Venture Capital

Blackwater Capital Group, L.L.C. acting as general partner has successfully completed and distributed two venture capital funds; Blackwater Capital Partner, L.P. commenced in 1998 and Blackwater Capital Partners II, L.P. in 2000 and is in the process of establishing its third fund focusing more so on small cap Special Situations anticipated to close in the first quarter 2007.

Our collective expertise and skills are rooted in the analytical discipline of venture capital investing. Within the venture capital group, we focus on sectors with the potential to generate rapid growth. Typically, this includes industries in which there are high rates of change, often driven by the emergence of new and disruptive technologies. Technology is, therefore, central to our core portfolio, provided that there is a clear commercial opportunity combined with rapid growth potential.

The highest returns are always achieved by recognizing potential for significant capital appreciation before others, utilizing expertise in efficiently evaluating these opportunities, and creatively structuring the right investment. Blackwater Capital Special Situations Fund will be well capitalized focused on identifying, evaluating opportunities, and structuring direct equity investments, mezzanine financing or venture debt lending. The fund will be established to provide debt and equity financing to micro-cap or small-cap companies and to become a strategic partner, involved in the development and growth of select companies through more than merely an infusion of capital.

The rapid expansion of financial instruments, shifts in the availability of capital, the variety of political climates and regulatory concerns, and the unpredictability of the national financial markets all point to the need for the expert assistance, and investment, which Blackwater Capital Special Situations Fund can provide to its partners. Our mission is to assist small and emerging companies in maximizing their growth potential by providing sophisticated financing solutions and strategic advice that is individually tailored to meet each client's short and long-term goals.

Management of the Blackwater Capital Special Situations Fund has extensive expertise in structuring transactions under Regulation D, SCOR, Rule 144A, Reg. A, Reg. S, and other public or private direct offerings, as well as commercial lending, mezzanine financing, commercial paper, and subordinated debt transactions. Our structures provide an exit strategy for investors with short or long-term holding periods. By facilitating the repayment of debt with equity enhancements, or resales of shares and warrants, management strives to deliver a solid and reliable rate of return to the investors and to the fund itself.

For the micro-cap company requiring modest amounts of capital, sometimes to be used to facilitate a larger round of financing or to facilitate a pending transaction, there are limited number of opportunities to acquire equity or short-term debt funds in a manner that is optimum to the company seeking the growth capital. This less than optimum position may lead to onerous valuations, loss of board of director seats, extensive time and/or documentation, and excessive costs or expenses. Blackwater Capital Special Situations Fund provides its clients with the necessary amounts of capital, for less cost, more efficiently, and strategically structured to assist them in reaching their immediate financial goals or to facilitate pending transactions. By funding the necessary capital, and providing strategic advice, Blackwater Capital Special Situations Fund expects to achieve superior yields in return for high risk lending and investing activities in its portfolio companies.