Alpaca VC Investment Management LLC

Item 5 – Fees and Compensation

A.     Fees

The fees and compensation payable to Alpaca are negotiable and vary among its clients.
The specific manner in which fees are charged by the Firm is established in each Fund’s
Governing Documents and sub-advisory agreements, if applicable, the terms of which may
differ from those described below. The Firm may waive or reduce management fees and
carried interest allocations for certain investors including, without limitation, our
employees and “friends and family” investors (see discussion of side letters in Item 11 –
Code of Ethics, Participation or Interest in Client Transactions and Personal Trading).
Compensation is generally as follows:

       1.       Management Fee

With respect to the Funds, Alpaca typically receives an annual management fee based
upon the total capital commitments or invested capital of investors who are not affiliated
with the applicable General Partners, as described in each Funds’ Governing Documents.
Management fees are typically paid at the beginning of each fiscal quarter. Certain Funds,
as set forth in the applicable Governing Documents, provide for reductions in the
management fee over the life of the Fund. Please refer to the Governing Documents of
each of the Funds for complete information on the amount and timing of management
fee payments.

In addition, management fees may be offset in certain Funds, as set forth in the applicable
Governing Documents, by any directors’ fees or other compensation paid by a Fund
portfolio company to the Firm, the applicable General Partner, the managing members of
the applicable General Partner, or certain other employees of the Firm, unless waived by
the Fund’s advisory committee. Alpaca employees may, from time to time, be asked to
serve (or continue to serve) as directors of, or advisors with respect to, certain companies
in which a Fund has fully exited its ownership interest. Such companies are no longer
portfolio companies of such Fund and, as a result, any compensation received by such
Alpaca employee after a Fund has fully exited its ownership interest is not subject to offset
or otherwise shared with the Fund or its investors.

       2.       Performance-based Fees

Each Funds’ General Partner is entitled to receive a performance-based fee, including
payment of a “carried interest,” as described in the respective Governing Documents. The
“carried interest” varies across Funds, as more fully described in the Governing Documents.
Alpaca is entitled to receive a portion of the carried interest, pursuant to the applicable

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Governing Documents, for its non-discretionary advisory services provided to certain
funds managed by third-party investment advisers.

       3.      Fee Comparison

Management fees, carried interest, if any, and fund expenses can constitute a higher
percentage of average net assets than could be found in other investment programs.

B.      Payment of Fees

Management fees are typically paid in advance of each fiscal quarter. The amount of, and
the manner of calculation of, “carried interest’ is detailed in each Fund’s Governing
Documents. The General Partner of certain Funds will, from time to time, waive or reduce
“carried interest,” as permitted by the relevant Governing Documents.

Payment of fees for services provided pursuant to a sub-advisory agreement are stated in
the applicable sub-advisory agreement.

C.     Fund Expenses

Each Fund is responsible for its own costs and expenses, as applicable to each Fund and
as described in such Fund’s Governing Documents. Such expenses include, without
limitation, (i) organization and syndication costs; (ii) legal, accounting, auditing, custodial,
consulting and other professional fees; (iii) banking, brokerage, finders’ fees, depositary
and similar fees or commissions; (iv) fees, expenses, duties and costs incurred in acquiring,
holding, selling, or otherwise disposing of Fund assets, including such expenses incurred
for transactions which are not consummated; (v) indemnification obligations; (vi) cost of
premiums and fees for liability insurance; (vii) third-party property management services;
and (viii) costs of advisory board and Fund meetings. In addition, Funds may incur costs
and expenses associated with compliance with applicable regulatory requirements,
including those relating to investor reporting, preferential treatment disclosures, and other
regulatory obligations, which may increase administrative burdens and expenses borne by
the Funds. The Firm bears its own operating, general, administrative, and overhead costs
and expenses, other than the expenses described above, and in each Fund’s Governing
Documents.

In certain cases, a co-investment vehicle, or other similar vehicle established to facilitate
the investment alongside the Fund by investors, may be formed in connection with the
consummation of a transaction. Consistent with the applicable Fund’s Governing
Documents, certain expenses (including those related to its organization and formation
and other expenses incurred solely for the benefit of the co-investment vehicle) would be
borne by the investors in such co-investment vehicle in the event a co-investment vehicle
is created to invest alongside a Fund. In addition, a co-investment vehicle will also

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generally bear its pro rata portion of expenses incurred in connection with the making of
an investment. The Firm and its affiliates have discretion to (i) receive performance-based
compensation, management fees, or similar fees for co-investment vehicles, and (ii) collect
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Item 7 – Types of Clients

Alpaca provides investment advisory services to pooled investment vehicles and special
purpose vehicles which operate as exempt investment companies under the Investment
Company Act. The Firm will offer limited partnership interests, membership interests, or
other similar equity interests only through non-public transactions in order to maintain
exemptions status under the Investment Company Act and, to the extent necessary for any

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Fund, restrict the number of investors in such Fund. The Firm also provides advisory
services on a non-discretionary basis to certain funds managed by third-party investment
advisers and ARE provides asset management services on a discretionary basis to the
Partnerships.

Prospective investors in the Funds must meet eligibility criteria and are subject to certain
withdrawal requirements and limitations. Each investor generally must be an accredited
investor (as defined in Regulation D promulgated under the Securities Act), and, if
applicable, a 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 the Funds may include certain qualified individuals, high net worth individuals,
public pensions, corporate pension and profit-sharing plans, corporations, municipalities,
private investment funds, trust programs, sovereign funds, foreign funds and other U.S.
and international institutions. Funds typically have a minimum investment amount. This
amount, which may vary from Fund to Fund, may be waived by the Fund’s General Partner
in its sole discretion.