor Sherbrooke Capital. "Outside The Classroom has established a dominant position in the large, new market for online prevention programs in colleges and is poised to lead the market for online high-school prevention programs as well."

In addition to AlcoholEdu for College, which provides primary Population-Level Prevention to entire populations, including entering first-year classes, Outside The Classroom has introduced AlcoholEdu for Sanctions, which provides secondary prevention programs for students who violate campus alcohol policies. The company is also collaborating with Mothers Against Drunk Driving (MADD) on a new product, AlcoholEdu for High School, which the two organizations will introduce and co-market nationally in early 2004.

"AlcoholEdu leverages the unique benefits of the online medium - it provides fast, cost-effective and simultaneous delivery of interactive programs to large populations of users, along with real-time data collection and measurement that immediately demonstrate efficacy and ROI," Busteed said. "The financing provided by our new and existing investors will enable Outside The Classroom to deliver its revolutionary new Population-Level Prevention solutions at an accelerated pace to customers in the secondary and higher education markets."

About Mayport Venture Partners and Sherbrooke Capital

Mayport Venture Partners, LLC, the new investor in Outside The Classroom, is a venture capital firm based in Jacksonville, Florida. Its mission is to serve as investor in and advisor to seed and early stage technology application companies operated by entrepreneurs possessing the energy, vision, passion and values to build successful enterprises.

Sherbrooke Capital Health and Wellness, LP, the lead investor in Outside The Classroom, is a private venture capital fund based in Wellesley, Massachusetts, with $100-plus million of committed equity capital, investing in privately held product, technology and service companies within the rapidly growing health and wellness industry. Sherbrooke Capital focuses on investing in the most dynamic segments of this industry, including prevention and self-care oriented diagnostics and healthcare-related consumer products and services.

About Outside The Classroom
Outside The Classroom (www.outsidetheclassroom.com) was founded by CEO Brandon Busteed to address critical behavioral health issues. The AlcoholEdu development team is led by Richard P. Keeling, MD, Vice President for Prevention Programs, and includes prevention professionals, assessment and evaluation experts, and leading scientists, including distinguished neuropsychologists and brain researchers Scott Swartzwelder, Ph.D., and Aaron White, Ph.D., of Duke University Medical Center. In addition to AlcoholEdu, universities nationwide are gaining insight about key campus health trends and environmental policy issues with TheHealthSurvey, a comprehensive, online assessment tool. Outside The Classroom is a partner to many prominent organizations, including Mothers Against Drunk Driving (MADD) and the National Association of Student Personnel Administrators (NASPA).