The CleanTech Market Opportunity Confidential

Element Ventures - Highlights $250+ million - capital under management Focused exclusively on CleanTech Institutional Limited Partner base Experienced General Partners with deep domain expertise Successfully managed $375 million in four prior CleanTech funds Advent Energy I, Advent Energy II, EnerTech I, EnerTech II Strong financial performance 72% gross IRR since 1995 in CleanTech 3.5x cash-on-cash return on realized investments Proven strategy Invest where resource constraints are economically important Focus on market-driven solutions with compelling value propositions Exceptional reach and world-class investment infrastructure Unique network for technical expertise and portfolio company support

$250+ million - capital under management

Focused exclusively on CleanTech

Institutional Limited Partner base

Experienced General Partners with deep domain expertise

Successfully managed $375 million in four prior CleanTech funds

Advent Energy I, Advent Energy II, EnerTech I, EnerTech II

Strong financial performance

72% gross IRR since 1995 in CleanTech

3.5x cash-on-cash return on realized investments

Proven strategy

Invest where resource constraints are economically important

Focus on market-driven solutions with compelling value propositions

Exceptional reach and world-class investment infrastructure

Unique network for technical expertise and portfolio company support

What is CleanTech? CleanTech: Resource Management through Resource Lifecycle Variety of Resources: Affects most Industries: Sourcing & Delivery Management & Optimization Disposal & Reuse Resource Lifecycle Commodities Materials Chemicals Water Power Fuels Air Emissions Utilities Chemicals Electronics Agriculture Consumer Services Industrial Transportation Manufacturing

CleanTech: Resource Management through Resource Lifecycle

Variety of Resources:

Affects most Industries:

Commodities

Materials

Chemicals

Water

Power

Fuels

Air

Emissions

Utilities

Chemicals

Electronics

Agriculture

Consumer

Services

Industrial

Transportation

Manufacturing

EnviroTech to CleanTech Regulatory Driven Decisions Compliance-based Purchasing Reactive (“end of pipe”) Chemical Science Traditional Engineering Slow Growth Markets “ Save the World ” Economic Decisions Productivity-based Purchasing Proactive (“clean fuels”) Material Science Collaborative Engineering Rapid Growth Markets “ Entrepreneurial” Mentality CleanTech (Late 1990’s – Today) EnviroTech (1980 – Early 1990’s)

Regulatory Driven Decisions

Compliance-based Purchasing

Reactive (“end of pipe”)

Chemical Science

Traditional Engineering

Slow Growth Markets

“ Save the World ”

CleanTech Market Overview CleanTech products & services account for $150 billion globally with 5 – 10 year growth rates projected at 35% 4 Sources: 1. http://hebe.statenet.com/leg/wp/snlegwhitepaper.pdf . 2. A typical eight inch silicon wafer requires 2,800 - 3,200 gallons of “high purity” water to manufacture. PPRC. 3. US Department of Commerce; Manufacturing in America, January 2004. 4. CleanTech Venture Network, CleanTech – Achieving Competitive Venture Returns” October, 2004. Transportation and Logistics Material Sourcing and Replacing Resource Optimization Material Handling Enabling Technologies Recovery and Recycling Environmental Compliance Manufacturing and Industrial Fuel Recovery Power Generation Energy Storage Energy Infrastructure Energy Efficiency Alternative Energy Advanced/Alternative Fuels Energy and Power Water Purification Water Filtration Desalinization Wastewater Treatment Water Management Air Quality Emissions abatement Air and Water

Transportation and Logistics

Material Sourcing and Replacing

Resource Optimization

Material Handling

Enabling Technologies

Recovery and Recycling

Environmental Compliance

Fuel Recovery

Power Generation

Energy Storage

Energy Infrastructure

Energy Efficiency

Alternative Energy

Advanced/Alternative Fuels

Water Purification

Water Filtration

Desalinization

Wastewater Treatment

Water Management

Air Quality

Emissions abatement

CleanTech Market Drivers Resource constraints Energy supply and demand imbalance Shortages of clean air, clean water, and clean power Aging power and water delivery infrastructure Global competition Increasing focus on resource efficiency and cost of production Corporate responsibility for product “lifecycle management” Tightening environmental regulation Acceleration of global concern and government mandates Public awareness and shareholder influence Technological advances Ability to apply advances in other fields to resource constraint problems Biotech, sensing, communications, IT, advanced materials, and power electronics

Resource constraints

Energy supply and demand imbalance

Shortages of clean air, clean water, and clean power

Aging power and water delivery infrastructure

Global competition

Increasing focus on resource efficiency and cost of production

Corporate responsibility for product “lifecycle management”

Tightening environmental regulation

Acceleration of global concern and government mandates

Public awareness and shareholder influence

Technological advances

Ability to apply advances in other fields to resource constraint problems

Biotech, sensing, communications, IT, advanced materials, and power electronics

Historical Commodity Prices Source: FactSet Research Systems; Bloomberg.

Attractive Investment Opportunity CleanTech has emerged as a high-potential investment space Accelerating rate of new CleanTech business formation More seasoned entrepreneurial pool Leveraging technology advances across multiple fields Currently undercapitalized by institutional venture capital Reasonable valuations (but changing) Less competition (but changing) Poised for aggressive growth over the next decade Fueled by strong economic, regulatory, and technology drivers Improving capital markets More than $4 billion invested in upwards of 500 CleanTech venture deals since 2002 1 Over the last two decades the number of exits and the acquisition multiples have increased Source: 1. Vortex Energy LLC; “CleanTech Venture Investing: Patterns and Performance;” March 2005.

CleanTech has emerged as a high-potential investment space

Accelerating rate of new CleanTech business formation

More seasoned entrepreneurial pool

Leveraging technology advances across multiple fields

Currently undercapitalized by institutional venture capital

Reasonable valuations (but changing)

Less competition (but changing)

Poised for aggressive growth over the next decade

Fueled by strong economic, regulatory, and technology drivers

Improving capital markets

More than $4 billion invested in upwards of 500 CleanTech venture deals since 2002 1

Over the last two decades the number of exits and the acquisition multiples have increased

Environmental Tech vs. CleanTech Source: Vortex Energy LLC Environmental Technology CleanTech WAVE WAVE

Growing CleanTech Exit Opportunities M&A activity has increased at a 95% CAGR over the last four years IPO activity has increased at a 73% CAGR over the last four years Sources: Capital IQ, New Energy Finance. As of 12/31/2005.

M&A activity has increased at a 95% CAGR over the last four years

IPO activity has increased at a 73% CAGR over the last four years

Emerging: Number of Nanotech & Cleantech Co’s 2005 72 64 41 101 United States Europe Biopharma: 13 Biopharma: 1 Med Devices: 3 Comm: 4 Electronics: 8 Electronics: 10 Info Services: 1 Semi: 18 Semi: 1 Software: 4 Software: 4 Products: 1 Products: 1 Services: 1 Mat/Chem: 16 Mat/Chem: 8 Agriculture: 2 Energy: 3 Energy: 21 Other : 1 Other : 15 Nano Clean Tech Biopharma: 8 Biopharma: 4 Med Devices: 6 Comm: 1 Electronics: 4 Electronics: 7 Semi: 3 Semi: 1 Software: 1 Software: 1 Products: 8 Services: 2 Services: 6 Retail: 1 Mat/Chem: 14 Mat/Chem: 15 Agriculture: 1 Energy: 1 Energy: 24 Other : 1 Other : 33 Nano Clean Tech Source: Ernst & Young / Dow Jones VentureOne

Emerging: Cumulative Capital in Nanotech & Cleantech 2005 € 165 M $1182 M € 348 M $1173 M United States Europe Biopharma: $276 Biopharma: $78 Med Device: $18 Comm: $146 Electronics: $107 Electronics: $245 Info Services: $5 Semi: $320 Software: $87 Software: $86 Products: $20 Mat/Chem: $207 Mat/Chem: $105 Agriculture: $70 Energy: $8 Energy: $407 Other : $6 Other: $166 Nano Clean Tech Biopharma: € 47 Biopharma: € 9 Med Device: € 13 Electronics: € 16 Electronics: € 46 Semi: € 9 Semi: € 3 Software: € 0.1 Software: € 1 Products: € 11 Services: € 0.4 Services: € 23 Mat/Chem: € 79 Mat/Chem: € 42 Agriculture: € 1 Energy: € 0.1 Energy: € 135 Other : € 0.2 Other : € 80 Nano Clean Tech [$197 M] [$415 M] Source: Ernst & Young / Dow Jones VentureOne .

Generation Technology Costs, 1980–2004 Drivers: technology changes, fuel prices and interest rates