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Eric and Hunter:

This is the first of two emails on our portfolio companies for which we are also raising capital.

The attached presentation on Solexel was put together for a colleague in Saudi Arabia. Solexel is the high efficiency, low cost solar panel manufacturer. SunPower (NASDAQ:SPWR) was chosen by Solexel as the strategic partner after reviewing term sheets from Trina and GCL-Poly. Solexel expects to bring closings from $38.5mm, to date, to about $49mm by next week. Gentry closed this summer with most of the insiders along with SunPower - http://mobile.bloomberg.com/news/2012-05-17/solexel-raises-25-million-for-silicon-gas-based-solar-panels?category=%2Fnews%2Fenvironment%2F. Solexel is aiming to close the round ($60mm raise; $130mm pre-money valuation) by early January.

Please find some salient details about Solexel below:

Low-cost manufacturing due to proven, breakthrough manufacturing technology - Solexel (the "Company") has demonstrated the ability to manufacture photovoltaic (PV) cells at costs well below current state of the art. Importantly, the process uses tools and techniques proven in the semiconductor industry, along with key manufacturing innovations from Solexel. The resulting process eliminates a number of steps from the traditional PV manufacturing process, reducing substantially the costs for raw materials, energy and capital expenditures. The Company is currently manufacturing at pilot scale PV cells at its fab facility in Milpitas, CA, and has a clear path for scale-up. The Company is on a trajectory to achieve a cost of $0.37/W for modules using its PV cells by 2016, compared to the industry norm today of about $1.00. Company management believes that the theoretical limits of traditional manufacturing techniques will not allow competitors to reduce costs below $0.70/W. The Company's technology has been called "The Holy Grail" in mono-crystalline silicon fabrication by the leading expert in semiconductors for the US Patent Office. The technology was independently reviewed for investors by the former head of the DOE's National Renewable Energy Laboratories (NREL), who called the technology "revolutionary and disruptive", and said that it "addresses all critical issues" in using thin silicon.

Industry Validation and Strong Order Book - Solexel has MOU's for purchases representing 2.5x the Company's initial capacity with a broad range of customers, distributors and strategic partners, including the leading global solar distributor, and the leading global solar developer. The company has a strategic partnership with Owens Corning, the #2 US roofing company, for building-integrated PV roof shingles, and was awarded a $13 million DOE grant for this initiative - the largest such grant awarded. Solexel has been pursued for a manufacturing partnership by many of the leading global solar companies. As mentioned, but worth repeating, three leading companies were vying to form a partnership with Solexel, and the Company selected SunPower who closed alongside us a few months ago.

High-efficiency cells - The Company produces very thin, mono-crystalline silicon PV cells which have efficiency (i.e., ability to convert sunlight to electricity) that rivals the top-end of the market. The market pays a premium for efficiency. SunPower currently gets $1.50/W for its cells which are the most efficient in the industry at 21%. However, until now, there has been a trade-off, and high-efficiency cells are substantially more expensive to produce. The Company's products have already been NREL rated at 18.5% efficiency; they are currently producing cells at 20.6% efficiency, and have a clear path to 23.5% + efficiency.

Back-contact technology provides numerous benefits - Solexel's unique cell design has all the electronics connected via a pliable "backplane". This helps increase efficiency, creates durability (which attracted Owen's Corning to establish a JV to produce shingles using Solexel technology), enables an aesthetic all-black front, and results in greater cell utilization in the event of shade or dirt on the front. Traditional PV modules suffer power reduction of as much as 1/3 of an entire module in the event a single cell is incapacitated, while Solexel's modules isolate the problem to only the immediately affected cells.

Strong IP Protection - Solexel has more than 130 patents issued, pending or licensed. It has exclusive rights within the solar industry for a number of manufacturing tools pioneered in the semiconductor industry.

Business Model not Dependent on Subsidies - Solexel's low-cost, high efficiency cells are designed to enable "grid-parity" electricity production - i.e., ability to produce electricity at cost which rivals that from fossil-fuel power plants. Some analysts have projected that with such parity, solar-based electricity could account for 10% of total electricity production, up from 1% today.

Exceptionally Strong Management Team - Solexel's founder and CTO is a Stanford PhD, a prolific inventor (over 200 patents), and has started and successfully exited 3 previous ventures. The CEO, who was recruited by the Company's lead VCs, previously was President of Seagate and Maxtor, where he oversaw significant growth in an industry with similar characteristics to the solar industry. Solexel's head of marketing, previously headed global sales and marketing for BP Solar, a leading solar company.

Attractive Valuation - This round is priced at a $130 million pre-money valuation, more than a 80% reduction to the last equity round which valued the Company at more than $720 million. Solexel has raised more than $115 million in equity to date, from firms including Kleiner Perkins, Technology Partners, Oak Hill, DAG and Ecofin. The Company has also been awarded more than $17 million in DOE and NSF grants. The Company has been awarded a financing package from the Malaysian government that includes $150 million in very low-cost, flexible loans, $12 million in grants, and tax incentives that combined could be worth more than $1 billion. Of note, this round was re-priced this fall, in the face of severe pricing pressures in the solar industry.

Of course, there are relevant risks as described in the Private Placement Memorandum, which also has more complete company and industry information. If you are interested, I will forward PPM and additional information. Management is available for a call or site visit, if there is interest.

Kind regards,

Evan
_________________________________________

Evan A. Haymes
Sr. Managing Director, Partner

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