Copyright © 2007 All right reserved

Property of Gladstone Investment, 1521 Westbranch Drive, McLean, VA 22102

Gladstone InvestmentGeneral Presentation as of June 30, 2007

Presented by: David Gladstone, Chairman

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Legal DisclaimerThis presentation may include forward-looking statements. These forward-looking statements include comments with respect to our objectives and strategies, and the future results of our operations and our business.

However, by their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. The risk exists that these statements may not be fulfilled. We caution readers of this presentation not to place undue reliance on these forward-looking statements as a number of factors such as fluctuations in interest rates and stock indices, the effects of competition in the areas in which we operate, and changes in economic, political, regulatory and technological conditions and those listed in “Risk Factors” section of our filings made with the SEC, could cause future company results to differ materially from these statements.

This presentation does not constitute an offer to sell or solicitation of an offer to purchase any securities of Gladstone Investment. Nothing in theses materials should be construed as a recommendation to invest in any securities that may be issued by Gladstone Investment or as legal, accounting or tax advise. An investment in securities of the type descried herein presents certain risk. Before making a decision to invest in any securities of Gladstone Investment, a prospective investor should carefully review all publicly available information respecting Gladstone Investment (including the risk factors described therein) for such securities and consult with its own legal, accounting an, tax and other advisors in order to independently assess the merits of such an investment. Gladstone Investment is managed by Gladstone Management Corp. (“Adviser”), and affiliate. None of Gladstone Investment or any affiliate of the Adviser makes any representation or warranty, expressed or implied, as to the accuracy or completeness of the information contained herein and nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance.

The information contained in this presentation is summary information that is intended to be considered in the context of our SEC filings and other public announcements that we may make, by press release or otherwise, from time to time. Accordingly, reference is made to Gladstone Investment’s public available filings with the SEC for more complete discussion of Gladstone Investment’s business and investment activities. We undertake no duty or obligation to publicly update or revise the information contained in this presentation. These materials contain information about Gladstone Investment, certain of its personal and affiliates and its historical performance as well as general information about he market. You should not view information related to the past performance of Gladstone Investment or information about eh market, as indicative of Gladstone Investment’s future results, the achievements of which can not be assured. Further, an investment in Gladstone Investment is discrete from, and does not represent an interest in , any other Gladstone entity.

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What Is Gladstone Investment? A company that:

— Makes debt and equity investments in seasoned, private small and medium-sized businesses in buyout transactions

— Generates income from:– Current income from interest on loans– Current income from fees– Other income: preferred stock dividends and

capital gains— A pass-through company that does not pay

corporate taxes— Seeks to pay increasing dividends

Currently monthly dividend is $0.75 per share ($0.90 per year)

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Our Objectives Investment Objectives:

— Generate a strong return by lending and owning equity in private small and medium-sized businesses,

— Build a portfolio of high quality performing loans, — Have significant ownership in the business and— Increase the distributions to shareholders

Invest in variable rate loans that generate cash income to be paid to shareholders as monthly dividends

Target return is 15% un-leveraged before capital gains

Avoid undue risk in order to preserve assets

Maintain and grow the experienced management team

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Experienced Management TeamDavid Gladstone, CEO

Current Chairman and CEO of three Gladstone public companies

Past Chairman of Allied Capital Corp, a public company investing in loans and subordinated debt

Past Chairman of American Capital Strategies, a public company investing in subordinated debt and buyouts

Invested in more than 500 investments

Written about by Peter Lynch in his book: Beating the Street

MBA from Harvard Business School, MA from American University, BA from University of Virginia

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Experienced Management Team

More than 25 Years Experience in Managing Businesses

Currently COO of all three Gladstone companies

Previously on the acquisition team of James River Corp. as it grew from $200 million to $7 billion in revenues

Group VP of two operating divisions at James River with 2,300 employees, $440 million in revenue and 14 locations

After James River, was CEO of two businesses with 800 employees, $250 million in revenue and 4 locations

Five years as a consultant with McKinsey & Company

MBA from Harvard Business School, BSE in Aeronautical Engineering from Princeton University

Terry Brubaker, COO

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Experienced Management Team

More than 20 years experience in portfolio investing

Chief Investment Officer of the three Gladstone companies

Head of all investing, due diligence, reviewing hundreds of opportunities and supervising the due diligence process on each new investment

Past EVP at Allied Capital, making loans and investments in middle market companies

Past manager of Camden Partners and Columbia Capital funds, investing in communications, healthcare and business services

MBA from University of Virginia Business School, BA Degree in Economics from Vanderbilt University

Chip Stelljes, Chief Investment Officer

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Experienced Management Team

Our Managing Directors above all work for the Adviser and have been active in the debt and equity investments for an average of 20 years.

Behind our Managing Directors are a team of principals, associates, analysts, controllers, and others members that keep us growing.

Paul GiustiManaging Director

32 Years Experience

Joe ButeManaging Director

30 Years Experience

Michael BrownManaging Director

24 Years Experience

Ginger RollinsManaging Director

18 Years Experience

John FrealManaging Director

25 Years Experience

Bob PierceManaging Director

23 Years Experience

Laura GladstoneManaging Director

10 Years Experience

Jennifer SimpsonManaging Director

9 Years Experience

Bob CorryManaging Director

15 Years Experience

John WellerManaging Director

30 Years Experience

David MeierManaging Director

23 Years Experience

Buzz CooperManaging Director

20 Years Experience

Chris MasseyManaging Director

15 Years Experience

Bill CookeManaging Director

15 Years Experience

John SateriManaging Director

18 Years Experience

Brian EickManaging Director

10 Years Experience

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Growing the Total Assets of all Gladstone FundsNumber of Staff in Box above the Calendar Year

0

200

400

600

800

1000

1200

2001 2002 2003 2004 2005 2006 Q2 2007

$ Millions

56

46

32

22

15127

Does not include $340 million of loans that paid off

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Track Record: Gladstone Investment Debt and equity investor in small and medium-sized businesses

IPO in June 2005 at $15 symbol GAIN (NASDAQ)

Paying dividends of $0.075 per month, $0.90 per year

Raised $230 million in equity and is borrowing under a credit line of $200 million further to grow the assets

At June 30, 2007 have invested $145 million in 7 buyouts and $175 million in 46 senior syndicated loans

Solid portfolio: All loans paying as agreed except one syndicated loan

Solid dividends: Never missed a dividend and never cut a dividend

Past performance is not an indication of future performance

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Earnings by Calendar Years

$0

$2

$4

$6

$8

$10

$12

2005 2006 1/2 2007(est)

Millions of dollars

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Annual Total Cash Dividends and DistributionsCalendar Year Distributions

$0.00$0.10$0.20$0.30$0.40$0.50$0.60$0.70$0.80$0.90

2005 2006 1/22007

Dollars per share

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Dividend HistoryQuarterly Per Share

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

2005 2006 2007

Mar

June

Sept

Dec

Dollars per share

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Target Different Size CompaniesPurchase Price as a Multiple of Earnings

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Gladstone Market Opportunities

Focus on long-term debt and equity for private small and middle market companies

Use the deal flow from long-term relationships with business brokers and senior lenders

Concentrate on conventional businesses with real cash flow that can weather a downturn in the economy

Build a well diversified portfolio of good investments in small and medium-sized companies

Use a conservative capital structure with lower leverage than traditional finance companies: less than 1 to 1 leverage

Our Strategy: To acquire with management smaller private businesses and finance their growth

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Gladstone Market OpportunitiesAreas Where the Opportunities Exist

Light Manufacturing

-Manufacturing of non-high technology items (Examples: (1) industrial doors and (2)rail road car components.

Specialty Manufacturing

-Special purpose businesses (Examples: a manufacturer of pipes and fittings for liquid and gas storage and transportation in very cold applications.)

Business Services

-Special service companies (Examples: A company that provides water to workers in industrial work places.)

Specialty Situations

-Special purpose selling (Examples: school bus dealerships that sells to public and private schools)

No high technology or finance companies

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Gladstone Business Model

Characteristics of our Investments

Term: We are long-term capital providers for five or more years

Variable rates: We use variable rates where possible to mitigate the changes in interest rates

Strong rates: Seeking current pay of 10% to 12%

Added income: Expect to have dividends from our preferred stock investments and some fees

Gains: If the business is sold there should be a strong capital gain

Security: Loans generally secured by the assets of the business

Flexible: Provide funding for additional financing if needed

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Gladstone Business Model

Characteristics of our Portfolio

Cash flow Proven cash flow

Management Experienced team in place

Growth Potential to grow cash flow

Exit Strategy If we exit there should be a capital gain

Company Characteristics

Range of investments $10 to $20 million

Business sales $25 to $500 million

Ratings parameters Risk rating criteria developed internally

Investment by management We require management to co-invest with us

Conditions

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Chase Doors

Management sought to purchase the company.

Strong steady income to pay interest and in turn monthly dividends to Gladstone Investment shareholders.

Long-term company to hold in portfolio.

Chase Doors is the world's oldest, largest, and most progressive manufacturer of double-acting impact traffic doors.

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Auto Safety House

Largest school bus dealer in Phoenix, AZ and Las Vegas, NV.

Also largest bus mechanical shop in those locations.

Strong steady profits and a nice company to own for the long-term.

An LBO fund owned a bus company and wanted to divest the business so Gladstone Investment purchased it with management.

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A Stucki Company

A business that had been family owned for 100 years.

Non-family management wished to buy the company.

We provided all the debt and equity for the buyout.

Management also made a significant investment in the business.

Manufacturing rail road car parts and accessories

This business should pay interest and dividends to our fund for many years.

A good solid business with a great management team that should be in our portfolio for many years.

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Acme Cryogenics Corp.

A business that had been owned by a family

Non-family management wished to buy the business

We provided all the debt and equity for the buyout.

Management also made a significant investment in the business.

Manufacturing of manifolds and pipes for industrial gasses

This business should pay interest and dividends to our fund for many years.

A good solid business that should be in our portfolio for many years.

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High Quality of Assets and Income

Conservative Investors

Quality of Assets:

-Standard & Poors values most of our loan portfolio each quarter

-Positive IRR on investments since inception

-Currently have no expected loan losses in the portfolio

Quality of Income:

-Avoid non-cash income from Paid-In-Kind interest (PIK) – results in predictable cash income

-Not dependent on capital gains to pay dividends – income is derived from monthly interest payments

Preservation of Capital:

-Make loans that are based on variable rates with floors on how low the interest rate can decline

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Outlook for this Company

Strong deal flow of investment opportunities

Adding more investment professionals

Should there be a recession, the portfolio should stand up to the difficulties

Seeking to increase the Net Investment Income

Seeking to increase the dividend

Summary: the outlook is good for 2007 and beyond

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Investment Highlights

Experienced Team: Operating team has a successful track record of underwriting small private businesses

Successful CEO with a reputation demonstrated by the success of nine public companies none of which ever missed a dividend or reduced the dividend.

Good Business Model: Emphasis on deal flow from strong relationships with business brokers and senior lenders

Conservative Underwriting: Focused on the cash flow of the small value-oriented business

Good Market Opportunity: Right time in the business cycle to buy smaller companies and generate good returns

Focused on paying monthly dividends to shareholders

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Why Own Gladstone Investment?

Emphasis on capital preservation

Striving to produce consistent monthly dividends

Seeing to increase dividends over time

If successful in increasing the dividend then the stock price should increase especially if interest rates are falling

Focused on investing in businesses with steady cash flow

Management has a significant ownership in the stock

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Historical Financials For the years ending 2006 to 2007 – Fiscal year is March 31 $ in Millions (except per share data)

See the full financial information presented in the annual report and form 10K including the

footnotes and other sections

2007 2006

Income $17.3 $7.4

Net Expenses $6.1 $1.5

GROSS INCOME 21 21 Net Investment Income $11.2 $5.9

NET OPERATING INCOME (Paid to Investors) 19 19 Appreciation (Depreciation) (3.9) 0.1

Net Increase in Net Assets $7.3 $6.0

Net Increase in Net Assets Per Share Diluted $0.44 $0.37

Net Investment Income Per Share Diluted $0.67 $0.36

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Current Financials For the 3 months ended June 30, 2007 $ in Millions (except per share)

Income $6.3

Expenses $3.4

GROSS INCOME 21 Net Investment Income $2.9

NET OPERATING INCOME (Paid to Investors) 19 Realized and Unrealized Appreciation or Depreciation $5.4

Net Increase in Net Assets Resulting From Operations $8.3

Increase in Net Assets Per Share Diluted $0.50

Net Investment Income Per Share Diluted $0.17

Dividends Per Share for three months $0.225 See the full financial information presented in the form 10Q including the footnotes and other sections

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Current Financials Balance Sheet as of June 30, 2007 $ in Millions

Loans and Investments at fair value $321.6

51 Cash

Due from Custodian

Misc.

34.6

4.4

2.5

Total Assets $363.1

GROSS INCOME 20 Borrowing under line of credit

Misc.

Total Liabilities

134.4

1.3

135.7

Net Worth $227.3

NET OPERATING INCOME (Paid to Investors) 19 See the full financial information presented in the form 10Q including

the footnotes and other sections