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VI. DEAL SOURCING & INVESTMENT PROCESS

The Fund Managers have a proactive approach to deal sourcing, which focuses on both private and public opportunities. The established and proven sourcing activities seek to identify the most compelling healthcare technology investment opportunities, at the most attractive time points for venture capital investment. The Fund Managers’ goal is to identify opportunities that are based on the most interesting novel and proprietary technologies, but place their emphasis on being positioned for investing in these technologies in the round(s) that offer the most attractive risk-adjusted returns potential. These investment opportunities are identified through a number of parallel efforts, including:

• Systematic tracking of private and public companies that have product programs and technologies targeting disease areas and biological targets of high interest that are approaching key value inflection points. Current activities include comprehensive screening of companies with programs targeting high unmet medical needs where the strength of the science coupled with a rapid and lower capital intensity development path, provides a compelling risk-reward case for investment. At the present time, the Fund Managers are tracking a biopharma investment universe of approximately 1,000 mid-late stage private and small-cap public companies, many of which are in therapeutic areas of specific interest to the Fund Managers (e.g. Oncology, Infectious Disease, Central Nervous System, etc.);

• Continuous contact with a network of current and former portfolio company management teams;

• Networking with current and former senior management team members from leading pharmaceutical, biotech, medical device, and HIT companies to understand their strategic priorities and to identify assets/programs that may become available for spinouts or structured financings;

• Staying up to date and in contact with leading academic thought leaders working in NLV’s fields of interest;

• Active coverage of major investor, medical and scientific meetings; and

• Working closely with other venture capitalists with overlapping interests to ensure NLV sees the broadest range of high quality opportunities and are positioned for working with the strongest syndicates.

A key success factor behind the Fund Managers’ deal sourcing activities is a strong network of entrepreneurs, industry executives, renowned clinicians, leading academic scientists, other venture investors, and experienced consultants. The Fund Managers believe that this network plays a critical role in helping to identify the most interesting opportunities, bringing the leading resources to bear to assist in due diligence, and in providing important technical and recruiting support in building portfolio companies. The Fund Managers continuously invest time and energy in updating and building this strong network to ensure access to the managers and thought leaders that are the industry’s leaders in the sectors of interest.

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CONTROL NUMBER 257 - CONFIDENTIAL

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