While financing is at the core of our business, we provide a broad range of complementary services designed to ensure the success of portfolio companies. Mountaineer Capital has a working knowledge and relationship with a variety of job development, small business assistance, and state resource programs for small business. In addition, we are available to provide advice to portfolio companies on such important issues as banking and bankcard relationships, legal and accounting assistance, as well as a variety of administrative and marketing infrastructure contractors. We put these connections and capabilities to work for the companies in which we invest.

Assistance to Portfolio Companies - At key stages in a company's development, the venture capitalist adds value to the investment by working closely with management, often through board membership, to solve critical problems and seek new opportunities.

Obtaining board majority or ownership control of portfolio companies are not objectives. Management control is specifically not desired. We view such steps only as a matter of last resort, if necessary to protect our investment.

Form of Investment - Our goal is capital appreciation; consequently, investments are structured to participate in growing equity values while seeking to preserve capital in the event of adversity. Investments generally will be common stock, preferred stock, or debt which is convertible into common stock or is issued with warrants. Investment terms will average 5 & 7 years, but we understand prepayments may occur before expected maturity.

Size of Investments - Initial investments, in most cases, are likely to be in the $250,000 to $1,000,000 range. We may participate in several stages of financing as a company develops. The size of the investment at a specific stage should be sufficient for the company to achieve objectives that significantly reduce investment risk for the next stage of financing. In most instances, each financing should support the company's operations for at least one year.

Participation with Other Investors - We believe in acquiring a significant position in each of our investments to justify the effort of monitoring and business development assistance required as the enterprise matures. A "significant position" would be one large enough to entitle our group to a seat on the Board of Directors, if desired. We expect to originate, and to be a lead investor in, many investments. In a few instances, we may take a more passive role. But in most situations, we will associate with co-investors sharing our philosophy of active, involved venture capital investing.

Disposition of Investments - We expect to dispose of investments under the following alternative circumstances: (1) when the desired rate of return has been achieved and there are alternative uses of capital available with better potential; (2) where continued investment in a portfolio company no longer represents an acceptable risk/reward ratio; or (3) when the Fund's duration is approaching its close and a distribution of securities is not possible or advisable.

Acquisition by another company, sale to the company's management or its other investors, or liquidation of the portfolio company generally are the most common means of final disposition. Alternatively, when a portfolio company has established a public market for its stock, and has reached a level of maturity at which our influence is no longer needed to enhance the investment's value, The company's securities will normally be sold.

It is far more common for a venture capital-backed company to be acquired by larger corporations than to "go public." We believe that the frequent tendency on the part of large corporations to purchase new divisions rather than develop them internally will continue to provide the major source of liquidity for venture capital investments.