VMI Corporate Development November 2010

Commitment – Integrity – Performance
VMI’s Corporate Development Services
November 2010

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About Venture Management
Venture Management, Inc. is a boutique investment bank that provides merger &
acquisition advisory services to technology-based businesses, their investors and lead
executives. VMI is best known for its expertise in supporting consolidation strategies in
the Federal Services market, particularly for professional services firms in the aerospace
and defense, intelligence and homeland security sectors.
Venture Management’s mission is to deliver extraordinary value to its clients
through our team’s ability to apply:
•In-depth understanding of each client's business
•Knowledge of each client's business environment and factors driving valuations
•Experience structuring and negotiating Mergers, Acquisitions and Divestitures
•Commitment to integrity and client success

Business Practices
Our clients include public and private companies engaged in strategic acquisition
initiatives; private equity groups looking to acquire or divest portfolio companies;
business owners seeking exit strategies; and management teams seeking to purchase
or recapitalize their companies.
• Mergers & Acquisitions
• Business Sales & Divestitures
• Corporate Development Advisory Services
• Corporate Strategy & Finance
• Integration Consulting
• Capital Sourcing
• Valuation & Fairness Opinions
We are a small team of specialists. We measure our performance by the
increase in value created for our clients – not the number of transactions
or the breadth of our services. We do deals that increase value, and that
is all that we do.

Corporate Development Advisory Services
Venture Management provides senior level attention to each client. The experience that
we apply to each transaction allows us to meet or exceed our clients' objectives and
expectations.
Our Corporate Development Advisory Services include:
•Federal Market Assessment
•Evaluation of alternatives to increase shareholder value
•Development of candidate search criteria
•Identification of, and initiating contact with, candidate companies
•Preparation of presentation materials
•Coordination of the advisory team
•Management of communication and negotiation
•Due diligence support
•Arranging financing
•Post-acquisition integration planning

Industry Sector Focus
VMI is best known for its expertise in supporting consolidation strategies in the Federal
Services market, particularly for professional services firms in the aerospace and
defense, intelligence and homeland security sectors.
•Base/Site Operations
•C2/C3/C4ISR Services/Systems Support
•Database Development/Mgmt/Maintenance
•Desktop Managed Services
•eGov/eCommerce
•Engineering/Technical/Scientific Services
•Geospatial Information Systems
•Information Analysis Centers (IACs)
•Information Assurance/Cyber Security
•IT Services
•Knowledge Management
• Managed Services
• Management/Consulting/ Strategic
Planning Services
• Mission Support Services
• Modeling and Simulation
• R&D Services
• Software/Application
Development/Mgmt
• Studies and Analysis
• Systems Development
• Systems Integration
• Test & Evaluation Services

Non-Auction Deal Flow
Venture Management is able to source unrepresented and qualified transaction
candidates from the universe of companies by:
•Maintaining long-term relationships with shareholders & founders (frequently from
previous acquisition searches)
•Interacting with investors and advisors regularly
•Researching and tracking companies in the marketplace
•Proactive communications with companies that meet criteria
•Remain “neutral” trusted advisor

Our Advantages
We work with a select few clients at any one time and focus upon achieving their goals
as rapidly as they are ready to move.
Executive Level Engagement: Each client is significant client to us, and you will receive
a high bandwidth from the executive team.
True Experience: While larger firms may have more aggregate business, the team you
work with may have less experience than we do.
Proprietary Deal Flow: We maintain communications with many of the founders of small
and mid-sized companies within the Federal Services arena, and our proprietary
database provides us the means of keeping track of the activities of these firms. Venture
Management can identify and motivate a sufficient number of strategic sellers to assure
you will have a non-auction deal flow of qualified targets.
Pre & Post Transaction Integration Consulting: We remain a trusted partner after the
transaction to ensure that the transaction is a success for all parties. Venture
Management can identify and motivate a sufficient number of strategic sellers to assure
you will have a non-auction deal flow of qualified targets. We are capable and have
demonstrated success in achieving the goals of clients seeking growth through
acquisitions.

Our Experience
• Celebrating 25th year of service
• Completed over 200 engagements
• Focus on technology-based businesses in the Federal Market
• Results include greater than $1 billion of value
• Team of Industry Vets

National Presence
Offices
• Washington, DC
• Los Angeles, CA
• San Diego, CA
• Boston, MA
• Detroit, MI

Our Team
We are a team of subject matter experts with operational experience in companies that
sell services, products, and solutions to federal government clients with exposure to
diverse technologies.
Mark Shappee – Managing Director
Jason Gayl – Vice President
Sam Smith – Vice President
Paul Serotkin – Senior Advisor
Pete Cambier – Senior Advisor
Tom Hernandez – Senior Advisor
Elisa Franklin – Senior Advisor

Engagement Team Bios
Mark Shappee, Managing Director
Mark's ability to serve the firm's clients in its strategic advisory
practices of mergers, acquisitions and divestitures is built upon
more than 40 years of business experience, starting as a Systems
Analyst at "Space Park" for TRW, now Northrop Grumman. The first
half of Mark's career provided him with an in-depth knowledge of the
large, public company perspective on sector consolidation through
mergers & acquisitions in the U.S., Europe, Asia-Pacific and Africa.
Responsibility for acquisition integration, operations and,
occasionally, divestitures came along with the broadening of his
functional experience in the roles of Chief Financial, Corporate
Development & Marketing Officer.
Since founding Venture Management, Mark has been able to
leverage that large corporation experience associated with acquiring
and being acquired. Responsibility for the post-acquisition
integration as well as the pre-acquisition planning and analysis
provided Mark with an understanding of the issues and challenges
on "both sides of the table". This perspective allows Mark to
appreciate the many issues to be addressed by management
teams, investors and business owners throughout the process of an
"acquisition", and to earn the continued trust and confidence of
clients and advisors.
Mark has an undergraduate degree in Economics from Claremont
McKenna College and received his MBA from Harvard Business
School. Additionally, Mark has completed other Executive Programs
from Stanford and New York Universities in corporate finance and
mergers and acquisitions. He is a licensed advisor and active in a
number of professional associations.
Pete Cambier, Senior Advisor
Pete brings to the Venture Management Board of Advisors and to our
clients more than 30 years of experience in financial management,
including over 15 years with contractors serving federal government
clients. His experience in the federal contracting arena has included C-
level responsibility for finance, human resources and contracts. Pete has
managed the proposal process for companies that have won some of
the largest government contracts offered. Pete maintains a Top Secret
clearance level.
Prior to starting Cambier Consulting, Pete was Chief Financial Officer
(CFO) at several early stage and midsize technology based companies
and service providers to agencies of the federal government. At the
government contractor ITS Corporation (ITS), he was a member of the
management and ownership team that built ITS from a $5 million in
revenue government contractor to over $80 million in revenues and sold
to QinetiQ North America. He was responsible for all the financial and
accounting functions at ITS, as well as mergers & acquisitions,
information systems and contracts. Upon joining QinetiQ he became the
CFO for their Information Technology Systems Group which had
revenue of $400Mil.
Prior to his leadership roles at ITS and QinetiQ, Pete had successively
increasing responsibilities with Burroughs Corporation, now Unisys, and
with Vetco, Inc., where he was Controller of the $150 million in revenues
Western Hemisphere, as well as serving as CFO of 2 other mid level
companies.
Pete received his Master of Business Administration from the University
of Southern California and a Bachelors of Arts in Economics from the
University of California at Santa Barbara.

Engagement Team Bios
Paul Serotkin, Senior Advisor
Paul joined the Venture Management team after completion of the
merger between Minuteman Ventures and Venture Management in
2008. He founded Minuteman Ventures in 2001, a firm focused on
sell-side and buy-side M&A in the federal contracting sector. Paul
has held several management positions with technology, software
and consulting firms since 1978.
Paul currently is the Executive Vice President, Operations and
Finance, for Glevum Associates, a firm that provides analytic and
research data to government agencies and humanitarian
organizations operating in conflict geographic areas, such as
Afghanistan. Paul has also been Vice President, Chief Financial
Officer, and Director of Corporate Planning, for UFA, Inc., which
supplies simulators to train military and commercial air traffic
controllers. Paul also established and managed Corporate
Development at AverStar, Inc., serving as Vice President during its
growth from $120 million to $200 million. AverStar, acquired by Titan
Systems in 2000, was a system integrator and IT services firm.
Upon acquisition by AverStar, Paul became Chief Financial Officer
and Vice President, Strategic Planning, for AverCom Corp., a Titan
subsidiary. AverCom delivered content management, portals and
other scalable web-based solutions. Paul also managed Corporate
Development for Pacer Infotec, Inc., a defense company providing
engineering services and producing flight simulators and helicopter
navigation systems. He began his career as a Director with the
Smaller Business Association of New England (SBANE), a
nationally focused policy group for growth companies. There, he
helped to pass the landmark Small Business Innovation Research
(SBIR) program in 1982.
Additionally, Paul has served on several company and organization
boards, including the Boston Chapters of the Association for Corporate
Growth (ACG) and the National Investor Relations Institute (NIRI). He
currently serves on the New England Chapter Board of the National
Defense Industrial Association (NDIA), and is Vice-Chair of the
Massachusetts Business Alliance for Education (MBAE).
Paul earned his BS degree in accounting from Northeastern University,
a MA degree in Communications from Boston University and undertook
graduate studies at the Graduate School of Business Administration at
Northeastern.
Jason Gayl, Vice President
Jason manages engagements in the Mid-Atlantic Region, with a
particular focus on high-technology Aerospace & Defense government
contractors and consultancies. Prior to Venture Management, Jason
developed his financial analysis and modeling expertise at the Calvert
Group, Thompson Financial and Brown Brothers Harriman & Co. Jason
has over a decade of experience in negotiating and structuring
mergers and acquisitions, debt and equity financings, strategic
alliances and joint ventures. During this time, Jason has developed
deep expertise in partnering institutional investors and strategic
acquirers with entrepreneurs pursuing corporate development and exit
strategies. While predominantly active in the A&D field, Jason has
been involved in Healthcare, Real Estate, Energy and Entertainment
transactions.
Jason received his undergraduate degree in Economics from Boston
University and his MBA from the Robert H. Smith School of Business,
with concentrations in finance, strategy and entrepreneurship. He is
active in the Washington DC new venture, and small and middle
market communities.

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Representative Engagements

Overview of Acquisition Process

Acquisition Process
Phase I
• Develop search criteria
• Develop value propositions
• Identify and screen candidates
• Perform valuation analyses
Phase II
• Provide negotiation support
• Advise on transaction structure
• Prepare offering documents
• Support funding efforts
Phase III
• Guide due diligence activity
• Facilitate communications
• Consult on integration

Purposes of the Process
• Achieve our client’s stated goals
• Minimize client time & expense
• Maintain confidentiality
• Reduce transaction risk
• Assure successful integration
• Obtain best value for client

Search Criteria: Key to Success
• Provide strategic direction & standards
• Allow target identification
• Identify information to be obtained
• Support target ranking & valuation
• Identify deal issues early
• Support efficient review process

Value Proposition
What do you bring to the Seller?
• Liquidity
• Corporate Culture
• Growth Opportunities
• Management Team
• Broader Service Opportunity
• Corporate Structure
• Reduced Risk

Identify & Screen Candidates
Proprietary database of 15,000+
companies
•Information Technology
•Defense, Intelligence & Security
•Energy and Technology
Data mining capabilities
•Queries based on acquisition criteria
•Queries based on value opportunities
Personal contact with Principals
•Objectives and goals
•Acquisition Criteria
•Exit strategies
Research Partners:

VMI: Identify & Screen Candidates
Relationships in Federal Market
• Known as Thought Leaders
• Relationships with Founders
Qualify Candidates
• Pre-screen universe of candidates
– Fit
– Availability
– Value Expectations
• Comparable Transaction Database
• Proprietary Keyword “Search-Bot” Tool

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Financial Strategic Contracts Operations
Corporate Dashboard

Perform Valuation Analyses
Financial Models
• Growth forecasting
• Return forecasting
• Value Analysis
• Assumption testing
• Sensitivity analysis
• Projected financials

Support Funding Efforts
Private Placements
• Maintain investment criteria of investors seeking platform company.
• Have relationships with venture capitalists, private equity groups, venture banks &
commercial lenders
• Service Offerings:
– Valuation Analysis
– Draft Investment Thesis
– Facilitate Investor Meetings
– Negotiate Terms & Covenants with Investors

Transaction Timeline
Days 1-120:
Days 121-180:
Days 181-270:

Case Studies, Newsletters & White Papers

Case Study: SM&A
Client Objectives
SM&A (NASDAQ: WINS) entered into a strategic advisory
engagement with Venture Management aimed at developing non-
auction deal flow in support of an acquisition strategy which would
contribute to the achievement of its objectives related to (a)
expansion of its service offering to the major Aerospace and
Defense (A&D) Prime Contractors, (b) penetration of additional
vertical markets, (c) development of a Program Services business
unit and (d) profitable growth of its Project Management Consulting
business. SM&A's shares were being undervalued relative to its
peer group and historical financial performance due to the
company's revenue streams' dependence upon proposal efforts for
major A&D platform contracts. SM&A wished to build on their core
strengths in management of major proposals work and A&D domain
knowledge.
Overview and Process
SM&A and Venture Management, Inc. (VMI) worked to identify
underserved market segments within their existing client base. VMI
then moved to execute a closely defined acquisition strategy that
would transform the company from being a Competition
Management firm to a Consulting firm with an integrated offering for
the full project lifecycle and addressing the needs of its clients'
Project Management Offices (PMOs).
Key to the acquisition strategy was the work done with SM&A's
CEO, COO and management team to develop very tightly focused
acquisition criteria. Establishing domain knowledge in Planning and
Scheduling and Earned Value Management were key priorities, as
well as supporting an emerging strategic advisory practice. VMI
applied the detailed criteria to its proprietary database of federal
service providers, narrowing the extensive field of potential
candidates from over 1,500 to less than 100. VMI recommended
transaction structure and supported negotiations with selected
candidates; the three transactions noted above were completed
during 2007-2009.
The Result
Following the closing of these three acquisitions, SM&A increased
its revenue run rate by more than 20%, the added several major
new clients and broadened its base of services for its A&D client.
Venture Management's engagement continues to provide "non-
auction deal flow" for SM&A, which is expected to result in
additional acquisitions in 2010.
Venture Management Executes Growth Strategy

Case Study: ITS
Client Objectives
I.T.S. Corporation (ITS) determined that critical elements of its plans
to increase shareholder value would include acceleration of the
company's growth rate and entry into higher value-added segments
of the federal services market than available through its existing
core capabilities in information technology (IT) related services.
Overview and Process
ITS is a middle market provider of IT and engineering solutions to
the U.S. military. Venture Management, Inc. (VMI) had previously
worked with the management and a private equity group to structure
a management buy-out from the founder. The company's new CEO,
its management team and its shareholders decided to increase
shareholder value through a growth strategy that included both
organic development and the acquisition of related businesses. VMI
was retained to provide strategic advisory services and to execute
the acquisition strategy.
VMI worked with the CEO to develop ITS' acquisition criteria.
Establishing a base of operations in the Washington, D.C. metro,
increasing penetration of certain agencies and expanding the
service portfolio into certain disciplines were components of the
acquisition criteria. VMI applied the detailed criteria to its proprietary
database of federal service providers, narrowing the extensive field
of potential candidates.
Initial meetings and assessments were conducted by VMI and a
"short list" of candidates was presented to ITS. VMI recommended
transaction structure and supported negotiations with selected
candidates. The company completed two transactions in December
of 2005
The Result
Upon the closing of these two acquisitions, ITS achieved a one-
year growth in revenue run rate of nearly 100%, the addition of
several major new federal clients, a broadened base of services
and the establishment of a substantial DC area base of operations
with a strong management team. Subsequently, a major increase in
ITS' valuation was achieved, and, in April of 2007, ITS was sold to
QinetiQ for $90 million, an implicit valuation of 14.6 times 2006
EBITDA. This multiple was more than two times both the multiples
paid to purchase the company from the founder and the multiples
required to complete the two acquisitions that VMI initiated.
Venture Management Executes Acquisition Strategy

The Federal Growth Report
Welcome to the Federal Growth Report, the newsletter published by Venture
Management. Our newsletter addresses issues of importance to leaders in the federal
contracting sector. These people build companies and increase equity value

VMI Corporate Development November 2010

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VMI Corporate Development November 2010