Needham Capital Partners (NCP) manages funds that primarily invest in the equities of private growth companies. We look to partner with outstanding management teams and help them build their companies and achieve their objectives. Our focus is entirely on long-term equity capital appreciation. We concentrate our investment activity in growth industries in which our individual Limited Partners, our General Partners and the professionals at our affiliate, Needham & Company, LLC have experience and expertise.

The resources of our Limited Partners and Needham & Company enable us to add value beyond our invested capital and make NCP a preferred partner in our selected industries. The funds in our partnerships come from the General Partners, our affiliates and our Limited Partners, who are primarily the founders, current or retired chief executives and senior management of leading companies in the technology and biotechnology life-sciences industries.

NCP is part of Needham Asset Management, which manages over $1 billion in funds that invest in public and private equities. Our most recent fund is Needham Capital Partners III, L.P., which closed in early 2001, having raised $240 million of capital from its Limited Partners. Additional funding is available through a subsidiary. It is the successor to two successful prior funds—NCP (formed in 1994) and NCP II (formed in 1998).

A significant strength of NCP is the active involvement of our Limited Partners. The capabilities, relationships and ongoing involvement of these entrepreneurs in NCP distinguish us from many other equity groups. Our Limited Partners are expected to contribute to the success of our portfolio companies and be available to them, and they have shown great willingness to do so. The managements of our portfolio companies benefit from access to the time, experience and contacts of these Limited Partners, many of whom have themselves founded and built major companies. This assistance includes serving on boards of directors, acting as a sounding board, providing market feedback and making introductions to potential customers and corporate partners. As needed and requested, this assistance may include intensive hands-on help in recruiting key employees, coping with business challenges and collaborating on strategy development and implementation. We encourage portfolio companies to use all of our resources, including those of our Limited Partners.

One advantage of our investor base is that we are under no pressure to produce immediate cash returns. Our Limited Partner investors are themselves entrepreneurs. They have built businesses; some have founded and many have been instrumental in building world-class companies. They understand better than most institutional or non-operating investors the difficulty, length of time and tremendous effort needed to grow a solid and lasting business. Our investors certainly expect above-average returns, but they are very patient. As a result, we have a long time horizon. We bring to our portfolio companies a keen appreciation of the partnership model of leveraging resources of a smaller growth company with key vendors, customers and affiliates to speed growth and improve competitive position. We encourage portfolio companies to consider and implement such relationships. We offer portfolio companies our own considerable experience and skill in structuring and negotiating corporate alliances.

We also offer to portfolio companies a valuable understanding of the public equity markets and the requirements for a successful public company. We assist portfolio companies in preparing to go public, providing objective financing advice. We approach the initial public offering process with a recognition that an IPO is not the end objective for a company but only the beginning of a process for better achieving long-term business objectives.