ITEM 7. TYPES OF CLIENTS
As noted in Item I, Saturn provides investment advice and guidance to several Funds that invest
in Portfolio Companies. Investment advice is provided directly to the Funds and not individually
to investors in a Fund.
Interests in the Funds are offered pursuant to applicable exemptions from registration under
the 1940 Act. Investors in the Funds are generally “qualified purchasers” or “knowledgeable
employees” as identified in the 1940 Act (and rules promulgated thereunder), and may include,
among others, public and private pensions, foundations, financial institutions and insurance
companies, family offices or university endowments.
Saturn Partners Limited Partnership: SPLP I, a $25 million venture capital fund that invested
predominately in emerging companies and special situation opportunities in the electronic
commerce, healthcare, digital media and consumer products industries, was closed in 2001.
Since inception, SPLP I invested $22.1 million in 9 portfolio companies and is now fully invested.
SPLP I Opportunity LP: SPLP I OLP, a venture capital fund, was established to give Fund investors
the opportunity to invest $8.8 million in the Series B Preferred Units of Knopp Biosciences LLC.
SPLPI OLP is now fully invested.
Saturn Partners Limited Partnership II: SPLP II is a $33 million venture capital fund that invested
predominately in software and information technology, biotechnology and advanced materials
companies. SPLP II was closed in March 2009. Since inception, SPLP II has invested $30.4
million in 13 portfolio companies and is now fully invested.
SPLP II Opportunity LP: SPLP II OLP, a venture capital fund, was established to give Fund
investors the opportunity to invest $2.2 million in the common stock of Good Technology
Corporation. SPLPII OLP is now fully invested.
Saturn Partners Limited Partnership III: SPLP III is up to a $100 million venture capital fund that
is investing predominately in software and information technology, specialty energy,
biotechnology and advanced materials. The Fund may also invest in follow-on investments of
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SPLP II portfolio companies and special opportunities which are believed to have potential for
significant growth software and information technology, biotechnology and advanced materials
companies.
SPLP III Opportunity LP: SPLP III OLP, a venture capital fund, was established to give SPLP III and
Fund investors the opportunity to invest $8.0 million in Class 1 Senior Units of Knopp
Biosciences LLC. SPLP III OLP is now fully invested.
ITEM 8. METHOD OF ANALYSIS, INVESTMENT STRATEGY AND RISK OF LOSS
Saturn’s investment objective for each Fund is to provide superior returns to investors by
sourcing and leading proprietary investments in Portfolio Companies. Saturn often invests in
companies seeking capital to bridge the gap between angel and institutional later stage venture
funding. The Saturn Team continues to believe that companies at this stage provide a rich
range of investment opportunities.
Saturn focuses on investments in software and information technology, specialty energy,
biotechnology and advanced materials. Saturn may also invest in innovative technologies in
other niche markets and in special opportunities that have potential for significant growth.
Saturn invests in companies that have the following characteristics:
1. Strong Management: committed team with deep industry knowledge capable of
executing the company’s business plan and adapting it to address shifts in
technology, markets or competition;
2. Technological Barrier: proprietary or innovative technology which creates a
barrier to market entry or first mover advantage;
3. Competitive Advantage: product or service that addresses a critical need in a
growing market or provides a solution which creates a new market opportunity;
4. Sound Strategy: achievable business plan with clear path to profitability and
viable strategies to achieve liquidity; and
5. Interest Alignment commitment to growth and success reinforced by a capital
structure that aligns the interests of management with those of the
shareholders.
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The Saturn Team understands early stage investing and has experience establishing priorities,
setting and adhering to funding and technology development milestones and identifying and
managing risks. Saturn’s ability to leverage its extensive experience and expertise is expected
to provide a key competitive advantage to each Fund, and it believes each Fund needs to be a
value-added investor to generate significant returns. Therefore, the Saturn Team will seek to
add value to the Fund’s investments in the following ways:
1. advising Portfolio Companies on technology and intellectual property strategy
development, including identification and sourcing of technologies from universities;
2. evaluating market potential and competition;
3. developing product development strategies;
4. recruiting board members and senior executives for Portfolio Companies;
5. introducing Portfolio Companies to strategic customers and partners and nurturing
these relationships;
6. building relationships between Portfolio Companies and potential sources of additional
financing, including co-investors;
7. consulting on management, technical and professional issues; and
8. developing strategies for Portfolio Company expansion, growth and liquidity.
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