PROTO LABS INC (PRLB) IPO

We estimate that the net proceeds to us from the sale of the shares of common 
stock offered by us will be approximately $62.0 million based upon the initial
public offering price of $16.00 per share, after deducting estimated 
underwriting discounts and commissions and estimated offering expenses payable
by us. If the underwriters fully exercise their over-allotment option, we 
estimate that the net proceeds to us from this offering will be approximately 
$71.6 million. 

We currently intend to use the net proceeds we receive from this offering for 
working capital and other general corporate purposes. We may also use 
a portion of the net proceeds to in-license, acquire or invest in 
complementary businesses, technologies, products or assets, as well as add 
incremental capacity. However, we have no current commitments or obligations 
to do so. Pending use of the net proceeds from this offering, we intend to 
invest the net proceeds in short- and intermediate-term interest-bearing 
obligations, investment-grade instruments, certificates of deposit or direct 
or guaranteed obligations of the U.S. government. 

By establishing a public market for our common stock, this offering is also 
intended to facilitate our future access to public markets.

The market for low-volume custom parts manufacturing is fragmented, highly 
competitive and subject to rapid and significant technological change. Our 
potential competitors include: 

o     Captive in-house services . Many larger companies undertaking product
      development have established CNC machining, injection molding or additive
      rapid prototyping capabilities internally to support the prototyping
      requirements of their product developers. 
 
o     Other custom manufacturers. There are thousands of machine shops and
      plastic injection molding suppliers worldwide. The size and scale of these
      businesses range from very small specialty shops to large, high-volume
      production manufacturers. 
 
o     Alternative manufacturing vendors . Various manufacturing processes,
      other than CNC machining and injection molding, are offered by other vendors.
      We generically refer to the most well known of these processes as “additive
      rapid prototyping,” which have been commercialized under labels such as
      stereolithography, selective laser sintering, fused deposition modeling and
      3D printing. 
 
We believe that the key competitive factors in our industry include: 

o     Speed: turnaround time for quotations and parts; 
 
o     Price: mold and piece part pricing; 
 
o     Quality: dimensional accuracy, surface finish, material properties,
      color and cleanliness; 
 
o     Capability: size and dimensional complexity of the part, materials
      supported and post-processing provided; 
 
o     Capacity: ability to support multiple part designs in parallel; and 
 
o     Service: overall customer experience, from web interface to post-sales
      support. 
 
We believe that we have competitive strengths that position us favorably and 
have enabled us to become a leader in our markets. We also believe that 
substantially all of our current direct competitors are relatively small in 
terms of size of operations, revenue, number of customers and volume of parts 
sold, and generally lack our technological capabilities. However, our 
industry is evolving rapidly and other companies, including potentially larger
and more established companies with developed technological capabilities, 
may begin to focus on low-volume custom parts manufacturing. These companies 
could more directly compete with us, along with our existing competitors, and 
both could also launch new products and services that we do not offer that 
may quickly gain market acceptance. Any of the foregoing could adversely 
affect our ability to attract customers.