OUR TYPICAL INVESTMENTS

A TYPICAL INVESTMENT IS WHERE VENCON:

• Is a lead or co-lead investor
• Takes an active role as an investor
• Usually takes a seat on the company's Board of Directors
• Assists company management in strategic planning issues

Typical investments for Vencon will range from $500,000 to $ 3 Million per transaction. In most cases, the investment will be in the form of equity or a debt instrument that is convertible into equity. We will co-invest with other investment firms; however, in some special cases, Vencon may be the only investor. In many cases, the money will be staged into the business based upon the needs of the company and agreed upon milestones.

Vencon generally looks to realize a return on an investment in a four to seven year period after each investment. Traditional exit strategies include sale of the company, an initial public offering or a repurchase of Vencon's ownership position by the company or another investor.

SYNERGY WITH STRATEGIC PARTNERS

We work closely with our strategic partners to focus on investments that may work well with our partners' business strategies, such as:

• Providing synergistic technology
• Providing a window into leading edge technology
• Creating new products and services
  

RENEWABLE ENERGY (GREEN TECH)

There are unique private equity opportunities in new energy. This sector is in a state of reorganization related to the rapid growth and market enthusiasm for a group of highly disruptive technologies sometimes called "Green Tech" or "Clean Tech." Included in the group is distributed and dispersed power generation and co-generation technologies, the smart grid, power quality and reliability technologies, and e-business procurement and "e-energy" initiatives that include online energy procurement and enterprise energy management.

Although some of these technologies such as photovoltaics, wind, hydrogen, and fuel cells have been developed for decades, significant commercialization efforts began in the 1970s, primarily due to environmental and sustainability concerns. Currently in its second wave, many "power tech" companies are beginning to realize significant revenues, some have become profitable, and many have gone public.

The increasing demands for power generation dispersal impacted by security concerns, the widespread adoption of the Internet, and the use of computer technology in manufacturing have increased the demand for highly reliable and high quality power sources. Additionally rapid growth on the demand side, sluggish growth on the supply side, and environmental concerns have led to substantial growth and market place interest.

New Energy/power technology groups together a large number of technologies that provide solutions to the following problems:

1) Distributed power generation

Distributed power generation has succeeded in providing hospitals, telecommunications companies, data centers, and manufacturing plants protection from power disturbances and continuous operations thus avoiding costly factory shutdowns and network failures. Additionally, distributed power has been embraced by rural utility cooperatives as reinforcement to the existing power grid, by heavy industry for natural resource exploration and extraction, and by the military for field activities. These solutions are provided by a disparate group of technologies that include proton-exchange membrane (PEM) fuel cells, wind power, micro-turbines, flywheels, superconductors, ultra-conductors, biomass, and solar.

2) Dispersed power generation

Dispersed generation is frequently used by utilities companies to "load balance" centralized power generation; it is done to compensate for poor planning in areas that have experience significant growth since the construction of the local power grid; and it is used to strength power flows on the existing grid at points of greatest stress. Additionally disbursed generation is used to exploit location-specific renewable opportunities (e.g. hydro and wind), to supplemented traditional energy sources, and to power micro-grids for campuses, technology parks, and specific facilities that either require continuous operation or are unable to connect to centralize power transmissions.

3) Power quality and storage

Power quality and storage solution cover a wide rage of technology:

Short-lived power solutions (e.g. capacitors) that are designed to provided short-term solutions to brief power failures. Transitional power while switching from the grid to a local co-generation sources Even out the quality of power disrupted by spikes, surges, and sags on the existing grid. Storage of electricity bought during off-peak times for use during higher peak windows. Generally this category focuses on superconductors, emerging battery technology, and advanced switches.

PRIVATE EQUITY OPPORTUNITIES

Based on the make-up of the business inefficiencies of the new energy industry, opportunities exist in this "convergence" wave of the metaphorsis of the industry as it becomes one of the largest in the early years of the 21st century. Opportunities regard combining companies which serve the same market, are affected by comparable market impetus and access a common customer base. Vencon believes many new energy companies are basically one product businesses without the proper management, well though out strategies and vision to be successful as the dynamics of the industry grow and change.

VMI has more than 200 new energy companies in its data base which it analyzes from the prospect of investing in superior transactions based on successful management teams and exceptional income growth.