NOTES TO FINANCIAL STATEMENTS
Dividend Reinvestment Plan
Under the Dividend Reinvestment Plan, net realized capital gains will automatically be paid in additional shares of
the Fund, unless the Plan Agent (State Street Bank and Trust Company) is otherwise instructed by the
shareholder. It is expected that dividends, if any, will be declared after fiscal year-end and will be payable for that
year before the end of January.
A description of the automatic Dividend Reinvestment Plan may be obtained by calling State Street Bank.
Shareholders may request to be paid in cash instead of shares by contacting the bank, brokerage or nominee
who holds the shares if the shares are held in "street name" or by filling out an Authorization Card obtained by
calling State Street Bank if the shares are in registered form.
(2) Purchases and Sales of Investment Securities The aggregate cost of purchases and proceeds from sales of
investment securities (other than temporary cash investments) for the period from October 1, 1996 through
September 30, 1997 totaled $20,678,656 and $22,143,074, respectively.
(3) Tax Basis of Securities At September 30, 1997, the total cost of securities for Federal income tax purposes
was $84,999,540. The aggregate gross unrealized gain on securities in which there was an excess of market
value over cost was $57,695,039. The aggregate gross unrealized loss on securities in which there was an excess
of cost over market value was $13,721,117. The net unrealized gain on securities held by the Fund was
(4) Advisory Agreement The Fund has entered into an Investment Advisory Agreement (the Advisory
Agreement) with Hambrecht & Quist Capital Management Incorporated (the Adviser). Pursuant to the terms of
the Advisory Agreement, the Fund pays the Adviser a monthly fee at the rate when annualized of (i) 2.5% of the
average net assets for the month of its venture capital and other restricted securities up to 25% of net assets and
(ii) 1% of the average net assets