137 Ventures Management LLC

Item 5 – Fees and Compensation

A.     Fee Schedule
The fees and compensation payable to 137 Ventures are negotiable and vary among the
Funds. However, the range of compensation is generally as follows:
       1.      Management Fee
With respect to the Funds, 137 Ventures typically receives a quarterly asset-based
management fee calculated as a percentage of each Investor’s capital commitment, payable
quarterly in advance. The management fee is generally between 0% and 2.5%.
       2.      Performance-based Fees
Each Fund’s General Partner or Managing Member, as applicable, generally receives a carried
interest equal to a percentage of all realized profits, as described more fully in each Fund’s
Governing Documents. The carried interest is generally subject to a giveback at the end of life
of the Funds if the General Partner or Managing Member, as applicable, has received excess
cumulative distributions.
The carried interest will only be charged to accounts of those Investors who are “qualified
clients” as defined in Rule 205-3 of the Investment Advisers Act of 1940, as amended (the
“Advisers Act”).
In addition to the Firm’s management fees, carried interest, and other expenses outlined in
the Funds’ Governing Documents, certain Funds pay management fees, carried interest, and
other expenses to the general partners or managing members, as applicable, of the
underlying pooled investment vehicles that such Fund is invested in.
       3.      Fee Comparison
Fund expenses, including the management fee and any performance-based fees, may
constitute a higher percentage of average net assets than could be found in other investment
programs.
B.     Payment of Fees
Management fees, performance-based fees, and third-party fees (discussed below) are
deducted from Fund assets. Management fees, which are paid in advance, are withdrawn at
the beginning of the quarter. Performance-based fees are calculated as of the last business
day of the calendar quarter but are only paid when the Funds distribute realized proceeds
pursuant to the Fund’s Governing Documents.

                                                                              Part 2A of ADV:
                                                        137 Ventures Management, LLC Brochure

C.      Third-Party Fees
Expenses to be borne by each Fund typically include the following costs and expenses
associated with the formation, operation, dissolution, winding-up, or termination of such
Fund: (i) all out-of-pocket expenses associated with the organization of the General Partner
or Managing Member, as applicable, or the Fund, or the syndication of interests therein (other
than placement agent fees); (ii) legal, accounting, audit and tax, custodial and other
professional fees as well as consulting fees relating to services rendered to the Fund that
could not reasonably have been rendered by the General Partner or Managing Member, as
applicable, or their members; (iii) banking, brokerage, broken-deal, registration,
qualification, finders, depositary and similar fees or commissions; (iv) transfer, capital and
other taxes, duties and costs incurred in acquiring, holding, selling or otherwise disposing of
Fund assets (other than taxes allocable to one or more Investors); (v) insurance premiums,
costs of similar risk management arrangements, indemnifications, costs of litigation and
other extraordinary expenses of the Fund; (vi) costs of financial statements and other reports
to Investors as well as costs of all governmental returns, reports and other filings; (vii) costs
of meetings of the investors and the advisory committee (including the reasonable travel and
other out-of-pocket costs incurred by the General Partner or Managing Member, as
applicable, and the advisory committee members in attending such meetings); (viii) interest
expenses related to bridge borrowing; (ix) the management fee and all costs associated with
any liquidating trust established in connection with the liquidation and dissolution of the
Fund; (x) legally required advertising and public notice costs; (xi) expenses and legal fees
associated with tax and estate planning for officers and other employees of prospective
portfolio companies; (xii) fees, costs and expenses incurred in connection with the discovery,
investigation, purchase, holding, monitoring, appraisal, certification, sale and exchange of
investments; (xiii) costs and expenses of annual meetings or conferences held for the benefit
of officers and other employees of prospective portfolio companies; and (xiv) any other
expenses incurred on behalf of the Fund not listed in the preceding clauses (i) through (xiii)
that are not customarily considered to be normal operating expenses of the General Partner
or Managing Member, as applicable. As noted above, certain Funds that invest in underlying
pooled investment vehicles pay expenses to the general partners or managing members of
the underlying private limited partnerships that the Funds are invested in.
To the extent that any costs, fees and expenses borne by a Fund also benefit any other Fund,
such costs, fees and expenses will be shared by each Fund on a fair and equitable basis as
determined by 137 Ventures or its affiliates in its reasonable discretion.
D.      Prepayment of Fees
The Funds invest in the securities of private companies on a long-term basis. Accordingly, all
fees are paid during the term of the Funds and Investors are generally not permitted to
withdraw or redeem Interests in the Funds. Fees paid at the beginning of a fiscal period (such
as management fees) will not be refunded or prorated for partial periods.

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                                                       137 Ventures Management, LLC Brochure

E.     Outside Compensation for the Sale of Securities
Neither 137 Ventures nor its supervised persons accept compensation for the sale of
...

Item 7 – Types of Clients

137 Ventures provides investment advice and management to the Funds and may in the
future provide the same or similar services to other privately placed investment funds and/or
other clients.

                                                                             Part 2A of ADV:
                                                       137 Ventures Management, LLC Brochure

The Firm restricts the number of Investors in the Funds and offers Interests only through
non-public transactions in order to maintain their exclusion from “investment company”
status under the Investment Company Act of 1940, as amended (the “Investment Company
Act”).
Prospective Investors in the Funds must meet eligibility criteria and are subject to certain
withdrawal requirements and limitations. Prospective Investors are encouraged to
thoroughly review a Fund’s Governing Documents, which set forth all of the terms in detail.
Though the Funds generally pursue the same strategy, offering terms may differ. Terms for
funds which are special purpose vehicles formed primarily to invest in a specific target
company are generally similar to the Funds but can be negotiated on a case-by-case basis and
may differ from those of the Funds.
Each Investor generally must be an “accredited investor” (as defined in Regulation D under
the Securities Act of 1933) and “qualified client” (as defined in Rule 205-3 under the Advisers
Act) and must meet other criteria as specified in the Governing Documents. Investors in
certain Funds are also “qualified purchasers” (as defined in section 2(a)(51)(A) of the
Investment Company Act of 1940). The minimum initial investment varies by Fund but is
generally in the range of $10,000 to $20,000,000 subject to waiver at the discretion of 137
Ventures.