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English text follows Russian Text

Наш ответ состоит из трех частей:

1. Какого склада ума, взглядов и философии придерживаются управляющие и директора данной русской компании.

2. Что было сделано русской компанией, чтобы выстоять в течение последних 5 лет.

3. Каковы физические и финансовые характеристики бизнеса.

1. Склад ума, взгляды и философия русского бизнеса являются определяющими критериями для подбора русских клиентов.

Как мой потенциальный русский клиент смотрит на жизнь является наиболее важным критерием при выборе клиентов, поскольку мы воплощаем то, о чем мы думаем. Физики говорят, что вселенная реагирует на наши намерения.

Многие русские хотят изменений в своем бизнесе и жизни, но они хотят, чтобы изменения были даны им. Я не заинтерисован в работе с людьми, кто считает, что изменении может быть им дано в качестве пожертвование. Я хочу работать с русскими клиентами, кто помимает, что они сами способны изменить и что все перемены сопряжены с риском. Я не могу это сделать за них.

Я могу только показать им путь. Перемены моими русскими клиентами могут быть, достигнуты только в том случае, если они согласны с тем, что прежде всего необходимо изменить свои взгляды. Необходимо понимание, что русские не смогут ничего достичь, если будут смотреть на себя как на жертв. Вметсто этого они должны сознавать себя способными стать созидателями.

Я ищу русских, которые понимают, что вполне нормально не знать ответы на все вопросы. Никто не знает всех ответов, поскольку единой правды не существует. Истина изменяется, т.к. в процессе познания мы преобретаем мудрость. Жизнь - это игра, постоянно с опряженная с риском. Знание, что жизнь заключает в себе риск, приводит к ответственности. Ответственность означает желание взять на себя риск. Несмотря на то, что результаты могут не соответствовать ожидаемому, в конечном итоге, принятие риска необходимо в процессе познания. Без риска нет возможности познания. Я должен верить в возможность изменения моего опыта и иметь желание в жизни пойти на риск.

Некоторые люди создают иллюзию стабильности и позволяют этому превратиться в их оконы вместо того, ч тобы взглянуть на новые перспективы. Они становятся рабами своего существующего образа жизни. Чтобы вырваться из этой жизни, необходимо пойти на риск. Трагедия неприятия жизни заключается в игнорировании возможности риска. Толстой сказал, что в погоне

за богатсвом мы обнаруживаем, что смысл жизни заключается не в самом богатстве. Он советовал обратить внимание на источник силы внутри нас, а не во вне. Одним словом, я выбираю моих русских клиентов на основе их веры в то, что они сами способны произво

дить изменения и их желания принять риск. Следовательно, я выбираю моих русских клиентов среди тех, кто верит в свою способность завершить перемены. Принимая способных, я создаю больше людей, способных помочь тем, кто неспособен. Под неспосбными я подр

азумеваю людей, которые верят в то, что они не могут сами что-либо изменить. Мой метод выбора и оценки клиентов дает наилучшие результаты, т,к, достигнуть конкретных результатов изменения можно быстрее с теми, кто готов производить изменеия. Неспособны

е же будут только спорить и обсуждать бесконечно любой риск. Я этого не желаю.

2. Что русская компания предприняла, чтобы выжить в течение последних 5 лет. Моим вторым критерием в выборе русских клиентов является подбор людей, которые продемострировали своими действиями, что они способны, а не неспособны, и что их решения были на

благо не только себе, но и другим в их обществе. Я ищу доказательства того, что они видят, что возможность перемен исходит от их внутренней силы, а не извне, и что они сами могут направить свое творчество и согласны пойти на риск для достижения этой цели

. Они должны видеть себя скорее созидателями своих жизней, чем жертвами других.

3, Физические и финансовые характеристики бизнеса является моим третьим критерием при выборе русских клиентов.

Не все из этих характеристик требуются, но все они очень полезны и большинство из них должно присуствовать.

- фирма должна быть частной. - фирма должна иметь свою со бственную землю, здания, машины и оборудование. - фирма, существующая по крайней мере 3 года. - фирма, имеющая экспортную лицензию. - фирма, освобожденная от экспортных обязательств (государственные конфискации прибыли производителя) либо имеющая их не более 10%. - фирма, выплачивающая заработную плату и не имеющая долгов. - фирма, Генеральный Директор и менеджеры которой имеют резонную заработную плату и защищают не только свои интересы, но и интересы служащих и акционеров. - фирма, которая выплачивает дивиденты от прибыли. - фирма, желающая открыть свое учереждение в США с американскими представителями. - фирма, имеющая продажу за прошлый год не менее 3 миллионов долларов. - фирма, использующая западную общепринятую бугалтерскую практику (GAAP). - фирма, чья бухгалтерия ведется в жесткой валюте. - фирма, имеющая право производить обмен валюты. - фирма, имеющая банковские счета вне России - фирма, имеющая соглашения, которые установливают полную сферу деятельности и лимитацию таких полномочии со всей документацией россииского правительства закреплающей такие полномочия (право регулировать или контролировать экономическую деятельность компании).

Когда эти критерии удовлетворены, я готов работать на такую русскую компанию. Работа, которая должна быть сделана, описана в ../texts/pb63.html

Больщинству русских компаний это описание будет непонятно. Это включает принципы, с которыми они еще не знакомы. В этом заключается моя работа, а также в процессе этой работы обучать моих русских клиентов, как это сделано и почему это необходимо.

Financing for Great Internet Business Concepts $3,300,000,000.00

Advisor

Internet Capital Group

Other Advisory Board members of Internet Capital

Internet Capital Group Portfolio Companies
Internet Capital Strategic Shareholders
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Электронная почта Dr. Palms

WHAT PEOPLE ARE SAYING ABOUT PALMS PORTAL

References, credentials, track-record

History of Palms & Company, Inc. 1934-1997

With a U.S. Government guarantees of the investment in your Russian company you cannot fail to get capital

BEFORE YOU GET CAPITAL YOU MUST KNOW WHAT YOU ARE GOING TO USE IT FOR

• To answer that question, don't use consultants, unless you use them properly
• Every project must be analysed with "project analysis" and not with generic consulting. There is an enormous difference between the two.
• The most compentent American with experience in Russia is Douglas Keene. here is what he has to say: clickhere

Now that Mr. Keene has explained why all those consultants can be a waste of time, lets go through the steps of getting some money for the plan he has for your business expansion.

Also I want to remind you: "If a consult is paid by someone else, he isn't working for you" There are no Successful governments, only successful busineses

Инвестиции в предлагаемые проекты возможны из средств Американского Фонда Венчурного Капитала в России (Russian Venture Capital Fund of America), далее по тексту - Фонд. Данный Фонд предлагает уникальную комбинация финансового и кредитного сервиса в России и СНГ. Учредите- лем и Президентом Фонда является д-р П.Палмс. Компания "PALMS & COMPANY INC., INVESTMENT BANKERS" является Управляющей Фондом компанией. Задача Фонда инвестировать средства в частный сектор экономики России и СНГ и создание с этой целью системы рычагов, которые бы позволяли Россий- ским и Западным партнерам получать значительные преимущества в условиях инвестирования с участием правительственных и межправительственных организаций. Фонд работает в тесном сотрудничестве с другими частными инвесторами и межправительственными организациями и предлагает фи- нансирование средств в акционерный капитал, представление финансовых гарантий, пpедставление кpедитов, кpедитных линий, займов и инвестиций, финансирование международной торговли, обмен валют, межбанковские кpедиты, услуги по исследованию рынков. Фонд осуществляет свою деятельность через свои 12 офисов, расположенных в России, на Украине, в Казахстане и Литве. Фонд осуществляет свою деятельность по четырем основным направле- ниям: 1. Инвестирует средства в уставные капиталы частных компаний совместно с другими сильными компаниями, управляемыми западными менеджерами и межправительственными организациями. Это позволяет проводить инвестиции ПОДДЕРЖИВАЕМЫЕ ПРАВИТЕЛЬСТВОМ США. 2. Оказывает избранную прединвестиционную технико-финансовую помощь, для обеспечения правительственной поддержки инвестиционных проектов. 3. Оказывает услуги по обмену валют. 4. Обеспечивает поддержку деятельности компаний на международных рынках.

Фонд инвестирует средства в следующие виды деятельности: переработка леса, разработка и добыча энергоносителей, производство продуктов питания, танспортировка грузов, туризм, конверсия оборонной промышленности, машиностpоение, здравохранение, добыча пушнины, банковская деятельность и финансовые услуги.

Инвестируемые средства могут быть получены как в долларах США так и в рублях. Содействие в формировании уставных капиталов может быть выполнено в рублях, приватизационными чеками, взаимозачетами долгов, а также использую массу других очевидных и не очевидных возможностей.

Наиболее важным шагом на пути привлечения инвестиций является согласо- вание условий иностранных инвестиций с правительственными учреждениями России, уполномоченными решать вопросы международных инвестиций. Компания "PALMS & COMPANY" разработала и внедрила в практику механизм, позволяющий согласовывать данные вопросы.

Так необходимо согласовать с:

- Центробанком России (вопросы открытия рублевых и валютных счетов, разрешения на открытие счетов за пределами России, разрешение на проведение валютных операций). - Кабинетом Министров (вопросы получения экспортных лицензий, льгот по налогооблажению) - Министерством Энергетики (вопросы ценообразования без дискриминации) - Министерством Финансов (вопросы, связанные с обменом валюты) - Налоговыми службами (вопросы регистрации в качестве плательщика налогов)

и т.д.

Вопросы капитализации проектов повлекут за собой неизбежные расходы, связанные с согласованием благоприятного климата для зарубежных инвестиций, проведением прединвестиционного анализа проекта, согласования возможных условий возмещения инвестиций методом "услуги за услугу" и другие расходы. До 75 % подобных расходов можно оплатить за счет безвозмездных ссуд от межправительственных организаций. Когда представленный проект подподает под такое финансовое содействие - решает Фонд в каждом конкретном случае отдельно.

ВОЗМОЖНЫЕ ФОРМЫ ИНВЕСТИЦИЙ:

1. Инвестиции приватизационными ваучерами

2. Инвестиции долларами США компанией PALMS & COMPANY на покупку оборудования в обмен на акции компании, получающей данное оборудование

3. Инвестиции в долларах США

4. Долгосрочные кредиты и покупка иностранной валюты в обмен на отечественную с поледующим ее выкупом.

5. Инвестиции компанией в обмен на ликвидные обязательства Российских компаний.

6. Кредиты в национальной валюте, представляемые Центральным банком компании PALMS & COMPANY

7. Совместное инвестирование с последующей оплатой инвестору на бартерной основе (поставками мехов, цемента, удобрений и т.п.).

8. Компенсационное инвестирование. Оплата за счет произведенной в будущем продукции.

9. Инвестиции в рублях компанией PALMS & COMPANY

10. Инвестиции в долларах США в обмен на займы в национальной валюте компании PALMS & COMPANY

11. Инвестиции в долларах США компанией PALMS & COMPANY в виде "услуги за услугу", т.е. в обмен на рубли получаемые компанией в счет оплаты внешней задолжности республики.

12. Инвестиции в долларах США, которые представит компания PALMS & COMPANY в обмен на оплату наших долгов в национальной валюте коммерческим фирмам.

13. Инвестиции в долларах США компанией PALMS & COMPANY в виде "услуги за улугу" за разблокирование блокированных ранее фондов.

14. Инвестиции в национальной валюте в обмен на акции компании, получающей оборудование поставляемое компанией PALMS & COMPANY. Компания PALMS & COMPANY будет выступать в роли инвестиционного банка продавая акции данной компании на местном рынке.

15. Налоговые скидки и моратории.

16. Инвестиции акциями национальных компаний.

17. Инвестиции в нац. валюте в обмен на поставки экспортных товаров.

18. Консолидация инвестиций с другими кредитами.

Процесс подачи заявлений на инвестиции:

Фонд должен рассмотреть бизнес-план, меморандум о частном или публичном размещении ценных бумаг, а также технический отчет от фирм и предпринимателей по развитию бизнеса по представленному проекту. Особое внимание необходиимо уделить имеющимся с правительственными учреждениями соглашениям, которые касаются проекта в той или иной мере, в случае, если подобные соглашения имели место. Необходимо представить всю информацию о налогах, которые предстоит платить и об имеющихся льготах по налогооблажению, импортных тарифах на ввозимое оборудование и льготах по подобным тарифам, наличии экспортных лицензий на произво- димую продукцию, а также документы подтверждающие права на проведение поиска, разведки и эксплуатации упомянутых Вами месторождений.

Заявка для рассмотрения должна быть направлена на английском языке в Фонд в Киркланд, Вашингтон, США со всеми необходимыми приложениями, такими как конспект бизнес-плана, технико-экономическое обонование проекта, меморандум о частном размещении ценных бумаг и/или проспек- ты их публичного предложения. Если какие-либо необходимые для рас- смотрения данного вопроса документы не подготовлены, они должны быть подготовлены совместно с Фондом.

Заявитель должен представить полную информацию и резюме о финансовом состоянии управляющих акционерным обществом, его директоров, основных акционеров, а также представить ясное изложение о том, что инвести- ровал в проект сам его инициатор.

Кроме того необходимо ответить на следующие вопросы:

- Сколько работников было в акционерном обществе по годам с момента его образования и классификация проводимых работ ? - Является ли общество зарегистрированным в качестве "спец-экспортера" ? - Каков процент государственной собственности имелся в компании до 19 октября 1993 года. - Побеждало ли общество какие-либо экспортные аукционы, если да до по каким ценам ? - К каким экспортным тарифам относится продукция производимая обществом ? - Какая производимая обществом продукция не является предметом экпорт- ного лицензирования ? - Каково физическое состояние активов общества, его зданий, станков, оборудования и т.п. ? - Какие обязательства имеет общество перед государством за представленные квоты, лицензии, разрешения на разработку месторождений ? - Какие обязательства общество имеет по социальным программам ? - Какие жилые здания общество построило в прошлом для своих работников ? - Какие налоги платит Ваше предприятие ? - По каким ценам и в каком количестве продавались акции компании ? - Каково общее количество выпущенных акций и какое их количество реализовано ? - Годовой оборот продаж общество по годам ? - Прибыль и убытки по итогам работы общества ? - Общее количество налогов выплаченных обществом по годам ? - Каков денежный баланс общества в настоящее время во всех валютах и по всем имеющимся банковским счетам ? - Общее количество текущих задолжностей компании ? - Являются ли акционеры, управленцы общества избранными в органы госу- дарственной власти ?

Следуюшая информация необходима как часть бизнес-плана :

А). Российские соучредители компании

1. Их финансовое состояние и резюме прошлой работы. 2. Подробные сведения о подписке на акции.

Бизнес- План

B). Западные соучредители (акционеры) компании.

1. Их финансовое состояние 2. Сведения о руководстве компании 3. Данные о регистрации 4. Количество акций и цена приобретения.

В случае, если какие-либо документы не подготовлены, они должны быть подготовлены совместно с нами.

Оплата нашей работы:

РАСХОДЫ: Вам надо будет оплатить все расходы по работе нашей компании над Вашим проектом, сюда включается оплата всех служащих нашей компании, филиалов, представительств, бухгалтеров, экспертов, адвокатов, которые будут работать над Вашим проектом. Расходы оплачиваются исходя из ставки US $ 250 за час работы. Среднее время необходимое для выполнения всех упомянутых выше работ составляет в зависимости от сложности от 1.000 до 2.000 часов. Данные расходы необходимо оплатить в начале работы после заключения контракта. До 75 % данных расходов могут быть оплачены из межгосударственных источников в виде безвозмездного займа Вашей компании, о чем уже упоминалось выше. Обычно соискатель инвестиций увеличивает сумму тpебуемых инвестиций на количество сpедств необходимых для оплаты pаботы и после получения инвестиций таким обpазом покpывает свои pасходы.

КОМПЕНСАЦИИ: После выполнения работы мы получаем комиссионное вознаграждение в размере от 2 до 5 % от количества привлеченного с нашей помощью капитала. Из этого вознаграждения вычитается сумма, оплаченная Вашей компанией в начале работы в счет погашения расходов.

МОИ КОММЕНТАРИИ.

Обычно без помощи опытного Западного инвестиционного банка заявки на инвестиции в частный сектор экономики России отвергаются Западными инвесторами.

За последнее время Конгресс США выделил в своем бюджете US $ 340 млн для инвестиций в экономику России. Однако за 15 месяцев лишь 2,4 % от указанных средств были реально инвестированы в Россию. Это происходит от того, что Российские компании не знают как должным образом подготовить заявку на получение инвестиций и представить ее потенциальному инвестору. Американские управляющие указанными средствами говорят, что существует огромная пропасть между средствами, готовыми для инвестиций и усилиями российских компаний документально пред- ставить свои предложения и запросы. За указанный период времени поступило более 800 заявок на финансирование от Российских компаний, 500 из них были отклонены сразу же из-за ненадлежащей формы и содержания. Чем больше американские специалисты работают в этом направлении, тем меньше у них остается надежд на то, что Российские компании под- готовят и представят надлежащим образом заявки для достижения своих целей. Самые простые задачи, для решения которых в США достаточно нескольких часов занимают в России несколько дней.

Поэтому очень важно для Российских компаний сотрудничать с опыт- ным западным инвестиционным банком, который сможет подготовить их инвестиционное предложение и который сможет действовать в качестве представителей Российских компаний в США, представляя их заявки потенциальным инвесторам.

В 1988 году инвестиционные банки привлекли в общей сложности US $ 335,8 млрд. Только до середины пpошлого года US $ 221.1 млд. получили компании, которые нуждались в средствах через инвестиционные банки. Подобная компетенция инвестиционных банков должна быть использована и Российскими компаниями также в полной мере. Вознаграждение за результаты работы инвестиционному банку не обязательно оплачивать деньгами. Можно заплатить акциями компаний, а также экспортной продук- цией, производимой данным предприятием. Бесплатные услуги, предлагае- мые в этой области правительственными агенствами или консультантами как правило не достигают хоpоших результатов для Российских компаний.

Если бы западные компании смогли бы достичь своих целей самостоя- тельно они бы не оплачивали работу инвестиционных банков и сами бы привлекли в свои проекты US $ 335,8 млрд.. Однако они вновь и вновь прибегают к услугам инвестиционных банков в этой области и видимо тому есть основательные причины.

Я советую Вам внимательно ознакомиться с предложенной нами процедурой привлечения капитала в проекты. Задавайте нам любые вопросы в связи с этим, мы будем отвечать Вам до тех пор, пока все моменты данной процедуры не станут для Вас очевидными. Если Вы нуждаетесь в наших характеристиках и рекомендациях, не стесняйтесь обращаться к нам, мы непременно направим Вам все сведения о нашей компании, Вы сможете убедиться, что наша компания честна, надежна и всегда выполняет взятые на себя обязательства.

Электронная почта Dr. Palms

Palms & Company, Inc., Investment Bankers (1934-1997)

If you are a Russian company that wants capital and you want to employ an investment banking consultant to do this work for you, then read this information. Contact us by e-mail if you are interested in hiring us.

Introduction

RVCA provides a unique combination of merchant and development banking services in Russia and the NIS. Palms & Company, Inc., Investment Bankers, was established in 1934 and became licensed by the Ministry of Foreign Economic Relations of the Soviet Union in 1989. RVCA's mission is to syndicate private sector equity capital and financing in Russia/NIS and leverage it with both Western and Russian/NIS economic assistance and financing programs of governmental and quasi-governmental organizations. RVCA works cooperatively with other private co-investors and quasi-governmental co-investors and lenders to provide debt and equity financing, financial guarantees, international trade finance and currency exchange and value added marketing services. RVCA conducts business from offices in the United States and Russia, Lithuania, Estonia, Latvia, Belarus, Ukraine, Kazakhstan, Bulgaria, and The Netherlands. It arranges investments in projects which secure co-investment participation from strong Western operating companies and one or more of the following organizations.

• The World Bank
• International Finance Corporation
• CCF-Moscow (Credit Commerciale de France, Paris)
• First Russian Investment Fund (Framlington Investment Managers, London)
• All State Insurance Co. Venture Capital Department
• L & A Juice Company, Los Angeles (through them Coca Cola Foods)
• Russian American Investment Fund - Strobe Talbott Ambassador at Large for Russian Affairs
• John I Haas Co. (for breweries revitalization and through them August Busch, Sam Adams, Sam Koch A.B. Miller)
• Defense Nuclear Agency Washington D.C. (defense plant conversion)
• Sovlink Fund (Solomon Brothers, Investment Banker, New York)
• Russian Partners Fund (Paine Webber)
• Russian American Enterprise Fund (Lehman Brothers Fund)
• Barings Securities Fund
• Newstar Fund (Att&T & General Motors Pension Plans)
• European Bank for Reconstruction & Development
• U.S. Trade Development Agency
• Overseas Private Investment Corporation
• U.S. Department of Commerce "BISNIS"
• Center for International Private Enterprise
• U.S. Agency for International Development
• European Union Technical Assistance Programme ($500 million)
• Russian Venture Capital Company of America (Palms & Company)
• Palms & Company, Inc., Investment Bankers
• Ukrainian Venture Capital Company of America
• United States Interbank Currency Exchange
• Defense Enterprise Fund
• Russia And The Republics Equity Partners LP. (RARE)
• Baltic American Enterprise Fund
• Bulgarian American Enterprise Fund
• Templeton Russia Fund * BEA Associates Russia Fund
• Vladivostok Fund
• CS First Boston]
• Scudder Stevens & Clark, Inc.
• Smith New Court PLC
• Fidelity Investments
• For more information about $20 billion in available capital return to previous page

Russians frequently believe they can and should do certain things themselves to find capital. Frequently they do not understand that they cannot themselves do things that independent fiduciaries must do. To do it themselves represents a conflict of interest because they are not objective third parties but have a vested interest in their business. Here are some explanations about how finding capital works which responds to the ideas Russians have this is somethign they can do themselves.

Frequent Russian remark "A":

"1 We will perform Search, selection analytical definition and determination of investment appeal of our projects on territory of republics and advertise them abroad"

Our response.

The production life and financial and marketing life of a company are woven together like the blood and oxygen of a human mechanism.

Capital is given for the creation by the production enterprise of products, but only if there is first established an export market for its production. Production ability provides only the mechanism for the combination of money with human and natural resources to produce product. It is only half the justification for attracting capital. Such production provides only the "possibility" (mosjabiet) for profits for those providing the capital. But this can be realized only if there is a market.

The ability to realize production is not sufficient to attract capital. Production alone converts money into products. Without a market, the necessary second step to convert products back into money (capital plus profit) cannot occur.

A MARKET MUST BE ESTABLISHED AND CONTRACTED WITH BEFORE PRODUCTION IS MADE because if you make production first, you will be at a disadvantage in negotiating sale of that product. If you have product in inventory the buyer will know you are anxious to sell it and offer a lower price. The buyer knows it costs you interest to keep this product in inventory and he knows you need the cash from selling it in order to start new production and pay for labor and raw materials again.

So my FIRST STEP, with your help, must be to identify the world markets for the existing products which your business is currently producing, or capable of producing, and also the general types of products which your machinery, together with human resources and natural resources, have the ability to produce in the future. I will also help you decide what new machinery and technical assistance are necessary to make new products for which there is a demand in world markets.

The companies which have the fastest possibility for creating real results will be

TYPE A * companies which are presently already exporting goods of their manufacture to Europe, Asia and America and wish to increase this activity.

TYPE B * Companies which are not presently exporting but which are producing products for which Palms & Company can find customers in Africa, Asia, Europe, Australia and America

Another possibility will be

TYPE C * companies which have land, buildings, machinery and workers, but which produce nothing now, or are not working at full capacity. But it will take longer to accomplish results for such companies.

TYPE D: The most difficult will be people who have an idea for creating a new business, but the idea is all they have.

The cost will be different for each company depending upon the the size of their production capacity, product types,

For type A and type B companies the cost will usually be $25,000 and require about 6 months For type C companies the cost will usually be about $100,000 and require from 12 to 18 months. For type D companies the cost will usually be about $300,000 and require 12-18 months

My function is to evaluate the information given to me and decide if I think I can help you. If I decide I believe I can help you, then I will invite them to hire me and pay me to do this work. I will then represent you and make contact with international customers for your products in all the world markets, and determine how much international customers now pay for products to their existing suppliers. If you already have customers for your entire production then this step is not necessary.

Then your firm and I and my pricing expert must together calculate how much it will cost for labor, raw materials and expenses to produce the products and whether a profit will result from selling them for the prices that can be obtained on world markets and if the firm can offer products to world markets at lower prices or higher quality then your international competitors. We must also analyze the effect of taxes, import duty, VAT, tariffs, licensing fees etc. and negotiate with instrumentalities of government for moratoriums, exemptions and abatement of regularoty policies.

If the answer is yes, it will lead to contracts to sell and export production and make a profit.

The completion of this work will lead to the NEXT STEP, finding the capital.

Frequent Russian remark "B":

"2. We will search of the prospective investors, classification of their sphere of activity and further work with them under the particular (specific) program, requiring for an investment of the finance."

It is not necessary for you to do this. I have already conducted such searches for investors for the past thirty years. This work does not have to be done by you again. What is needed is to present the results of the FIRST STEP to the potential investors I already know and prepare and present to them a proposal for capital and negotiate the terms and conditions. I will advise you how to do this in accordance with world norms.

Financing for Great Internet Business Concepts $3,300,000,000.00

Incubate Advisor

Advisor

Internet Capital Group

Other Advisory Board members of Internet Capital

Internet Capital Group Portfolio Companies
Internet Capital Strategic Shareholders
Internet Capital Portfolio Companies
Internet Capital More Portfolio Companies

When the step of finding markets and customers is completed we will know the other questions which must be answered, that potential institutional investors will ask. They ask these questions because according to U.S. law, they must disclose this information to the public which buys shares in the investment funds that they manage. To learn more about this click your mouse here. What American Investment Managers Must Disclose to their Customers. Here is a list of some of the possible questions. I have also listed some of the variants for possible solutions. There are many more solutions. I cannot list them all now. I will provide the knowledge and 40 years experience about all variants, as I do the work and decide which variant is the best choice.

• How will you pay suppliers for raw materials?
• How will we pay labor and overhead?
• What new machinery and equipment are necessary to make the products the customers have agreed to buy from us and what will it cost and how will it be paid for?
• How will we meet customers terms and conditions for guarantee of quality and delivery according to agreed time?
• What methods of shipment will we use ?
• What agreements are necessary with Customs Department?
• What agreements are necessary for instrumentalities of government which claim competence in order to have concurrence and acceptance of government to the business activities of the company and its international customers?

VARIANTS OF SOLUTIONS TO SUCH QUESTIONS

• Credit from Export-Import Bank and other contacts of Palms & Co.
• Use of Western Bonded Warehouses for Inventory Financing, quality and delivery guarantees and payment mechanisms and guarantees
• Equity participation by suppliers and investment bankers
• Formation of U.S. or European company by Company as affiliate (subsidiary or filiaal) which is 100% owned by company
• Compensatory Finance ( raw materials in exchange for finished product)
• Merger with international company
• "Guarantee' of Bank letters of credit by Western Banks and U.S. Government
• Import export "swaps" (exchanges)
• Registration of shares of company on Western stock exchanges.
• Use of GAAP (generally accepted accounting practices) mechanisms to create "Collateral"

COST OF SOLVING QUESTIONS OF CAPITAL & FINANCE

The cost will be different for each company depending upon the amount of capital they require. It is not possible for you to pay me later with the money I have given to you.

Financing Amount ...........Retainer..Commision at Closing

$1,000,000 .................$100,000 10.0% ......1.0%

$2,000,000 .................$150,000 7.5% .......1.5%

$3,000,000 .................$200.000 6.66% ......1.75%

$4,000,000 .................$250,000 6.25% ......2.0%

$5,000,000 .................$300,000 6.00% ......2.5%

$10,000,000 ................$400,000 4.00% ......3.0%

$20,000,000 ................$500,000 2.50% ......3.0%

$40,000,000 ................$600,000 1.50% ......3.5%

$50,000,000 ................$700,000 1.4%% ......3.75%

Included in this work are the preparation of:

• Pre-investment analysis
• calculation of amount and use of proceeds of capitalization
• business plan
• cash flow projections
• ROI projections
• Company valuation (pre-investment)
• marketing study
• feasibility study
• concurrence agreements with instrumentalities of government having competence.
• private placement memorandum
• due-diligence report
• structuring of transaction
• syndication to potential institutional investors
• search for strong western operating company co-investor

_________________________________________________________________________

NOW THAT YOU UNDERSTAND WHAT MUST BE DONE AND WHY YOU CANNOT DO IT YOURSELF, I WILL DISCUSS HOW I DO THE WORK

RVCA is engaged in four major activities.

• First, co-investing equity with strong western operating companies and quasi governmental organizations chartered to provide government sponsored financing.
• second, providing selected pre-investment financial technical assistance to secure essential Russian governmental concurrence to investment projects, in direct support of the Fund's investments.
• third, providing currency exchange and profit repatriation facilitation.
• and fourth, providing international markets and supporting portfolio companies with hands-on value added services.

Some portion of investment capitalization must be provided by the project principals in either rubles or dollars or value of land, buildings, machinery, or inventory. Many variants of this basic requirement are possible. Equity contributions from project sponsors can be made in, rubles, "Debt for Equity Swaps" or in-kind contributions of a wide range of tangible and intangible assets, including land, buildings, and machinery.

SPECIAL PRE-INVESTMENT ANALYSIS & DUE DILIGENCE REQUIREMENTS FOR INVESTMENTS IN RUSSIA AND THE NIS

The most important step in the capital syndication process is the 'due-diligence' process of confirming concurrence from Russian / NIS government instrumentalities having competence (authority) with respect to international investment agreements. It should precede all other pre-investment analysis (Technical assessment, feasibility market, business plan, private placement prospectus)

Conventional Western 'Due-diligence' assessments of venture capital portfolio selection rests on the assumption of the existence of an established infrastructure and 'rule of law'. It assumes the presence of uniform non-discriminatory tax practices, regulatory provisions and policy, based upon a political system supportive of private enterprise. The absence of such infrastructure and the absence of a basis for such assumptions in Russia and the NIS creates the necessity for a special set of pre-investment criteria which RVCA has developed.

The overall objective of these innovations is to incorporate into the contractual agreements between the Russian and Western co-investors, all provisions necessary to assure the agreement will be honored by the Russian/NIS government, irrespective of the general legislative practice. This is accomplished by requiring instrumentalities of government which have competence (authority) to acquiesce to and concur in the agreement to become parties to the agreement, so that the agreement can be enforced and the operation of the business can be predicted. It also illiminates the possibility of the company being required to obey new laws which change the rules to less favorable rules. In other countries these are referred to as "Gransfather" clauses.

These requirements introduce an uncommon due-diligence burden upon institutional investors not applicable in Western "deal-making. Palms & Company has developed innovative unconventional mechanisms for expediting such due-diligence for Ruyssian companies.

Entrepreneurs and the technical advisors provided to Russian companies under technical assistance programs of other governments like the USAID, European Bank for Reconstruction & Development (Technical Cooperation Projects), USTDA, OPIC, World Bank, (such as Dr. McCardy at Texas A&M. and Tri-Valley Growers in Encino California, U. S. Department of Commerce 'CABNIS'program, Citizens Network, etc.) are paid by these governments and work for them. These consultants must obey the regulations of their employers. Therefore they may have a conflict of interest and not be able to always do what is in the best interests of the Russian company. That is why it is important for a Russian company to have a Western representative who is employed by them and owes his first loyalty to the russian company. Russian companies should be mindful of the issues of "due-diligence" and "concurrence with instrumentalities of government" before devoting resources to technical assessment, feasibility, market studies, business plans, and preparation of a private placement prospectus. if someone else, who is paid by another government, is doing this work first, it does not mean financing will be obtained or that the work is being done in the right sequence.

We recommend that the due-diligence issues of government concurrence be addressed by Russian companies prior to all other pre-investment analysis work. Without government concurrence most Western companies will not consider investment. Preparing other studies before such concurrence is secured might result in wasted resources. Coordination with Palms & Company., Inc. about concurrence issues before the agreement negotiation process begins between Western entrepreneurs and co-investors is imporant preparation. Facilitation of Russian Government cooperation and collaboration is best arranged by the Russian company with the help of Palms &Company to exlain what is needed. Independent efforts by Western Entrepreneurs to secure Russian government concurrence have generally been very time consuming and for the most part incomplete or unsuccessful. Western consultants, who are paid by Western governments, frequently do not understand that there are Russian regulatory policies which make it necessary to involve to government in the agreement.

CONCURRENCE AGREEMENTS WITH INSTRUMENTALITIES OF GOVERNMENT

Where they apply, concurrence agreements should be negotiated with the following instrumentalities of government relative to the issue in parenthesis.

Central Bank (permission to maintain ruble bank accounts; access to MICE; permission to maintain accounts outside Russia; permission to conduct currency exchange transaction).

Cabinet of Ministers (export licenses, exemption from auctions)

Ministry of Applicable Industry (ratification of the agreement)

Ministry of Environment (no adverse condition)

Ministry of Energy (no discriminatory pricing)

Ministry of Finance (taxes and currency exchange)

Tax Inspectorate (registration)

Ministry of Foreign Economic Relations (registration, currency exchange, export rights and licenses)

Ministry of Health (food products production certification)

Ministry of Industry (concurrence)

Ministry of Justice (does not violate the law, or, exception to the rule)

Ministry of Labor (concurrence wages, pensions, hiring, firing, exemptions from conventional labor contracts and laws)

Ministry of Material Resources (OEM suppliers not subject to government edicts and priorities)

Ministry of Trade (concurrence)

Ministry of Transport (non-discriminatory pricing, priority access)

Chairman Customs Committee & Cabinet of Ministers (export license, VAT, tariffs, import and export duty)

Regional Mayor or Executive Committee( concurrence)

Governor of Oblast or Okrug (concurrence)

Presidential Representative (concurrence)

Head of the Presidential Apparatus (Ratification of the acts of the Ministers)

Chairman Supreme Court ( opinion of legality of agreement under Russian/NIS law)

OTHER ISSUES WHICH REQUIRE CONCURRENCE BY ONE OR MORE MINISTRIES

• Exemption from investment tax by none governmental/non bank investors
• Work permits]
• Import duty exemptions on personal household belongings of expatriate employees in Russia
• Eligibility for Non-Double taxation treaty between U.S. and Russia/NIS
• Exempt from city taxes of 100% on purchase of a residence by employees.
• Regarding the law " On some issues regarding the appraisement of the cost of Privatized Enterprises property and the procedures for change in the charter capital of Joint stock companies in connection with the Revaluation of fixed assets as of January 1 994", Company-investors need to secure waiver of the requirement for 75% stockholder approval at a general meeting with respect to any transaction involving an increase in authorized capital This is an anti "reverse dilution" provision requiring existing stockholders to maintain a constant percentage of ownership irrespective of new capital contributions. ( see Palms & Company evaluation and analysis of the Russian privatization law).
• The right to express valuations in dollars to avoid Russian inflation and currency devaluation.
• Exemption from the mandatory review process of the Property Management Committee in the event of future declaration of bankruptcy.
• The right to use vouchers as legal tender in the capitalization process.

Very specific terminology is required from each instrumentality of government having 'competence' (jurisdiction or authority) over such matters, in order to protect against risk of having the agreement invalidated at a future date. This may seem like an awesome administrative burden, but it isn't, and requires preparation of a document and text, and getting it signed. It should not be regarded as over-kill. These agreements are analogous to "grandfather" clauses and 'level playing field' agreements. The absence of any of these documents could eliminate or significantly diminish the likelihood of attaining the projected "return on Investment" (ROI) [also referred to as profit]. This can happen even if there is a correct technical study, feasibility study and pre-investment analysis. The increased risk of the absence of such "concurrence" could stop an investment from occurring. It is essential to compensate for the absence of a "rule of law" and legal infrastructure with a well prepared investment agreement with concurrence of all instrumentalities of government having 'competence' in the activities proposed.

This pre-investment Due-Diligence activity of securing Government concurrence, constitutes technical assistance and 'education'. It is of an institutional, infrastructure and governmental natures and may result in new legislation or policy. It is not normally a component of Western due diligence. Entrepreneurs should expect above average 'deal structuring' expenses in connection with these activities.

The interest of a 'strong Western operating company' as a potential co-investor, has generally been a prerequisite for obtaining any government funding of pre-investment analysis expenses..

ACCEPTABLE VARIANTS OF C0-INVESTMENT BY THE RUSSIAN COMPANY

• Goods delivered from Third World countries which have debts to Russia (CIS), using protocol credits of Third World nations.
• Credits by Central Bank of rubles to Palms & Company. Co-Investment with Barter payments (furs, cement fertilizer etc.).
• Investment by Russian nationals of rubles, for shares of the companies that receive the equipment invested by Palms & Co.
• Tax abatements and moratoriums.
• Investment with shares of Russian companies.
• Humanitarian aid grants or Hospital reconstruction as a quid-pro-quo for rubles invested as equity.
• Concurrent investment of rubles as a quid-pro-quo for essential commodity exports to Russia.
• Consolidation of investment within another credit.
• Russian Investment with shares of another Russian company that has debts to it.
• Investment with components manufactured by the Russian company and delivered to affiliated companies of Palms & Co. Special Decree.
• "Debt for Humanitarian Aid Swaps"

• Equipment to be shipped to the Russian company in exchange for shares of the companies receiving the equipment.
• Investment of dollars. Long term credits and currency swaps. Compensatory transactions consisting of repayment with future production.
• Investment of rubles by Palms & Co. Investment of dollars by Palms & Co. in exchange for ruble loans.
• Investment of dollars by Palms & Co as a quid-pro-quo for rubles which it receives in settlement of Russian Government debts.
• Investment of dollars by Palms & Company as a quid-pro-quo for rubles which it receives in payment of debts owed to Palms & Co. by commercial firms.
• Investment of dollars by Palms & Co as a quid-pro-quo for unblocking of blocked funds.
• "Investment Swaps". "Currency Swaps"

Capitalization efforts involve expenses of performing due diligence, pre-investment analysis, negotiation of "Quid-Pro-Quo" alternatives and other expenses. Up to 75% of these expenses may be available from instrumentalities of other governments. Where a project is eligible for such financial assistance, it is RVCA policy to seek and require such assistance.

RVCA will review business plans, private placement memorandums and technical reports from Russian firms and entrepreneurs for the development of private sector business in Russia and the NIS. Particular emphasis is placed upon the agreements and documents from Russian instrumentalities of government evidencing concurrence and providing a 'level playing field' to assure predictability of taxes, tariffs, licensing requirements, work permits, customs transport, policies, and procedures.

Request from a Russian company for consideration of an Investment Opportunity By RVCA should be directed to e-mail address palms@PeterPalms.com with all particulars such as synopsis of business plan, feasibility study, private placement memorandum and/or public offering prospectus, to the extent these documents are currently available. If any documents have not been prepared, they should be prepared jointly with RVCA and further independent preparation by the Russian company should be deferred until 'due-diligence' issues are first resolved.

Project sponsors should provide complete, resumes and personal financial statements of officers, directors, shareholders and key managers and provide a clear statement of what investment has been made by project sponsors.

WHAT RVCA NEEDS TO KNOW ABOUT PRIVATIZED RUSSIAN AND NIS COMPANIES WHICH FORM PART OF VENTURES WITH WESTERN COMPANIES FOR WHICH VENTURE CAPITAL IS BEING REQUESTED

In addition to the conventional contents of a 'business plan' and 'private placement memorandum, the following issues should be specifically and particularly addressed in presenting investment proposals to the Fund.

• What was the privatization valuation
• What was the total number of employees 1990-91-92-93-94 (projected) and job classifications
• Is the enterprise registered with the Ministry of Foreign Economic Relations and the Ministry of Economy, and the Council of Ministers' Committee on Current Affairs, as a "special exporter"?
• To what extent has decree No. 1662 of October 19th 1993 been applied to this enterprise? On Oct. 19th 1993, what was the percentage of state ownership of the enterprise.
• To what production maintenance agreements is the enterprise subject?
• What third party financing of employee equity was provided
• What export auctions has the enterprise won and at what price
• To what customs tariffs is the enterprise subject under the government's 1993-95 programme for future development of reforms and and economic stabilization, passed August 1993?
• What products or commodities of the enterprise's production are not subject to export licensing?
• What percentage of post-privatization ownership has been retained by instrumentalities of government?
• What percentage of ownership is held by employees, management, voucher investors and other outside investors and what was the consideration paid?
• What is the description of physical assets, land buildings and equipment?
• What obligations does the firm have for meeting state order quotas
• What obligations does the enterprise have for providing community social services?
• What housing or other facilities has the enterprise created in the past for employees? Which does it still own? Which does it no longer own? What obligations does it have for maintaining such facilities.
• What arrangements does the enterprise have with utilities to supply water, electric, and heating services and non-discriminatory pricing.
• What taxes is the enterprise obligated to pay
• What joint ventures or national or international business collaboration or agreements did the enterprise enter into in the period preceding privatization?
• Does the enterprise currently occupy or possess or have custody of any fixed assets which at the time of their creation were designated as earmarked, allocated or created for or on behalf of any other organization or entity?
• At what price and in what quantity where shares sold at the privatization auction?
• What is the total number of shares authorized and issued at the present time?
• What was total labor cost and what were all other categories of overhead expense and raw materials or component purchase costs in each of the past five years?
• What was total sales (turnover) in each of the past five years and what were the products or commodity components of turnover?
• What was the total tax paid in each of past five years? To whom was it paid?
• What was the annual profit or loss in each of past five years and how was it calculated?
• Is enterprise stock currently traded on any exchange? If so, what has been the recent price history?
• What is the present cash balance in all bank accounts of all currency denominations?
• What is the current debt of the enterprise and to whom is is owed?
• Are any creditors also shareholders.?
• What national and international litigation is presently pending
• Do any managers, employees, shareholders, officers, or directors hold elected positions in any instrumentalities of government?
• What are the accounts receivable and payable of the enterprise?
• Where does the enterprise do its banking?
• What is the proposed post-privatization recapitalization and has it been approved by "GOSCOMIMUSHESTVO"
• DESCRIBE INSTRUMENTALITIES OF RUSSIAN/NIS GOVERNMENT THAT HAVE CONCURRED IN AND CO-SIGNED THE AGREEMENT WITH YOUR RUSSIAN/NIS CO-INVESTOR
• Amount of capital required
• projected ROI on investment
• Proposed structuring of equity participation

GENERAL INFORMATION CHECKLIST: (A) RUSSIAN/NIS CO-INVESTOR

Principals:

1. personal financial statements and resumes of work history

Business:

1. Foundation agreements, laws of the juridical person, written decisions of managers and records of company (minutes, by-laws).

2. How many shares authorized, issued and outstanding, the date issued, to whom issued, price paid.

3. Record of privatization auction, valuation

4. Accounting reports of turnover (profit and/or loss) and value of assets (balans) for past years and estimates for future years

BUSINESS PLAN

1. Description of History of the company.

2. Description of the type industry.

3.buildings machinery and all assets with current book value valuation in rubles and and comparable international marketplace ace replacement cost and current value. 5. List of all debts to banks or others. 6. Current valuation of the company. 7. Business strategy for the next two years. 8. Work papers for all budgets. 9. List of existing customers domestically and international . 10. Description of all products manufactured and their prices. 11. information about all affiliates (filiaal) of company. 12. Description of all other business interests of managers and shareholders and directors. 13. Copies of any patents with English tr translation 14. Name and address of company attorney, bank, accountants. 15. Copies of existing feasibility studies, appraisals and market research studies. 16 Description of how and where and for what price products will be sold. 17. Exact accounting of ho w the investment capital proceeds will be used. 18. Describe how the capital will enable the company to become more successful and profitable. 19. Number of current employees and their salaries. 20. Salaries of managers. 20. Profits paid to shareholders i n last three years and how profits were determined. 21. Description of existing Western partners. 22. Describe previous export results and experience. 23. copies of agreements with existing Western partners. 24. Where is the business registered? 25. Copy of registration. 26. copies of licenses giving right to export production. 27. Central banks' acquiescence to retain export earnings. 28 Do you now have the right to maintain bank accounts outside Russia? State all taxes you are required to pay an d the percentage. 29. Do you have any tax exemptions or government investment incentives. 30. Do you have any documents which prove your ownership of land and buildings? 31. Copies of union and employee employment contracts. 32. Description of social prog rams and expenses. 33. Describe what can go wrong? Describe major management concerns and problems. 34. Are you aware of any specific political, economic, technical, or market risks. 35. Licenses to export production. 36. Foundation documents and registration with tax Inspectorate. 37 Copies of right to conduct currency transactions. 38 Names of banks where you maintain ruble and dollar bank accounts, account names, numbers, MFO number, current balances. 39. Have you ever had Western partners before. If yes describe circumstances and present situation. 40. Have you accepted money from Western sources before? Please describe. 41. Do you owe any money to any Western sources presently? 42. Do any Westerners presently own any ownership in your company or h have they owned such interests in the past. If yes, how were these rights settled? 43. Copies of existing tax privileges, abatements or moratoriums. 44. Are any "grandfather clauses" in existence protecting against subsequent adverse laws effecting invest investment, taxes, or profits? 45 Statement of title to property from Mayor, Regional Executive Committee, Governor or Central Government. 46. Any agreements in effect with Regional or Central Foreign Economic Relations Committees. 47. proposed sharing of owners hip. 48. Proposed sharing of ownership and profits. 49. Copies of labor agreement and employment contracts. 50. Description of social expenses and obligations. 51. description of raw materials suppliers and reliability and terms of payment. 52 hours of annual production activity.

• Every time you make an assumption about a future event please explain the reasoning behind such assumption.
• When you predict something good will happen, also explain what events could happen that could possibly reverse this prediction. Explain how you will change your strategy if such potential difficulties become reality.
• You can never give to much information. The more we understand the easier it is to help you. What you do not think is important, we may believe is very important in a market economy.

• Personal Financial Statements of all officers, directors, stockholders and key management employees. (Not required if publicly owned and traded on a major stock exchange
• Detailed resume of all officers, directors, stockholders and key management employees]
• Total contribution of time and money to date, to the ventur
• Articles of incorporation
• Shares authorized and issued and consideration paid. Shareholders list, date shares issue
• Corporate balance sheet and operating statemen
• DESCRIBE INSTRUMENTALITIES OF RUSSIAN/NIS GOVERNMENT THAT HAVE CONCURRED IN AND CO-SIGNED THE AGREEMENT WITH YOUR RUSSIAN/NIS CO-INVESTORS
• Amount of capital required
• projected ROI on investment
• Proposed structuring of equity participation
• Describe previous experience in Russia/NIS
• Present corporate financial statements
• Existing agreements with Russian/NIS co-investors
• History of the company
• Description of the industry
• Description of present business, products, annual turnover, number of employees
• Description of competition and current world market and prices
• List of physical facilities and equipment
• Copies of incorporation papers, minutes and By-Laws.
• Resumes of proposed management and salaries
• Business strategy for the next two years
• Five year projections of cash flow, profit and loss, balance sheet by quarters. (Include work papaers with assumptions and support for assumptions, mathematical calculations and basis for them
• Detailed marketing plan and budget
• Existing customers and potential customer commitments
• Aging schedule accounts payable and receivable
• Detailed description of capitalization and debt
• Description of subsidiaries, affiliates
• Description of other unrelated business interests of officers, directors and major shareholders
• Names and addresses of company attorney, accountant and banker and all officers directors and shareholders and key management personnel. Current employment if other then with your compan
• Government organizations which have sponsored or supported venture with expense grants or expressed co-investment interest or declined such participation.
• Detailed narrative description of how projected revenues will be generated and use of proceeds will be implemente
• Description of physical and logistical events which must be executed to achieve projected milestones.

• Co-investment with strong Western operating company with equity stake in private sector venture in NIS. Some exports from the project to provide hard currency earnings. Prefer some ruble co-investment from NIS partner. Prefer some co-investment from U .S. Government sector financing programs.
• Act as lead investor/contractor in securing concurrence in agreement between Western company and Russian company from instrumentalities of government having competence. Preparation of pre-investment studies such as technical cooperation projects of European Bank for Reconstruction & Development , Project Development Program of OPIC [market entry strategy assessment, business plan development, prototype "pilot" project implementation, feasibility studies, and other preinvestment analysis], American Business Center program of USDC, and similar pro grams of USAID, USTDA, World Bank.
• Co-investment of rubles by NIS partner
• Encourage acquisition of remaining post-privatization Russian Government owned equity interests with "Debt for Equity" swaps.
• Industries of special interest are: Building Materials Manufacturers, Food Processing, Packaging, and Storage, Defense Conversion, Waste/Scrap Metal Recovery, Fur farms, Automotive Industry, Secondary Oil Recovery, Mining, Freight Forwarding, Forest Products Industry, Housing Construction , Office Building Renovation, Telecommunications.

Joint Ventures are no longer a legally recognized form of business entity in Russia. Re-registration of existing JV's is a mandatory requirement of Russian law. Our preferred form of business entity is a Western corporation registered in Russia as a wholly foreign owned business and stock issued in exchange for Russian/NIS co-investment of fixed assets and in-kind contributions.

RVCA places particular emphasis on financing privately owned companies and companies undergoing privatization and on co-investment and active management participation by strong Western operating companies.

The objective of RVCA is to leverage private capital with public sector co-investment and to incidentally convert existing Russian debt into equity through "quid-pro-quo" agreements and to leverage new investments as a tool for obtaining accommodations from Russian instrumentalities of government. It is the policy of RVCFA to seek and encourage co-investment of "quid-pro-quo" workouts.

IF YOU ARE INTERESTED IN OUR SERVICES IN CAPITAL SYNDICATION, PLEASE CONTACT US BY E-MAIL AT: palms@PeterPalms.com

Here is a list of the organizations that Palms & Company, Inc., will collaborate with as co-investors. As you can see there is plenty of capital available. The reason little of it is being invested is that a proper proposal is not being prepared.

AGRIBUSINESS PARTNERS INTERNATIONAL

region: NIS.

manager: America First Companies

capitalization: OPIC guarantee: $100 million. Still raising capital.

funds invested: The fund is currently evaluating several projects. No investments have been made so far.

investment objective: Equity and debt. Interested in start-ups and joint ventures. Approximately $5 to 10 million.

industries: Agriculture, broadly defined. Includes food firms, infrastructure projects, privatization, food storage and distribution facilities.

contact: Mr. Robert Peyton America First Companies 1004 Farnam Street Omaha, NE 68102 Ph: 402-444-1630 Fax: 402-345-8966

Mr. Andrei Tikhomirov Head of Representative Office Agribusiness Management Co. ul.. Pushkinskaya 5/6 103009 Moscow Russia Ph: 7 (501) 929-7027 (satellite) 7 (095) 292-9718 Fax: 7 (095) 292-9073

ALLIED CAPITAL INTERNATIONAL SMALL BUSINESS FUND

region: Global.

manager: Allied Capital Advisors

capitalization: OPIC loan: $20 million

funds invested: $5 million

investment objective: Equity investments in firms sponsored by qualifying U.S. small businesses.

industries: Basic manufacturing, telecommunications, and service industries.

additional notes: This fund prefers later-stage investments and does not finance start-ups.

contact: Mr. Cabell Williams II President Allied Capital Corporation 1666 K Street, N.W., 9th Floor Washington, D.C. 20006 Ph: 202-331-1112 Fax: 202-659-2053

CARESBAC-St. Petersburg/Small Enterprise Equity Fund (SEEF)

region: Russia (St. Petersburg area).

manager: Small Enterprise Assistance Funds (SEAF), formerly the CARE Small Business Assistance Corporation.

capitalization: $13 million, of which $10 million is from the European Bank for Reconstruction and Development (EBRD).

funds invested: $1,100,250 in completed investments, with an additional $998,000 in approved investments and in the process of completion (Spring 1996).

investment objective: Equity (minority position), and long-term debt. SEAF funds operate on commercially-sustainable principles, investing primarily through equity in amounts from $50,000 to $300,000, with an average size of $150,000. Small-to medium-sized businesses of between 5 and 150 employees with majority Russian ownership and an annual revenues of between $100,000 and $1 million (or ruble equivalent) are preferred.

industries: Food processing and distribution, light manufacturing for export, wholesale and retail distribution, housing, business service providers, and businesses helpful to the environment.

additional notes: Technical support to investees will be provided through organizations such as the Citizens' Democracy Corps, the International Executive Service Corps and the Volunteers in Overseas Cooperative Assistance.

contact: Russia St. Petersburg 190068 Lermontovsky Prospekt 7, 2nd floor General Director David Lingelbach Ph: 011 7 (812) 114-2632 Fax: 011 7 (812) 119-6337

Thomas C. Gibson President Small Enterprise Assistance Funds 1150 Connecticut Ave., NW, Suite 715 Washington, D.C. 20036 Tel: 202-737-8463 Fax: 202-737-5536 Email: seafhq@msn.com

CEENIS PROPERTY FUND, L.P.

region: NIS, Eastern and Central Europe.

manager: Auberndale Properties

capitalization: OPIC guarantee: $160 million; sponsor equity: $80 million; total: $240 million.

funds invested: Beginning first round of investment (March 1996).

investment objective: To assemble a portfolio of quality property assets, through purchase and development, throughout Central and Eastern Europe, Russia, and the new republics of the former Soviet Union. Fund transactions will include combinations of loans and equity investments depending on project and market conditions. The Fund will acquire property interests either directly, or through joint venture.

industries: Commercial, light manufacturing, office, retail, distribution, warehousing, and related residential development projects.

additional notes:

contact: Mr. Noel Gould CEENIS Property Fund 801 Pennsylvania Ave., NW, Suite 930 Washington, DC 20004 Ph: 202-543-8386 Fax: 202-543-8382

THE CENTRAL ASIAN-AMERICAN ENTERPRISE FUND

region: Kazakstan, the Kyrgyz Republic, Uzbekistan, Tajikistan and Turkmenistan.

manager: Central Asian-American Enterprise Fund, Inc..

capitalization: U.S. Government: $150 million over the next two to three years. Additional funds sought from the private sector for co-investment.

funds invested: $31 million with promising 17 medium-sized enterprises, by December 31, 1995. An additional 86 such transactions, worth $178 million, are under consideration. The Asian Crossroads Loan Company (ACLC), created to benefit smaller entrepreneurs, approved loans for 17 projects in 1995, worth slightly more than $1 million. An additional 41 projects, totaling $3.2 million, are under active consideration by ACLC.

investment objective: Equity and debt financing to small and medium-sized enterprises that are commercially viable and offer a reasonable prospect for an acceptable rate of return on investment. Investments must be accompanied by local investment component. Joint ventures with financial participation encouraged, with preference given to U.S. partners but others from Europe and Asia also accepted. Typical investments will range from $250,000 up to $5,000,000. ACLC makes small business loans that generally do not exceed $100,000. In exceptional cases, ACLC will make loans up to $300,000 to enterprises that would otherwise qualify for the Fund's direct investment program, in cases where an equity investment is not deemed appropriate.

industries: Enterprises in infrastructural development such as food processing, distribution and transportation, as well as consumer goods and services.

additional notes: Technical assistance will be provided alongside investment.

As noted, the Fund also administers a small business loan program through the Asia Crossroads Loan Company. Individual loans will usually range up to $100,000, and will have a maturity of up to three years.

contact: Virginia McFarland Central Asian-American Enterprise Fund 1634 Eye St., NW Suite 200 Washington, DC 20006 Ph: 202-737-7000 Fax: 202-737-7077

Central Asian-American Enterprise Fund 44, Aini Prospect Dushanbe Tajikistan Ph: 011 7 (3772) 21-70-56 Fax: 011 7 (3772) 21-28-88 Email: dushanbe@caaef.tadjikistan.su

Central Asian-American Enterprise Fund 1, Turab Tula Street Tashkent 700066 Uzbekistan Ph: 011 7 (3712) 89-11-35 Fax: 011 7 (3712) 89-11-38

Central Asian-American Enterprise Fund 531, Seyfullina Street Almaty 480083 Kazakstan Ph: 011 7 (3272) 637 086 Fax: 011 7 (3272) 694 589

Central Asian-American Enterprise Fund 219 Chui Prospect Bishkek Kyrgyz Republic Ph: 011 7 (3312) 264 295 Fax: 011 7 (3312) 621 230

DEFENSE ENTERPRISE FUND

region: Russia, Ukraine, Kazakstan and Belarus.

manager: The Defense Enterprise Fund, Inc.

capitalization: Department of Defense: $29 million. Additional $40 million anticipated FY96.

funds invested: Approximately $13 million.

investment objective: Equity and debt. The Fund will make investments only in joint ventures involving privatized enterprises or enterprises that commit in writing to privatization. An enterprise will be considered privatized when greater than 50% of the ownership and control is in the private sector. At least one of the partners in any joint venture should be from a country outside the NIS, with preference given to joint ventures with U.S. involvement. Investments will be diversified among smaller enterprises or spinoff enterprises derived from larger defense enterprises, large enterprises that have converted or are in the process of converting, and start-ups formed by former defense or military personnel. Investments range from $1 to $3 million.

industries: Enterprises that include personnel and/or facilities currently or formerly involved in research, development, production or operation and support of the defense sector of four Republics of the former Soviet Union. Particular emphasis given to facilities which helped to produce weapons of mass destruction, as well as firms associated with the production of command, control and communications equipment for military forces associated with these weapons.

additional notes:

contact: Michael Lehner Chief Investment Officer Defense Enterprise Fund Suite 1040 20 Custom House Street Boston, MA 02110 Ph: 617-261-1929 Fax: 617-261-1935

DAIWA FAR EAST AND EASTERN SIBERIA INVESTMENT FUND

region: Russian Far East and Eastern Siberia.

manager: Daiwa Securities, Itochu Corporation, Nippon Investment and Finance, Ltd., Daiwa Institute of Research, Ltd., CRC Institute.

capitalization: Total capitalization of $53 million (Spring, 1996). EBRD: $30 million (investment funds); Japan Ministry of Foreign Affairs Technical Cooperation Fund: $20 million (technical cooperation funds); Nippon Investment and Finance Fund for Equity Investment: $3 million (investment funds).

investment objective: The objectives of the Fund are twofold: (1) to secure a return on investment capital commensurate with risks; and (2) to cooperate with and assist private and privatized enterprises (through equity investments and consulting) in their effort to modernize and restructure themselves. Target companies must be in sound financial condition and have good prospects in their core business. Privatized or private companies which are located in the geographical regions covered by the Fund, and which have no more than 5,000 employees will be eligible for investment. At least 75 percent of the Fund will be invested in companies located in the Russian Far East. Not more than 25 percent will be invested in Eastern Siberia. Investments will range from $330,000 to $3.3 million.

industries: Enterprises in infrastructural development such as food processing, distribution and transportation, as well as consumer goods and services.

additional notes: Technical assistance will be provided alongside investment.

The Fund also administers a small business loan program through the Asia Crossroads Loan Company. Individual loans will range from $1,000 to $50,000 and will have a maturity of up to three years.

No hard liquor, tobacco or firearms, must have a western partner.

contact: Jiro Yamana Daiwa Institute of Research, Ltd. 15-6 Fuyuki Koto-KU Tokyo 135 Ph: 011 81 (3) 5620 5123 Fax: 011 81 (3) 5620 5610

FIRST NIS REGIONAL FUND

region: NIS (60% Russia), Baltics.

manager: Baring International Investment Management Limited Sovlink-American Corporation, Investment Advisor

capitalization: OPIC guarantee: $160 million.

funds invested: $70 million, of which the majority was in direct investments.

investment objective: Equity and direct investments. The purpose of the fund is to achieve long-term capital growth through investment in a portfolio of companies doing business in one or more of the 15 countries of the NIS. The Fund makes both direct investments in unlisted companies and passive investments in OTC and listed stocks. The Fund seeks out companies which are leaders in their respective industries, with progressive and capable management, current and future earnings and cashflow, and compelling valuations on both an asset and earnings basis. Investments generally range in size from $3 million to $10 million.

industries: Diverse.

contact: Richard Sobel Baring Asset Management 155 Bishopsgate London EC2M 3XY England Ph: 011 44 (171) 214-1227 Fax: 011 44 (171) 214-1625

Mr. Terrence J. English Sovlink-American Corporation 1221 Avenue of the Americas New York, NY 10020 Ph: 212-730-4868 Fax: 212-730-2871

Mr. Michael Calvey, Managing Director 10, Uspenski per. Moscow 103006, Russia Ph: 011 7 (095) 299-2227 Fax: 011 7 (095) 200-0613

FRAMLINGTON RUSSIAN INVESTMENT FUND

region: Russia.

manager: Framlington Investments

capitalization: Approximately $100 million. EBRD: $16 million, IFC: $8 million.

funds invested: Approximately two-thirds.

investment objective: Equity position of anywhere from 10-40% is possible, though 20% is preferred. 80% of the funds invested in the first year will go to companies with largely western control, however, projects will also include those with western minority shareholders. Investments will be between $500,000 - $4 million, with projected average of around $2 million. Projects requiring less than $500,000 can be considered if anticipated future financing requirements will raise the Fund's total contribution above $500,000.

additional notes: No hard liquor, tobacco or firearms, must have a western partner.

contact: Gary C. Fitzgerald Managing Director Robert Jenkins Framlington Russian Investment Fund 155 Bishopsgate London EC2M3XJ United Kingdom Ph: 011 44 (171) 374-4100 Fax: 011 44 (171) 382-6432

Connell Gallagher Investment Analyst 30 Konushkovskaya ul.. 123242 Moscow, Russia Satellite Ph: 011 7 (501) 253 4688/253 4689 Local Ph: 011 7 (095) 253-4688/89 Satellite Fax:011 7 (501) 253-4679 Local Fax: 011 7 (095) 253-46 79

FUND FOR LARGE ENTERPRISES IN RUSSIA

See U.S.-RUSSIA INVESTMENT FUND.

GLOBAL ENVIRONMENT EMERGING MARKETS FUND II

region: NIS as well as emerging markets in Asia, Latin America, Europe, the Middle East and Africa.

managers: Global Environment Management Corp.

capitalization: $120 million. OPIC guarantee: $80 million.

funds invested: Approximately $55 million

investment objective: Equity or equity-related investments. The Fund seeks significant minority positions in operating companies or projects with demonstrated cash flows, significant long-term revenue growth potential and high anticipated margins of profits from operations. Projected rates of return to the investor should substantially exceed the current risk-free return available in individual markets, with additional consideration for risks related to the volatility and convertibility of currency and the degree of liquidity for the investor. Investments of up to $10 million.

industries: Environment-oriented industries, especially those engaged in developing, financing, operating or supplying infrastructure projects related to the delivery of clean energy (natural gas and renewable sources) and potable water; also wastewater treatment.

additional notes: Portfolio companies can arrange for OPIC investment insurance against certain political risks and debt financing for projects that involve significant U.S. ownership.

contact: Dr. H. Jeffrey Leonard President Global Environment Management Corp. 1201 New York Ave., NW Suite 220 Washington, DC 20005 Ph: (202) 789 4500 Fax: (202) 789 4508

LOWER VOLGA REGIONAL VENTURE FUND (RVF)

region: Russia: Volgograd, Samara, and Saratov Oblasts.

manager: Volga River Management, Inc. (a partnership of Hancock Venture Capital and Point Venture Partners), for the EBRD.

capitalization: EBRD: $30 million. U.S. AID: $10 million to fund feasibility reports, financial audits, environmental studies, and to provide for skills and "know how" transfer.

funds invested:

investment objective: To make investments with a high potential to produce superior investment returns. Target investments will possess a highly competent management team willing to meet recognized international standards for financial reporting and management performance, and will display a willingness to sell the Fund a significant minority interest, including special board representation. Preferred minimum initial investment of $300,000, preferred maximum initial investment of $3 million.

industries:

additional notes:

contact Joel R. Montgomery General Director The Lower Volga Regional Venture Fund 24 Kovrovaskaya, 3rd Floor 400074 Volgograd Russia Ph: 011 7 (8442) 33-95-64, 93-04-51, 44-00-88 Fax: 011 7 (8442) 93-04-60

AIG-BRUNSWICK MILLENIUM FUND (MAJOR PROJECTS FUND)

managers: American International Group, Inc. and Brunswick Capital Management, Ltd.

capitalization: OPIC guarantee: $300 million.

funds invested: n/a

investment objective: The Fund's objective is to achieve substantial long-term capital appreciation through the purchase, active participation in management, and disposition of a portfolio of direct equity investments in the NIS countries. The Fund will make direct investments in equity and equity-related securities of enterprises directly or indirectly operating in the NIS.

industries: Natural resources, infrastructure, and consumer products.

additional notes:

contact: Mr. Peter Yu Managing Director AIG Capital Partners 70 Pine Street New York, NY 10270 Ph: (202) 770-6661 Fax: 212-514-9628

Ms. Frances Reid Managing Director Brunswick Capital Management 1 Angel Court London, EC2R 7HJ Ph:011 44 (171) 726-8000 Fax:011 44 (171) 726-8118

NEW CENTURY CAPITAL PARTNERS

region: Armenia, Belarus, Estonia, Georgia, Kazakstan, Latvia, Lithuania, Moldova, Russia, Ukraine.

managers: New Century Holdings (NCH)..

capitalization: OPIC: $250 million.

funds invested: $25 million (April 1996).

investment objective: Equity investments in diversified manufacturing, financial, and service industries. New Century Capital Partners seeks substantial majority or minority positions in businesses with hard asset characteristics or international units of value. This fund does not invest in start ups.

industries: Diversified.

additional notes: New Century Capital Partners has offices in Moscow, St. Petersburg, Almaty, and Kiev, but all inquiries should be made to the New York office.

contact: Mr. George Rohr President NCH Advisors 712 Fifth Avenue 46th Floor New York, NY 10019-4108 Ph: 212-641-3200 Fax: 212-641-3201

NEW RUSSIA SMALL BUSINESS INVESTMENT FUND

region: Russia: Moscow, additional cities anticipated.

managers: New Russia Small Business Investment Fund, Inc., a wholly owned subsidiary of the non-profit Fund for Democracy and Development. Corporation "NrsbiF", a wholly-owned Russian operating subsidiary of NRSBIF.

capitalization: Initial funding from the U.S. Department of Agriculture (USDA): Additional capital from USDA, the U.S. Agency for International Development, and private sources.

funds invested: $3,650,000 (July, 1995)

investment objective: Debt. The NRSBIF extends financing to small Russian businesses and Russian-U.S. joint ventures through Russian commercial banks. Businesses normally eligible for NRSBIF support will employ less than 200 employees, have no more than 25% state ownership and have an asset value of less than the U.S. dollar equivalent of $2,500,000. Initially financing will be in rubles, but the Fund hopes to eventually offer dollar financing. Investments currently range from $50,000 to $400,000, in rubles.

industries: Diversified.

additional notes: This program was created to promote sound commercial lending in Russia. Lending is provided through selected Russian commercial banks.

contact: Jack I. Heller President NRSBIF 1501 M Street, N.W. 11th Floor Washington, DC 20005 Ph: (202) 466 4700 Fax: (202) 223 4826 e-mail: 5628502@mcimail.com

Vladimir A. Drovossekov General Director Corporation "NrsbiF" Chistoprudny Bulvar, 12a 3rd Floor 101000 Moscow, Russia Satellite Ph/Fax: ++7 (501) 883 7095 Local Ph: ++7 (095) 975 4982/975 1488/207 8483 e-mail: fddcis@sovam.com

NEW EUROPE EAST INVESTMENT FUND

region: NIS, Central & Eastern Europe.

manager: Capital Research International (London)

capitalization: $130 million. EBRD: $25 million. IFC: $8 million.

funds invested: Three Russian investments as of the first quarter of 1994.

investment objective: Equity, up to 20% stake. Interested in privatized companies or newly established ventures that have some Western management. Investments range from $5-$15 million.

industries:

additional notes: No hard liquor, tobacco or firearms, must have a western partner.

contact: William E.B. Parker Capital Research International 25 Bedford Street London WC2E 9HN Ph: 011 44 (171) 257-6700 Fax: 011 44 (171) 257-6767

RUSSIA PARTNERS FUND

region: Russia/NIS.

manager: Russia Partners Management, L.L.C. (a subsidiary of Siguler Guff & Company, L.L.C.)

capitalization: Closed at $130 million in 1994, however, now open for a second subscription for up to $155 million. Partially guaranteed by OPIC. Russian government: $5 million, and has given a $20 million "back-door" guarantee.

funds invested:

investment objective: Equity and quasi-equity securities of both new and expanding enterprises in Russia, including newly privatized. No more than 15% of the Fund's assets will be invested in any one portfolio company nor more than 25% in any one business sector/ventures. Companies with Western strategic partners are considered desirable. The average investment size is $2 million to $10 million.

industries: Telecommunications, manufacturing, natural resource processing, pharmaceuticals and consumer goods. No investments that will cause environmental damage in Russia, or that will have a deleterious impact on the U.S. economy.

additional notes: Whenever possible, the Fund will attempt to use its investment to leverage loans from other sources, such as EBRD or the IFC.

contact: Orhan Sadik-Khan Managing Director Russian Partners Management, L.L.C. c/o Siguler, Guff & Company Rockefeller Center 630 Fifth Avenue, 16th Floor New York, NY 10011-0100 Ph.: 212-332-5110 Fax: 212-332-5120

Mr. Boris Karlov Mr. Max Scherbakov Managing Directors Russia Partners Management 35, ul.. Myasnitskaya 4th Floor, Room 424 101959 Moscow Russia Ph: 011 7 (095) 207-6020 Fax: 011 7 (095) 207-9140

THE RUSSIAN-AMERICAN ENTERPRISE FUND

See U.S.-Russia Investment Fund.

RUSSIAN VENTURE CAPITAL FUND OF AMERICA

Managed by Palms & Co., this Fund will co-invest as a passive investor alongside other funds. The focus is on projects with strong western participation. This Fund may invest in western partners to enable them to meet co-investment requirements of some government agencies and institutional investors.

region:NIS.

investment type:Debt and equity.

project size:Avg. $5 million.

FOR ALL PROJECT FINANCE CONTACT St. Petersburg, Russia Tate Ulsaker <palms@www.medport.ru> USA: Dr. Pyotr Johannevich van de Waal-Palms <palms@PeterPalms.com> Russian Venture Capital Fund of America Palms Bayshore Bayshore BuildingPalms Bayshore Building, Penthouse Suite #408 Kirkland (Seattle, Washington, U.S.A. 98033-6876 Tel: 1-425-828-6774 & 1-425-827-5528 E-mail (Internet) <palms@PeterPalms.com> <palms@www.medport.ru>

SMALL ENTERPRISE EQUITY FUND

region: Russia (Nizhny Novgorod area).

manager: Small Enterprise Assistance Funds (SEAF), formerly the CARE Small Business Assistance Corporation.

capitalization: EBRD: $5 million.

funds invested: Total committed and approved investments as of the end of the second quarter 1996 equal $1,285,000.

investment objective: Equity (minority position), and long-term debt, but only to borrowers in which the Fund is an equity partner. Small-to medium-sized businesses of between 5 and 150 employees with majority Russian ownership and an annual turnover of between $100,000 and $1 million (or ruble equivalent) are preferred. SEAF funds operate on commercially-sustainable principles, investing primarily through equity in amounts from $25,000 to $300,000, with an average size of $150,000. For the most part, the Fund does not invest in trading companies or start-ups, unless the Russian owner(s) are committed to investing significant time and personal resources in manufacturing or services activities which benefit Nizhny Novgorod and the surrounding area.

industries: Businesses engaged in the production of goods and services beneficial to the local economy, and owned and operated by Russians with an established reputation for integrity, competence, and a commitment to succeeding in a free market.

additional notes: Technical support to investees will be provided through organizations such as the Citizens' Democracy Corps, the International Executive Service Corps and the Volunteers in Overseas Cooperative Assistance. No hard liquor, tobacco or firearms.

contact: Russia Nizhny Novgorod 603000 150 Gorky Street, Rm. 707 General Director Eric T. Johnson Tel: 011 7 (8312) 35-42-85, 35-44-00 Fax: 011 7 (8312) 35-43-45 Email: seef@kis.ru

Thomas C. Gibson President Small Enterprise Assistance Funds 1150 Connecticut Avenue, N.W. Washington, D.C. 20036 Tel: 202-737-8463 Fax: 202-737-5536

SMOLENSK REGIONAL VENTURE FUND

region: Smolensk Oblast, Russia.

manager: Siparex

capitalization: EBRD: $12 million.

funds invested:

investment objective: Equity of up to 49% of capital. An EBRD Regional Investment Fund, the Smolensk RVF will concentrate on facilitating modernization, expansion, and/or restructuring of privatized companies. Investments range from $300,000 to $1.2 million. Capital provided by the Smolensk RVF must be applied to finance a new project, including working capital. The principal criterion for evaluating prospective investments is whether or not the return on a proposed investment project is commensurate with the risk.

industries: No hard liquor, tobacco or firearms, must have a western partner.

additional notes: The Fund will provide some technical assistance alongside investment.

contact: Mr. Philippe Lambert Investment Manager Siparex 139 rue Vendome 69006 Lyon France Ph: 011 33 (78) 52-41-07 Fax: 011 33 (78) 52-61-63

Mr. Henri Oliva Project Manager SIGEFI ul.. Vorobiova 17 214015 Smolensk Ph: 011 7 (081) 223-4789 Fax: 011 7 (081) 226-0693

SOUTHERN RUSSIA REGIONAL VENTURE FUND (RVF)

region: Russia: Rostov-on-Don Oblast, Stavropol and Krasnodar krais.

manager: Credit Agricole Consultants and Siparex Ingenierie et Finance, for EBRD.

capitalization: EBRD: $30 million. Republic of France: Ffr120 million for technical assistance.

funds invested:

investment objective: Equity of up to 49% of capital. An EBRD Regional Investment Fund, the Southern RVF will target investments that lead to modernization, expansion, and/or restructuring of privatized companies. Investments range from $300,000 to $3 million. Capital provided by the Southern Russia RVF must finance a new project, including working capital. The principal criterion for evaluating prospective investments is whether or not the return on a proposed investment project is commensurate with the risk.

industries: No hard liquor, tobacco or firearms, must have a western partner.

additional notes: The Fund will provide some technical assistance alongside investment.

contact: Mr. Philippe Lambert Investment Manager Siparex 139 rue Vendome 69006 Lyon Cedex 06 France Ph: 011 33 (78) 52-41-07 Fax: 011 33 (78) 52-61-63

Mr. Alexander Gaiss, or Mr. Anthony Bendien Southern Russia RVF International Business Center Beregovaya St. 10 344008 Rostov-on-Don Ph: 011 7 (8632) 66-59-18 Fax: 011 7 (8632) 66-59-18

ST. PETERSBURG REGIONAL VENTURE FUND (RVF)

region: Russia: the city of St. Petersburg and Leningrad Oblast.

manager: St. Petersburg Regional Venture Fund Management GmbH & Co. KG

capitalization: EBRD: $30 million. Federal Republic of Germany: $20 million, for consulting services to enterprises in which the St. Petersburg RVF invests.

funds invested:

investment objective: Equity investments in medium-size private sector enterprises with no more than 25% state ownership and up to 5,000 employees. Investments targets should have a strong position in the domestic market, and will not necessarily have a foreign partner or hard currency earnings. Preferred minimum investment of $300,000, preferred maximum $3 million. Capital provided by the St. Petersburg RVF will finance the acquisition of productive assets, including associated working capital. The primary investment criterion will be that the expected return on investment will be commensurate with the risks.

additional notes: The Fund may also provide some technical assistance along with investment.

industries: No hard liquor, tobacco or firearms, must have a western partner.

additional notes:

contact: Mr. Wolfgang Engler Managing Partner St. Petersburg Regional Venture Fund Management GmbH Hamburger Allee 2-10 60486 Frankfurt am Main, Germany Ph: 011 49 (69) 79 50 00 24 Fax: 011 49 (69) 79 50 00 60

Mr. Gennady Gruzdkov St. Petersburg and Leningrad Oblast Regional Venture Fund W.O. Bolshoi Prospekt 10 199034 St. Petersburg Russia Ph: 011 7 (812) 325-8474 Fax: 011 7 (812) 325-8477

URALS REGIONAL VENTURE FUND

region: Russia: Sverdlovsk, Perm and Chelyabinsk Oblasts.

manager: Fleming Investments Ltd.

capitalization: EBRD: $30 million.

funds invested:

investment objective: Equity investments in private sector enterprises with no more than 25% state ownership and up to 5,000 employees. Investments targets will not necessarily have a foreign partner or hard currency earnings; the fund is expected to focus on enterprises that have a strong position in the domestic market. Preferred minimum investment of $300,000, preferred maximum $3 million.

industries: No hard liquor, tobacco or firearms, must have a western partner.

additional notes:

contact Mark V. Jarvis Urals Regional Venture Fund Fleming Investments Moscow Representative Office ul.. Pushkinskaya 7/5, kv. 4 103009 Moscow, Russia Ph: ++7 (095) 247 9049 Fax: ++7 (095) 247 9049

George S. Horton Fleming Investments Ltd. 25 Copthall Avenue London DC2R 7DT Ph: +44 (171) 638 5858 Fax: ++44 (171) 382 5000/60

U.S. RUSSIA INVESTMENT FUND

region: Russia.

manager: The U.S. Russia Investment Fund

capitalization: U.S. AID (total anticipated): $440 m.

funds invested: $96 million, in 77 projects, as of April 1, 1996.

investment objective: The Fund will consider investment proposals from enterprises as long as they are commercially viable and exhibit the potential for growth and profit generation. The business should have a committed and progressive management team and a coherent business plan or thoughtful vision for development. The Fund is chartered to offer financing and management assistance to privatized Russian enterprises of all sizes. Investments have ranged from $20,000 to approximately $11 million.

industries: Diversified.

additional notes: This fund was formed through a consolidation of the Fund for Large Enterprises in Russia and the Russian-American Enterprise Fund. TUSRIF also has a small business lending program that works through Russian banks and lending institutions to make small loans to small enterprises.

contact: Jacquie Tellez Project Coordinator The U.S. Russia Investment Fund 545 Fifth Ave., Suite 300 New York, NY 10017 Ph: 212-818-0444 Fax: 212-818-0445

Project Coordinator The U.S. Russia Investment Fund Tsvetnoy Boulevard, 25/3 103051 Moscow Russia Ph: 011 7 (095) 960-3131 Fax: 011 7 (095) 960-3132

Regional Director, Russian Far East Amethyst Hotel 5A L.Tolstogo Street 680000 Khabarovsk Tel/Fax: 011 7 (4212) 22-77-14

Regional Director, St. Petersburg Italianskaya Ul. 5, Office 53 190000 St. Petersburg Ph: 011 7 (812) 315-7035 Fax: 011 7 (812) 315-8264

Regional Director, Ekaterinburg 15A Gogol Street - 1st Floor 620075 Ekaterinburg Ph: 011 7 (3432) 59-29-09 Fax: 011 7 (3432) 59-29-08

Regional Director, Rostov-on-Don Ul. Bergovaya 10, 11th Floor 344007 Rostov-on-Don Ph/Fax: 011 7 (8632) 67-17-68

THE WESTERN NIS ENTERPRISE FUND

region: Western NIS (Belarus, Moldova, and Ukraine)

manager: Western NIS Enterprise Fund, Inc.

capitalization: The U.S. Government has capitalized this Fund with $150 million in foreign assistance appropriations over the next 3-4 years.

funds invested: $12 million committed as of December 31, 1995.

investment objective: Equity and debt. The fund actively seeks corporate and financial partners from the U.S., Europe, and elsewhere. The Fund's focus is on small and medium-sized private and privatizing firms, which includes firms with as many as 750 workers, although most loans and investments are aimed at firms that are considerably smaller than this threshold.

industries: Food processing, distribution, construction materials, other light manufacturing.

additional notes: The Fund offers technical assistance alongside investment Additionally, the fund has been encouraged to use its U.S. Government funding to attract other resources for private sector development in the three states.

contact: Scott A. Carlson President & CEO Western NIS Enterprise Fund 15 W. 39th Street, 11th Floor New York, NY 10018 Ph: 212-556-9320 Fax: 212-556-9321

Natalie A. Jaresko Western NIS Enterprise Fund 4 Muzeney Pereulok 250001 Kiev, Ukraine Ph: 011 380 (044) 291 02 80, 291 02 81, 291 02 82 Fax: 011 380 (044) 291 02 89

UKRAINE FUND

region: Ukraine.

manager: Claflin Capital Management

capitalization: Originally $12 million, $30 million now being raised.

funds invested: $6 million in 20 projects.

investment objective: Equity. Ukrainian nationals should have a sizeable share of the venture. Average investment is $250,000, though up to $1.5 million may be considered for portfolio investments, over a period of time.

industries: Companies producing for the local Ukrainian market. The Fund has invested in real estate, food processing, and distribution, among others.

additional notes:

contact: Valeriy Schekaturov Ukraine Fund 20 Pushkinskaya, Apt. 26 252004 Kiev Ukraine Ph: 011380 (44) 228 6216 Fax: 011380 (44) 228 0916

Margaret Daniels Partner Claflin Capital 77 Franklin Street Boston, MA 02110 Ph: 617-426-6505 Fax: 617-482-0016

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THE function of the representatives of Palms & Company, will be to obtain copies of all Laws about taxes, customs department, export laws, duty, tariffs, VAT, licenses and instrumentalities of government which claim to exercise competence about international commerce activities of the company. These must be in both English and the official language. You may translate them yourself or hire translators to do it for you. You will also do the work of interlocutor/liaison with the government to obtain their concurrence to the agreements of the company about international activity

MY FUNCTION

My function is for me to evaluate create the agreements for capital and finance and to negotiate them for the company with the investors and financiers and to advise you what agreements you must obtain from the instrumentalities of the government according to the laws you have provided to me.

It would be useful to the Governor to engage my services as consultant to advise them about the way the legislation should be changed to remove the barriers and obstacles in the law which prevent and discourage economic development of their economy and prevent international investment.

As part of this work, I also offer to act as their representative to publicize the changes in law which we design together. This publicity activity will be directed to Western investors for the purpose of renewing their interest in investments in republic and management of other mutually advantageous work, based upon improvements in the laws.

As I have described to you in this message the beginning of your work must lie in a somewhat different direction then you have thought, if you want it to bring concrete results. The result will then be as you wish it to be.

The economic policies and regulations in Russia are destructive to its economy and long term improvement of economic conditions of the people and government. A belief in shortages has produced a policy which places short term exploitation and survival ahead of long term interests. This is a short-sighted and disadvantageous policy because:

• In the next 50 years the nature of energy will change radically away from fossil fuel orientation. With vision one can see that energy prices will fall. The long term wealth of your republic lies in exporting value added products.
• The long term world demand for fuel is dropping below production and will result in lower prices. Your Republic has productive potential to exchange its production with market economy nations for energy if that ever becomes necessary.
• Acceptance of short term solutions will limit the potential for economic development. In the long term, the utilization of human resources is essential for economic development.
• Short term promises of will bring less solution than long term GDP expansion.
• Russia is economically weak. Its short term support of government and an elite will exhaust it natural resources unless human resources are developed as a long term export.

For all these reasons, present economic and political policy destroys opportunities for long term economic development. Only by adopting world norms of economic policy can your Republic join the global economy which is the only possible source of support for its economic advancement.

In the long term, my ability to implement economic development in your Republic and expansion of GDP through capital investment, will be greatly affected by the economic policies and regulations of your government.

Without government cooperation, I can only create isolated instances of economic success in industries that will become "islands" or "free trade zones" within a nation that as a whole entity cannot participate in economic progress.

I believe it is useful to create such "islands" to demonstrate to government officials the potential of their nation and to earn their future support for policies that will allow the spread (proliferation) of these "models" throughout the economy. But it would save the government and the population many unnecessary economic problems if government policies would follow global norms of economic policy as soon as possible.

The real priority is not capital, but fair government regulations within your Republic that demonstrate that the existing human, natural and machinery resources can be utilized properly and fully and function freely. If these existing resources are prevented from functioning normally, then no amount of capital can change the problem of low per-capita GDP (Gross Domestic Product) production. These elements of economic life must be permitted function freely without regulations that destroy them. The real assets of your Republic are its human resources. The freeing and enabling of human creative potential to function is the real solution to economic development, not just capital.

There is a lot to be done. The first step is permission to do it. That means legal freedom to function economically.

Government Sponsored Enterprise Funds and Other Investment Funds Focusing on the NIS Region

ENTERPRISE FUNDS AND INVESTMENT FUNDS

As commercial opportunities continue to emerge in the NIS, it is necessary to develop new and creative means of financing. The U.S. government is responding to these needs by assisting in the development of enterprise funds. The purpose of these enterprise funds is to address the general unavailability of foreign and domestic capital to private and privatizing firms. By linking western investors with NIS companies, these funds will help demonstrate that investment in NIS can be profitable and sustainable over the long run.

Many private investment funds are also beginning to emerge, some of which are included on the following list.

• ALLIANCE SCANEAST FUND
• AMERICAN INVESTMENT GROUP OF NAPLES
• BRUNSWICK FUND CARE SMALL BUSINESS ASSISTANCE CORPORATION
• THE CENTRAL ASIAN-AMERICAN ENTERPRISE FUND
• DEFENSE ENTERPRISE FUND
• EBRD SMALL BUSINESS FUND
• FAR EAST REGIONAL VENTURE FUND
• FIRST INVESTMENT VOUCHER FUND
• FIRST NIS FRONTIER FUND
• FLEMING INVESTMENT FUND FOR RUSSIA
• FRAMLINGTON RUSSIAN INVESTMENT FUND
• THE FUND FOR LARGE ENTERPRISES IN RUSSIA
• JUNCTION INVESTORS LTD.
• NEW RUSSIA SMALL BUSINESS INVESTMENT FUND
• NCH ADVISORS
• NEW EUROPE EAST INVESTMENT FUND PAINE WEBBER
• RUSSIAN PARTNERS FUND
• PIONEER FUND
• THE RUSSIAN-AMERICAN ENTERPRISE FUND
• RUSSIA AND THE REPUBLICS EQUITY PARTNERS LP.
• RUSSIA/NIS MAJOR PROJECTS FUND
• RUSSIAN SECTOR DEVELOPMENT CORPORATION
• RUSSIAN VENTURE CAPITAL FUND OF AMERICA
• SMOLENSK REGIONAL VENTURE FUND
• ST. PETERSBURG REGIONAL VENTURE FUND
• UKRAINE FUND
• URALS REGIONAL VENTURE FUND
• THE WESTERN NIS ENTERPRISE FUND