Next Street Financial LLC © Copyright 2009 – CONFIDENTIAL 1 October 22, 2009 Open Classroom Policy Series: The 21 st Century City

Next Street Financial LLC © Copyright 2009 – CONFIDENTIAL 2 3  vision  innovati on  impact 3

Next Street Financial LLC © Copyright 2009 – CONFIDENTIAL 3

4 The merchant bank and inner city small business »Next Street is a 21st century merchant bank founded to transform the way advice and finance are provided to inner city small business across the U.S. »We provide a range of high-quality business advisory services and access to customized financing to urban small businesses with $1-$100M in revenue with a sweet spot of $5-$50M and solid business fundamentals »Our role as a trusted advisor mitigates risk with customized, long-term strategies that help a company grow »Our model represents a new institution for a new economy: a for-profit business focused on maximizing the growth, profitability and success of our portfolio of high-performing urban businesses, thereby enhancing economic development, wealth and job creation in these markets

Next Street Financial LLC © Copyright 2009 – CONFIDENTIAL 5

6 The right time »Shifting demographic trends »Big Retail and Big Real Estate paving the way »Initial success of private equity funds »Growing political focus

Next Street Financial LLC © Copyright 2009 – CONFIDENTIAL 7 America’s inner cities: small businesses poised for growth »More than 25,000 small businesses with annual revenue of $5M - $100M »More profitable than average US small business »Debt default: 1/2 of average small business rate, 1/3 of average large business rate »Locations create competitive advantages »Underserved market »Underutilized workforce

Next Street Financial LLC © Copyright 2009 – CONFIDENTIAL 8 Inner City Small Business Performance Inner City 100 firms outperformed sector peers Inner City 100 Firm Revenue Growth vs. Sector Averages Source: Initiative for a Competitive Inner City; Michael E. Porter; SICE and US Census Data, 2000

Next Street Financial LLC © Copyright 2009 – CONFIDENTIAL 9 Impact on Inner City Economies Growing inner city companies can have enormous impact on inner city job creation and inner city economic development Inner City 100 Job Growth vs. Total Inner City Job Growth, Source: Initiative for a Competitive Inner City; Michael E. Porter; SICE database; ICIC analysis of Inner City 100 survey data,

Next Street Financial LLC © Copyright 2009 – CONFIDENTIAL 10 Inner city business owners: underserved by traditional financial services and advisory providers

Next Street Financial LLC © Copyright 2009 – CONFIDENTIAL 11 The imagination gap: barriers to capital and advice »“Plain Vanilla” finance; limited access to growth capital »Decline in relationship management »Generic advice »Bank loan denial rates 5x higher for ethnic- and minority-owned businesses »Fragmented public-sector and nonprofit solutions »Limited investor interest

Next Street Financial LLC © Copyright 2009 – CONFIDENTIAL 12 Leveraging a unique convergence

Next Street Financial LLC © Copyright 2009 – CONFIDENTIAL 13 Conclusion »Strong inner city small businesses are essential to strong inner city economies and ultimately the success of the 21 st century city »The need and opportunity is there »Revitalize our urban areas »Create jobs for inner city residents »The challenge: »Leadership »Utilize existing funding sources differently »Create innovative public/private partnerships »Recognize the need for intermediaries