We are pleased to announce the official closing of Nth Power Fund IV. The supplemental fundraising time allotted us by the limited partners resulted in securing an additional $14 million of capital from three new investors.

The final investment closed on January 7, 2008 and with that the total size of the fund is $170 million including the 1% commitment by the General Partner.

Housekeeping

Within the next few weeks, we’ll be distributing final closing packages to all investors.
These will consist of:

• Fully executed Limited Partnership Agreement
• Fully executed Subscription Documents
• A complete list of the Limited Partners of Nth Power Fund IV
• If appropriate a copy of your executed side letter
• If appropriate, copies of certain side letters pursuant to paragraph 8.8 of the Limited Partnership Agreement

Reflection on the Markets

The investment environment for energy technology across all stages of venture capital remains robust. Drivers of this opportunity – high energy commodity prices, new material applications, policy and regulation, etc – are strong and appear to have solid underpinnings. The concerns over an economic slowdown or recession notwithstanding, the fundamentals behind innovation in energy technology show no sign of letting up.

To whit, by Nth Power’s measure, nearly $3.5 billion dollars were invested in US based energy technology startups in 2007. This is an increase of 20% over the 2006 investment level. The biggest deals came in the area of new solar technology, biofuels and coal gasification. But the diversity of deals spanned many more areas including wireless sensor technology, lighting applications, building materials, energy management software and IT solutions, and miniature fuel cells, to name a few.

In some cases, valuation is becoming a concern as more dollars seek to find homes in energy technology start ups. In this kind of environment, we believe Nth Power’s experience in identifying breakout opportunities, and ability to appropriately price early stage deals will be fundamental.

Of course, proper valuation of deals is only one ingredient to our successful deal execution. The magnitude of investment dollars continues to attract talented management teams to the energy technology arena. The competition for top talent is intense in some cases, but over the last 12 months we were able to secure outstanding senior management to several of our Fund IV companies.

Sourcing is another key element to our deal execution. The market is certainly more competitive; nearly every VC now has some effort in “clean tech”. Nth Power, however, remains an important target VC for many startup entrepreneurs. We are, however, being proactive in certain areas in order to find opportunities where other funds may not be looking.

New Team Members

Last summer, Nth Power was lucky enough to add two very talented recent MBA graduates to our investment team. Matt Price (Haas, UC Berkeley) and Brian Walsh (Sloan, MIT) came “ready made” with a deep understanding of the energy technology markets and the role played by venture capital in energy innovation. Both were co-founders of the energy clubs at their respective MBA programs, and both spent time around energy technology markets before business school.

New Website

If you haven’t noticed, we launched our new website in December. While displaying iconic images associated with new energy technology (wind and solar), the content remains true to our commitment to span every and all opportunities where Nth Power’s fundamental understanding of technologies and markets are creating value in early stage venture capital investing.

We’d love your feedback. Please pay a visit: www.nthpower.com

2008 Annual Meeting

We hope you are planning on joining us at the 2008 Nth Power Fund Forum in Napa Valley, CA scheduled for May 7-9. If you need details, please contact Wendie O’Dwyer at our main number.


We thank you for your support and look forward to seeing you soon.

Regards,

The Nth Power Team