Crossroads Institute

Gary Larrowe

Extension Specialist

VA Tech

Fund Goal: $1,000,00025-40 investors

Minimum investment required $500,000 to complete fund.

Individual Investment

Minimum Investment $10,000

Maximum Investment $100,000

10% due with subscriptionBalance or part of balance due when

capital call is made by the Company.

Current Indications of Interest

Several Individuals in Carroll County have been used as barometers of

interest with positive feedback

Closing fund at $1.5 million or October 31, 2004 whichever comes first!

Crossroads Venture Capital Fund, LLC

Formal Investment Fund

Aggregate Intellectual & Financial Resources

Comprised of Accredited Investors

Managed by formal Board of Managers

Investment Motivation

1. Return on Investment

2. Angel Investor opportunities

3. Economic Development

4. Reduce Risk

5. No Sales Commission or other Dilution of Investment and possible tax credits

Investment Motivation

6. Limited Management Expenses, more in early years during due diligence

7. Some Legal and Accounting

8. Local Control

9. Regional Economic Power

Return on Investment

Ideally, the angel fund will have a blended portfolio and receive a weighted return of up to 20% compounded annually.

Expectations for Return on Investment within 5 years.

Startup Companies 10x Companies less than one year old 6x Companies one to five years 5x Companies five years plus 3x

Life of Fund

Will invest all funds less a reserve for operating expenses

Investment period 2-4 years

Expected term 5-7 years

End of term, close fund and disburse remaining assets

Open new fund if necessary

Crossroads Venture Capital Fund, LLC

Investment Focus to be Determined by Members:

Will consider most industries to include: Manufacturing, Technology, Life Sciences, Warehousing and Distribution

Will consider various growth stages of a business: Seed, Early Stage, Start-Ups, Expansions, Owner Transitions

Primary Investment Region: Service area of Crossroads Institute

Will consider investments outside the region.

Crossroads Venture Capital Fund, LLC

Investment Expenses to be Determined by Members:

Will consider reimbursement fee for due diligence efforts of members ( Preferably Non Cash: stock options or % of deal )

In some cases may hire due diligence to be performed

Goal to limit expenses to increase return on investment

ManagementMembers Investment Decisions Elect Board of Managers One vote per share Assist with deal flow Due Diligence

Board of Managers Direct Due Diligence on

investment opportunities Decision makers for the

Company Elected by the Members

Officers Elected by the Board of

Managers Day-to-Day mgmt

responsibilities

Crossroads Institute Administrative Support

Board of Managers: Cross Section of Disciplines

Financial/Banking

Accounting

Legal

Operations

Marketing

Human Resources

Risk Management

Medical

Industry Expertise Advanced

Manufacturing Technology Distribution Warehousing

Due Diligence

Crossroads Institute

Administrative Support Call meetingsAssist Officers and Board of Managers

Coordinate Due Diligence EffortsAssist with preliminary researchResources for research

Assist in other areas as neededStimulate Deal Flow

Critical Functions

Deal FlowCrossroads EntrepreneursEstablish connections with other Venture Funds and FirmsVenture Capital Firms

MEMBERS

Due DiligenceTeam Approach

Board of Managers and Members

Outside Expertise

Due Diligence Work Plan

Next Steps…

Within three months: Complete and Sign Subscription Agreement return with check for 10% of subscription amount to the Crossroads Institute

Close Private Placement Offering Memorandum 10/31/04 or at $1.5 million

Annual Meeting to Elect Board of Managers 11/04

Cash Checks 11/04

Begin Deal Flow

www.CrossroadsVA.org