Queen City Angels Forms Second Technology Fund with $1 Million Match from State; Funds to Be Used to Invest in Young, Innovative Companies; Spur Job Creation.

CINCINNATI -- The Queen City Angels (QCA) today announced that it will begin accepting applications from companies for funding by the QCA First Fund II. QCA has been awarded $1 million in matching funds through the State of Ohio's Third Frontier Action Fund and has formed the $1.5 million QCA First Fund II, a second seed-stage fund. The state's funds are the second $1 million that has been awarded to QCA. As with the initial fund, this award was contingent on raising $500,000 of matching funds from local investors. Tri-State Growth Capital Fund I L.P., QCA's partner in the first QCA First Fund, is also an investor in this new fund.

The QCA First Fund II was established to help small companies reach critical business milestones to prepare them for additional investment from conventional sources, including QCA. The typical investments will be in the $50,000-$100,000 range, and are made at an earlier stage than the Queen City Angels would normally invest outside the First Funds. Queen City Angels group is affiliated with C-CAP, Cincinnati's non-profit angel capital hub.

"Our First Funds fill the gap between the entrepreneur's 'friends and family' resources, and normal angel investments," said Jim Cunningham, Executive Director of C-CAP. "This financing has been the missing link in financing for many entrepreneurial startups. There are a significant number of entrepreneurs who, with some additional capital and mentoring, could quickly move their companies forward. There are over 20 active funds in the state, so the money is available for growing companies. QCA investors are focused on helping businesses in this region be successful, and we have a group of talented investors that are eager to share their knowledge and experience."

The QCA First Fund has already invested in nine area companies, providing mentoring and guidance to the portfolio companies, in addition to investment capital. One of the fund's recipients, Fortis Security Systems, used the investment to start a new company from scratch.

"QCA First Fund led the investment round that allowed us to start our business. They believed in our vision and helped us get the start-up capital we needed," said Kirk Williams, co-founder of Fortis Security Systems. "Members of the Fund have continued to help us as we grow, lending advice and helping us establish important business connections. A resource like this is certainly valuable to the community."

Like the QCA First Fund, the goals of the QCA First Fund II include:

--Create new, desirable jobs in Ohio;

--Attract additional talent to Ohio;

--Impact overall economic viability of the region;

--Commercialize technology that might have been lost otherwise; and

--Provide mentoring opportunities for fund members.

"In addition to looking for opportunities to invest, the QCA is also actively looking for qualified investors to be a part of our Angel organization," added Cunningham. "The state has already committed to match our Angel dollars two-for-one, so investors have a great opportunity to participate with a dedicated group of individuals in the economic development of the region, as well as the opportunity to potentially earn a good return on their investment. We have the firm support of the State of Ohio, and an active group of Angels that is looking to grow. With more Angels and more funds, we can look at more investment opportunities, and actively help create jobs and grow businesses."

About Queen City Angels

The Queen City Angels (QCA) is the first group of experienced, accredited investors committed to accelerating the growth of outstanding early-stage businesses in the Cincinnati area and the surrounding region, via smart investments capable of producing a substantial return. The Angels currently include a substantial number of business leaders form the region, counting many former CEOs and founders of successful companies as investors. QCA operates with administrative assistance from C-Cap, the region's capital resource hub. QCA is interested in funding ventures of promise across a spectrum of industries, building the best new ventures through intelligent investment in the region's future. For more information about QCA, visit www.qca.com.