Banknorth Group Invests in Village Ventures Network; Investment to be Distributed in the New England Fund Network.

Business Editors

WILLIAMSTOWN, Mass.--(BUSINESS WIRE)--Nov. 1, 2000

Village Ventures, Inc., and Banknorth Group, Inc., (NASDAQ:BKNG), have reached an agreement in which Banknorth will invest $7 million in a number of New England venture capital funds in the Village Ventures network.

The investments will be made directly by Banknorth's subsidiary banks located within the market area of the funds, as Banknorth's market footprint matches many of the Village Ventures target areas in New England. The arrangement allows Village Ventures to become a distribution vehicle for venture capital investments made by the bank and spreads the reward and risk across a number of investments in different markets with different managers, according to Village Ventures' Chief Executive Officer, Matt Harris.

Harris said Village Ventures welcomes the investment from such a prestigious financial services company. "Banknorth is an outstanding institution, committed to the communities that it serves," he said. "We are pleased that Banknorth recognizes the value of the Village Ventures model. This will provide Banknorth with a ready made platform to participate in early stage venture capital in its local markets."

Richard Fitzpatrick, Executive Vice President at Banknorth, said the Village Ventures model presents an opportunity to invest in new companies in markets in which their banks have a strong presence. "We think that the Village Ventures model of community based funds fits well with our strategy of being involved in the economic development of the communities we serve. We can't think of a better way to participate in this arena of early stage venture capital."

The Banknorth Group is an $18.5 billion banking and financial services company with headquarters in Portland, Maine. It is the third largest banking company in New England and has adopted a community approach to banking. Banknorth prides itself on featuring personalized services backed by the resources of a large financial services enterprise.

The affiliate banks of the Banknorth Group are Peoples Heritage Bank in Maine; Bank of New Hampshire; First Massachusetts Bank; Franklin Lamoille Bank in northwestern Vermont; First Vermont Bank; The Howard Bank in central and southern Vermont; Evergreen Bank in upper New York state and GBT, a division of First Massachusetts Bank, N.A., which serves northern Connecticut.

Village Ventures was founded in January, 2000 by Harris and Chairman Bo Peabody. It was launched in June after securing commitments of $80 million from a group of investors led by Bain Capital and Highland Capital Partners, both of Boston, and New York's Sandler Capital Management.

Editor's Note

Village Ventures is an operating company that manages a network of nine early-stage venture capital funds in seven states and acquires significant stakes in the promising companies emerging from those portfolios. Village Ventures supports funds in the Pioneer Valley region of Massachusetts, the Champlain Valley region of Vermont, Boise, ID, Portland, ME, Berkshire County, MA, Worcester County, MA, Providence, RI, Nashville, TN and Charlottesville, VA. Village Ventures has also invested directly in such companies as MindBranch.com, North Adams, MA, BlueTarp, Portland, ME, HealthLeaders, Inc., Nashville and Profile Systems, Inc, West Springfield, MA.