New Capital Partners NCP is a holding company for various investment funds that serve the dual botto

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Overview

• New Capital Partners (NCP) is a holding company
  for various investment funds that serve the dual
  bottom line goals of investment returns and
  economic development. These programs have a
  central theme of job growth / retention.
• NCP Private Equity Fund, LP
• Waveland NCP Alabama Ventures, LP
• Waveland NCP Texas Ventures, LP

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CAPCO - Background

• Certified Capital Companies (CAPCO) are
  state-sponsored, private venture capital
  companies formed to increase the availability of
  growth capital for small businesses.
• Investment capital is raised through issuance of
  Certified Capital Notes to insurance company
  investors.
• Dollar for dollar tax credits issued by state.
• CAPCOs invest debt and equity much like
  traditional venture capital firms.
• To date, eight states and the District of
  Columbia have collectively passed approximately
  2.41 billion in CAPCO legislation

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CAPCO Sample Program

• A CAPCO Program is created by the State
  Legislature which passes a CAPCO Act setting
  forth the operating guidelines for the program.
  Most enabling statutes are substantially similar
  but have varying provisions regarding the vesting
  of tax credits. A typical CAPCO Act may be
  summarized as follows
• CAPCO Act authorizes premium tax credit.
• Each CAPCO must have an initial capitalization of
  500,000.
• Each CAPCO must have two principals or employees
  with money management experience in the venture
  capital industry.
• Each insurance company investor may claim a
  maximum of 15 of the states total tax credit
  allocation amount.

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CAPCO Sample Program

• To maintain certification, a CAPCO is required
  to
• Make investments in Qualified Businesses.
• Invest 30 of Certified Capital within 3 years,
  and 50 within 5 years.
• No more than 15 of Certified Capital may be
  invested in any single portfolio company.
• Comply with various regulatory compliance and
  reporting requirements.

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Texas CAPCO Program

• 200 Million Program
• 10 Participants
• Funding took place in June, 2005

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Texas CAPCO Program

• Waveland NCP Texas Ventures makes investments of
• 500,000 - 3,000,000
• Equity or Debt
• CAPCO cannot own 50 or more of a qualified
  business in which it invests.
• No more than 50 of investment can be used to
  refinance existing debt.

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Texas CAPCO Program

• Qualified Businesses Are
• Headquartered in Texas.
• Have less than 100 employees.
• 80 of payroll in Texas.
• Is primaily engaged in
• Manufacturing, processing, or assembling
  products.
• Conducting research and development.
• Providing services.

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Texas CAPCO Program

• Qualified Businesses are NOT primarily engaged
  in
• Retail sales.
• Real estate development.
• The business of insurance, banking, or lending.
• Professional services.

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Texas CAPCO Program

• 50 of investments made in early stage
  businesses
• Less than 2,000,000 in revenue or
• Be engaged in new product or service offerings
  (RD)
• 30 of investments in Strategic Investment
  Areas

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Summary

• CAPCO program is 200 Million job creation
  program.
• NCP makes investments of 500,000 - 3,000,000.
• Companies are based in Texas and have certain
  characteristics.
• David Landis
• Senior Associate
• New Capital Partners
• 214.871.5414
• david_at_newcapitalpartners.com