Edgar Filing: MILLENCO LP/NY

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14A-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[x] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

meVC Draper Fisher Jurvetson Fund I, Inc.
(Name of Registrant as Specified In Its Charter)

Millenco, L.P.
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
...................................................................
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
...................................................................
4) Proposed maximum aggregate value of transaction:
...................................................................
5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

1) Amount Previously Paid: ....................................
2) Form, Schedule or Registration Statement No.: ..............
3) Filing Party: ..............................................
4) Date Filed: ................................................

The material in this filing represents the documents that are contained on the
website www.mevcshareholders.com as of February 3, 2003, other than documents
that are otherwise filed with the SEC on EDGAR. All additional material which is
placed on the website subsequent to February 3, 2003, that constitutes proxy
solicitation material will be separately filed with the SEC.

IMPORTANT NOTICE

After reviewing the following notice, click below to close this window

The following disclosures are made pursuant to Rule 14a-12 of the Securities and
Exchange Commission (the "SEC"), promulgated under the Securities Exchange Act
of 1934:

o To the extent the material on this website may be considered a
"solicitation," as defined by SEC regulations, such solicitation is being
made by Millenco, L.P., a Delaware limited partnership, which is a
broker-dealer and member of the American Stock Exchange. The general partner
of Millenco is Millennium Management, LLC, a Delaware limited liability
company. The sole manager of Millennium Management, LLC is Israel A.
Englander. The principal office of Millenco, Millennium and Mr. Englander is
666 Fifth Avenue, New York, New York 10103.

o Millenco is the owner of 1,099,500 shares of common stock of MVC Draper
Fisher Jurvetson I, Inc. (d/b/a MVC Capital) (the "Fund"), representing 6.7%
of the Fund's outstanding common stock. For further information concerning
Millenco's interest in the Fund, we refer you to the Amendment No. 2 to
Schedule 13D, filed by Millenco, L.P., on or about January 16, 2003 with the
Securities and Exchange Commission. That Schedule may be found at:
www.sec.gov/Archives/edgar/data/1132413/000089109203000049/e14150sc13da.txt.

o Millenco has filed its definitive proxy statement with the Securities and
Exchange Commission, and it will file additional solicitation material with
the SEC in the future. SHAREHOLDERS SHOULD READ SUCH PROXY STATEMENT AND
OTHER SOLICITATION MATERIAL CAREFULLY BECAUSE IT CONTAINS AND WILL CONTAIN
IMPORTANT INFORMATION. MILLENNIUM'S DEFINITIVE PROXY STATEMENT IS AVAILABLE
THE AT SEC'S WEBSITE AT www.sec.gov/Archives/edgar/data/1099941/
000095013603000187/0000950136-03-000187.txt AND IS AVAILABLE ON THIS
WEBSITE, WHICH IS WWW.MEVCSHAREHOLDERS.COM. ANY AND ALL PROXY STATEMENTS AND
OTHER MATERIAL FILED IN CONNECTION WITH THE SHAREHOLDERS MEETING WILL BE
AVAILABLE, FOR FREE, AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE
WWW.SEC.GOV AND AT THIS WEBSITE. IN ADDITION, MILLENCO WILL MAKE AVAILABLE
WITHOUT CHARGE, VIA E-MAIL, ANY PROXY STATEMENT OR OTHER SOLICITATION
MATERIAL IT MIGHT ISSUE, TO SHAREHOLDERS WHO REQUEST IT BY CONTACTING US AT:
MEVCSHAREHOLDERS@YAHOO.COM.

o The statements on this website may be "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are subject to risks and uncertainties. In particular, statements
on this website that state the intentions, beliefs, expectations,
strategies, predictions of Millennium or its nominees for directors with
respect to the Fund and its operations, or any other statements relating to
the Fund's future activities or other future events or conditions are
"forward-looking statements." Forward-looking statements are not guarantees
of future performance and involve risks, uncertainties and other factors, as
well as general economic conditions, which are difficult to predict and any
one or more of which could cause actual results to differ materially from
those stated in such statements. Any forward-looking statements speak only
as of the date on which the material is posted to this website, and
Millennium does not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date of such
information is posted on this website. Information on any website other than
this website does not constitute material posted by Millennium on this
website. Articles on this website that appear in newspapers and other
printed or on-line publications represent the views of the authors of the
articles, and Millennium does not take any responsibility for any statements
contained in those articles.

After reviewing the above information, click here to view information on
this website.

MEVCSHAREHOLDERS.COM
A WEBSITE FOR SHAREHOLDERS OF MVC CAPITAL (NYSE:MVC)
SPONSORED BY MILLENNIUM PARTNERS

ABOUT THIS SITE

Since MVC Capital's inception in early 2000, the Fund's Board has delivered
sub-par performance and continuously demonstrated contempt for shareholders.
Millennium Partners, the largest stockholder of MVC, has been fighting to help
shareholders take back control -- and maximize the value -- of the long
mismanaged and under-performing Fund. Please visit these pages often to learn
more about the latest news and what you can do as a shareholder to protect your
investment and enact change at MVC.

LATEST NEWS

On January 15th, Millennium Partners issued a letter to shareholders praising
the Delaware Chancery Court's decision to overturn MVC's 2001 and 2002 Director
elections and highlighting the numerous ways in which MVC's board and management
have run roughshod over the interests of shareholders.

ABOUT MILLENNIUM PARTNERS

Millennium Partners, L.P. is a $3 billion multi-strategy private investment fund
managed out of New York City. Millennium has been a significant owner in MVC
Capital since 2000, with over one million shares, and has spent the past two
years committed to effecting change at MVC and returning value to the Fund's
shareholders.

This site is managed and maintained by Citigate Sard Verbinnen
on behalf of Millennium Partners, L.P.

MEVCSHAREHOLDERS.COM
A WEBSITE FOR SHAREHOLDERS OF MVC CAPITAL (NYSE:MVC)
SPONSORED BY MILLENNIUM PARTNERS

Press Releases

Millennium Partners Proposes New Board of Directors for MVC Shareholder Meeting
on February 28
January 31, 2003

Millennium Comments of Court Order for MVC to Hold New Director Elections
December 20, 2002

Millennium Comments on MVC Plans for Fund
October 1, 2002

Millennium Comments on Status of MEVC Litigation
August 22, 2002

Millennium Files Lawsuit Against MEVC and its Board Contesting Validity of
Director Elections
August 1, 2002

Millennium Comments of meVC Decision to Internalize Management and
Administrative Funtions
June 21, 2002

Millennium Comments of Resignation of meVC Advisers
June 18, 2002

Millennium Comments on MVC Shareholder Vote Against Advisor Agreements
April 8, 2002

Millennium Comments on Adjournment of MVC Shareholder Meeting
March 27, 2002

Millennium Applauds new ISS Recommendation on MVC Proxy
March 22, 2002

Millennium Will Vote Against MVC's Recommendation
March 18, 2002

This site is managed and maintained by Citigate Sard Verbinnen
on behalf of Millennium Partners, L.P.

MILLENNIUM PARTNERS, L.P.

666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141

CONTACT
Media Investors
----- ---------
Paul Caminiti/Kim Levy/Keil Decker Robert Knapp
Citigate Sard Verbinnen Millennium Partners
(212) 687-8080 (212) 841-4100

MILLENNIUM COMMENTS ON COURT ORDER
FOR MVC TO HOLD NEW DIRECTOR ELECTIONS

COURT DECISION REPRESENTS TREMENDOUS VICTORY FOR MVC SHAREHOLDERS;
ELECTIONS PROVIDE REFERENDUM FOR SHAREHOLDERS TO DETERMINE
FUTURE DIRECTION OF FUND

---------------------------------------------------------

NEW YORK, NY - DECEMBER 20, 2002 - Millennium Partners, LP today issued
the following statement from Managing Director Robert Knapp regarding the Court
of Chancery of the State of Delaware's recent decision ordering MVC Capital
(NYSE: MVC, "the Fund") to hold new elections for three director seats based on
inadequate past disclosure. The three director seats up for new election on
February 15th are presently held by MVC's Chairman and Chief Executive Officer
John Grillos, Larry Gerhard, and a vacant seat previously held by an employee of
the Fund's former advisor.

Mr. Knapp said, "The Court's decision to order MVC to hold new
shareholder elections for three of the Fund's directors is extremely
significant, and represents a tremendous victory for all MVC shareholders. The
upcoming director elections, to be held by February 15th, finally provide a
referendum for MVC shareholders to determine the future direction of the Fund,
which continues to trade at a discount to cash. We look forward to proposing
three new Board candidates and further outlining our program for maximizing the
Fund's returns to shareholders, and will be filing preliminary proxy materials
shortly. Given the Court's ruling, we would seriously question the
appropriateness of either John Grillos or Larry Gerhard running again for their
vacated seats on the MVC Board."

Millennium welcomes comments and suggestions from meVC shareholders at
mevcshareholders@yahoo.com.

Millennium Partners, LP is a $3 billion multi-strategy private investment
fund managed out of New York City.

MILLENNIUM PARTNERS, L.P.

666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141

CONTACT
Media Investors
----- ---------
Paul Caminiti/Kim Levy Robert Knapp
Citigate Sard Verbinnen Millennium Partners
(212) 687-8080 (212) 841-4100

MILLENNIUM COMMENTS ON MVC PLANS FOR FUND

DISAPPOINTED BY BOARD'S CONTINUED EFFORTS TO CIRCUMVENT SHAREHOLDER
APPROVAL PROCESS

---------------------------------------------------------

NEW YORK, NY - OCTOBER 1, 2002 - Millennium Partners, LP today issued the
following statement from Managing Director Robert Knapp regarding the meVC
Draper Fisher Jurvetson Fund I (NYSE: MVC, "the Fund") announcement of its
Board's plans to appoint John Grillos as internal adviser and undertake various
other initiatives to restructure the Fund:

"We are disappointed, but not surprised, by MVC's continued efforts to
circumvent shareholder approval by appointing key members of Draper Advisers --
whom investors already overwhelmingly voted to terminate as investment adviser
-- as internal manager of the Fund. We are skeptical of the Board's plan to
invest in venture capital debt financing, an asset class with all of the
downside of equity venture capital investments, but only a fraction of the
upside. Moreover, we have reservations about their choice to partner with a team
whose performance track record is mediocre at best. The Board's announcement of
a $20 million share buyback, assuming it is actually implemented, is both
inadequate and far more problematic than simply returning a portion of the
nearly $150 million in cash held by the Fund via a significant dividend."

"We presented a more practical approach to enhancing shareholder value to
the Board in June 2002 and plan to pursue this proposal at the next annual
meeting. We will continue our current litigation, challenging the elections of
John Grillos, Larry Gerhard, and one former member of the Board. The Delaware
Chancery court has set a December 12, 2002, trial date."

Millennium welcomes comments and suggestions from meVC shareholders at
mevcshareholders@yahoo.com.

Millennium Partners, LP is a $3 billion multi-strategy private investment
fund managed out of New York City.

MILLENNIUM PARTNERS, L.P.

666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141

CONTACT
Media Investors
----- ---------
Paul Caminiti/Kim Levy Robert Knapp
Citigate Sard Verbinnen Millennium Partners
(212) 687-8080 (212) 841-4100

MILLENNIUM COMMENTS ON STATUS OF
MEVC LITIGATION

---------------------------------------------------------

NEW YORK, NY - AUGUST 22, 2002 - Millennium Partners, LP today issued the
following statement regarding the status of its pending litigation against MeVC
Advisors and the Board of Directors of the meVC Draper Fisher Jurvetson Fund I
(NYSE: MVC, "the Fund") from Millennium Partners Managing Director Robert Knapp:

"In order to clarify a number of misleading statements made by the Fund,
Millennium confirms that it has not `abandoned' either of its two ongoing legal
actions regarding the Fund's stewardship. In one action, pending before the U.S.
District Court for the District of Delaware, Millennium has sued on behalf of
the Fund to recover excessive fees paid to meVC Advisors. Millennium never made
any claim against the Fund in this case, and the Fund's claim that Millennium
abandoned the suit misconstrues a minor technicality. Yesterday, the Court
sustained all of Millennium's claims in the case, and Millennium will proceed to
prosecute the case on behalf of the Fund. In the second action, pending before
Delaware Chancery Court, Millennium has sued the Fund and the Fund's board to
overturn the Fund's two most recent Director elections on the grounds of proxy
deception. Despite the Fund's misleading rhetoric, Millennium will continue to
prosecute both legal cases in the interest of the Fund's shareholders."

Millennium welcomes comments and suggestions from meVC shareholders at
mevcshareholders@yahoo.com.

Millennium Partners, LP is a $3 billion multi-strategy private investment
fund managed out of New York City.

MILLENNIUM PARTNERS, L.P.

666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141

CONTACT
Media Investors
----- ---------
Paul Caminiti/Kim Levy/Keil Decker Robert Knapp
Citigate Sard Verbinnen Millennium Partners
(212) 687-8080 (212) 841-4100

MILLENNIUM FILES LAWSUIT AGAINST MEVC AND ITS BOARD
CONTESTING VALIDITY OF DIRECTOR ELECTIONS

ALLEGES PROXY DECEPTION;
SEEKS NEW ELECTION FOR 3 OF 5 BOARD SEATS

---------------------------------------

NEW YORK, NY - AUGUST 1, 2002 - Millennium Partners, LP announced that it
has filed a lawsuit in Delaware Chancery Court against the meVC Draper Fisher
Jurvetson Fund I

(NYSE: MVC, "the Fund") and the Fund's board, including directors Larry Gerhard,
Harold Hughes, Jr., Chauncey Lufkin and John Grillos, alleging proxy deception
and contesting the validity of the Fund's director elections.

The suit seeks to invalidate the election of directors John Grillos and
Larry Gerhard at the 2001 and 2002 Annual Meetings, respectively, because the
elections were procured by proxy statements that were materially false and
misleading. The complaint alleges that: (1) Larry Gerhard was not an
"independent" director, as identified in the proxy materials; and, (2) the
Company did not disclose that John Grillos was affiliated with a venture capital
fund that co-invested with MVC. The complaint specifically alleges that:

o The proxy statements distributed in conjunction with these meetings
failed to disclose material information that compromised the
independence of two of the Fund's three supposedly "independent"
directors. Specifically, the proxies did not disclose that John Grillos
was Chairman of the Board of eVineyard, a company where meVC director
Larry Gerhard served as President and Chief Executive Officer and
Harold Hughes served as a Chief Operating Officer and a director.
Therefore, Gerhard's and Hughes' status as independent directors was
compromised.

o The 2001 and 2002 proxy statements also failed to disclose that,
through his affiliation with venture capital fund Osprey Ventures LP,
John Grillos made outside co-investments in at least two of meVC's
portfolio companies, ShopEaze Systems and BlueStar Solutions.

The suit seeks equitable relief in the form of a Special Meeting of
Stockholders at which new elections would be held for the two board seats
currently held by Mr. Grillos and Mr. Gerhard, as well as for a fifth board
seat, which is vacant due to the resignation of Peter Freudenthal in June 2002.

"The conduct of the meVC board displays an irresponsible disregard for
the rules of disclosure for a public company and the rights of shareholders,"
said Millennium Partners Managing Director Robert Knapp. "We are particularly
disturbed by the board's decision to selectively disclose Mr. Gerhard's and Mr.
Hughes' relationships to eVineyard while omitting that they answered to Mr.
Grillos, who served as Chairman of eVineyard's board. The non-disclosure of Mr.
Grillos' investments in meVC portfolio companies through his affiliation with
Osprey Ventures raises additional cause for concern about self-dealing and
conflicts of interest. Given these facts, we felt compelled to take legal action
to call for new director elections for the benefit of all Fund shareholders."

Millennium welcomes comments and suggestions from meVC shareholders at
mevcshareholders@yahoo.com.

Millennium Partners, LP is a $3 billion multi-strategy private investment
fund managed out of New York City.

# # #

MILLENNIUM PARTNERS, L.P.

666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141

CONTACT

Media Investors
----- ---------
Paul Caminiti/Kim Levy Robert Knapp
Citigate Sard Verbinnen Millennium Partners
(212) 687-8080 (212) 841-4100
Klevy@sardverb.com Rknapp@mlp.com
------------------ --------------

MILLENNIUM COMMENTS ON MEVC DECISION TO INTERNALIZE

MANAGEMENT AND ADMINISTRATIVE FUNCTIONS

CONDEMNS BOARD'S ATTEMPT TO FURTHER DISENFRANCHISE SHAREHOLDERS

AND INSUFFICIENT COMMUNICATIONS TO INVESTORS

----------------------------------------------------

NEW YORK, NY - JUNE 21, 2002 - Millennium Partners issued the following
statement from Managing Director Robert Knapp regarding yesterday's
announcement that meVC Draper Fisher Jurvetson Fund I (NYSE: MVC, "the Fund")
has decided to internalize all management and administrative functions of the
Fund, following the resignation of meVC Advisers:

"We are concerned that the Board's announcements fail to represent
material progress in remedying the Fund's ills and create an entirely new set
of unanswered questions. It appears the Fund has hired key individuals from
Draper Advisers, the firm that shareholders resoundingly rejected by a vote
of 5,026,165 to 2,634,963 at the Annual Meeting. It also appears that the
Board has no plans to seek shareholder approval for this significant change,
which would represent a blatant attempt to circumvent the results of the
vote.

"We are also astounded that, as a publicly traded company under
significant criticism from investors, the Fund has not contacted Millennium
to discuss these recent events and continues to trickle out its strategy - or
lack thereof - in a series of one- and two-line press releases."

Millennium Partners, LP is a $3 billion multi-strategy private investment fund
managed out of New York City.

MILLENNIUM PARTNERS, L.P.

666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141

CONTACT
Media Investors
----- ---------
Paul Caminiti/Kim Levy Robert Knapp
Citigate Sard Verbinnen Millennium Partners
(212) 687-8080 (212) 841-4100
Klevy@sardverb.com Rknapp@mlp.com
------------------ --------------

MILLENNIUM COMMENTS ON RESIGNATION OF MEVC ADVISERS

APPLAUDS FIRST STEP TO REMEDY FUND'S ILLS,

BUT CAUTIONS THAT ADDITIONAL CHANGES ARE NECESSARY

-----------------------------------------------------

NEW YORK, NY - JUNE 18, 2002 - Millennium Partners issued the following
statement from Managing Director Robert Knapp regarding the resignation of Peter
S. Freudenthal and Paul D. Wozniak from the meVC Draper Fisher Jurvetson Fund I
(NYSE: MVC, "the Fund") and from meVC Advisers, Inc.

"We are pleased to see the meVC Draper Fisher Jurvetson Fund I is taking
steps to restructure this under performing asset. However, this should be just
the first of many actions to remedy the Fund's ills. When we first began our
campaign in March, our goal was to replace both meVC Advisers and Draper
Advisers -- each of which have been responsible for taking excessive investment
advisory fees, the Fund's abysmal performance and failing to achieve the Fund's
stated investment objective. And the shareholder vote on April 7 clearly and
resoundingly defeated the investment agreements proposing a continuing role by
either meVC Advisers or Draper Advisers. Given shareholder sentiment, we will
continue to campaign for a comprehensive restructuring of the Fund in order to
deliver real value to shareholders - and none of the options should provide for
an ongoing role for John Grillos or Draper Advisers. We strongly urge John
Grillos to take the lead from Freudenthal and Wozniak and tender his
resignation."

Millennium Partners, LP is a $3 billion multi-strategy private investment
fund managed out of New York City.

MILLENNIUM PARTNERS, L.P.

666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141

CONTACT
Media Investors
----- ---------
Paul Caminiti/Kim Levy Robert Knapp
Citigate Sard Verbinnen Millennium Partners
(212) 687-8080 (212) 841-4100

MILLENNIUM COMMENTS ON MVC SHAREHOLDER VOTE

AGAINST ADVISOR AGREEMENTS

LOOKS FORWARD TO BEGINNING A MEANINGFUL DIALOGUE WITH MANAGEMENT

-----------------------------------------------------

NEW YORK, NY - APRIL 8, 2002 -- Millennium Partners issued the following
statement from Managing Director Robert Knapp regarding the announcement from
the meVC Draper Fisher Jurvetson Fund I (NYSE: MVC, "the Fund") that the
proposed new investment advisory agreements failed to receive the necessary
votes for approval and the Board decided against reconvening the shareholder
meeting at a later date.

"We are pleased with meVC's decision not to reschedule the shareholder
meeting and, as the Fund's largest shareholder, look forward to sitting down
with the Board in a timely manner to begin a meaningful dialogue. We intend to
propose a variety of potential remedies for the Fund's current ills, including a
return of the Fund's uninvested cash to shareholders, at least in part; having
meVC Advisers and Draper Advisers step down and be replaced by a new advisor;
and a restructuring of the advisor fees."

Millennium welcomes comments and suggestions from meVC shareholders at
mevcshareholders@yahoo.

Millennium Partners, LP is a $3 billion multi-strategy private investment
fund managed out of New York City.

# # #

MILLENNIUM PARTNERS, L.P.

666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141

CONTACT
Media Investors
----- ---------
Paul Caminiti/Kim Levy Robert Knapp
Citigate Sard Verbinnen Millennium Partners
(212) 687-8080 (212) 841-4100

MILLENNIUM COMMENTS ON ADJOURNMENT OF MVC SHAREHOLDER MEETING

GRATIFIED BY OVERWHELMING INVESTOR SUPPORT AND

SUCCESS IN FORCING MEVC TO POSTPONE SHAREHOLDER VOTE

-----------------------------------------------------

NEW YORK, NY -- MARCH 27, 2002 -- Millennium Partners issued the
following statement from Managing Director Robert Knapp regarding the
adjournment of the meVC Draper Fisher Jurvetson Fund I (NYSE: MVC, "the
Fund") annual meeting.

"Today is a great success for us, as we succeeded in forcing meVC to
adjourn the shareholder meeting because they did not have adequate votes to
ratify their self-serving investment advisor agreement. We are extremely
gratified by the overwhelming investor support we have received in our
efforts to prevent the board from disenfranchising meVC shareholders."

"We now hope that the board will be willing to sit down with
shareholders to determine a reasonable solution that refocuses their efforts
on delivering real value to shareholders, both in the form of absolute
returns and reasonable fees and expenses. We intend to propose a variety of
potential remedies for the Fund's current ills, including a restructuring of
the advisor fees, replacement of the advisor, and return of the Fund's
uninvested cash to shareholders."

Millennium welcomes comments and suggestions from meVC shareholders at
mevcshareholders@yahoo.com.

Millennium Partners, L.P. is a $3 billion multi-strategy private investment fund
managed out of New York City.

MILLENNIUM PARTNERS, L.P.

666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141

MILLENNIUM APPLAUDS NEW ISS RECOMMENDATION ON MVC PROXY

ISS ADVISES SHAREHOLDERS TO VOTE AGAINST PROPOSED INVESTMENT ADVISORY AGREEMENTS

REPORT CITES EXCESSIVE INVESTMENT ADVISORY FEES, POOR DISCLOSURE OF FUND ASSETS,

AND FAILURE OF FUND TO ACHIEVE STATED INVESTMENT OBJECTIVE

-----------------------------------------------------

NEW YORK, NY -- MARCH 22, 2002 -- Millennium Partners announced today
that Institutional Shareholder Services ("ISS"), the nation's leading proxy
voting advisory firm and provider of corporate governance services, has issued a
new report recommending that shareholders of meVC Draper Fisher Jurvetson Fund I
(NYSE: MVC, "the Fund") vote against the two new proposed investment advisory
agreements at the Fund's annual meeting on March 27, 2002.

In its report, issued March 21, 2002, ISS wrote, "...ISS recommends
shareholders vote against both proposed advisory agreements with meVC Advisers
and Draper Advisers for excessive investment advisory fees, poor disclosure of
fund assets, and failure to achieve its stated investment objective. A vote
against will require the board to consider shareholder concerns and the future
direction of the fund."

Robert Knapp, Managing Director of Millennium Partners said, "We are very
pleased that ISS, a highly respected independent advisor, supports our
recommendation that meVC shareholders vote against the two new proposed
investment advisory agreements. ISS has confirmed all of the concerns Millennium
has raised with regard to both the agreements and the ongoing mismanagement of
the Fund."

Knapp continued, "If shareholders do not approve the proposed investment
advisory agreements, the existing agreement will automatically extend for up to
150 days and we as shareholders will be able to negotiate on a level playing
field with the board of directors in order to determine the Fund's future
course. At that point, we can seek a restructuring of the advisory fees;
replacement of the advisor; and/or the return of the Fund's uninvested cash to
shareholders."

Although Millennium is urging all meVC shareholders to vote against the
proposed advisory agreements, Millennium will not seek, directly or indirectly,
to act as proxy for any meVC shareholder, nor will they furnish forms to other
shareholders or request forms from shareholders in connection with exercise of
their voting rights.

Millennium Partners, LP is a $3 billion multi-strategy private investment
fund managed out of New York City.

MILLENNIUM PARTNERS, L.P.

666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141

MILLENNIUM WILL VOTE AGAINST MVC'S BOARD RECOMMENDATION

SAYS PROPOSED INVESTMENT ADVISOR AGREEMENTS WOULD DISENFRANCHISE SHAREHOLDERS

HAS FILED FEDERAL LAWSUIT AGAINST MEVC ADVISERS
CHARGING BREACH OF FIDUCIARY DUTY FOR RECEIPT OF EXCESSIVE FEES

-----------------------------------------------------

NEW YORK, NY -- MARCH 18, 2002 -- Millennium Partners, LP, an investment
company with over $3 billion in capital and one of the largest shareholders of
meVC Draper Fisher Jurvetson Fund I (NYSE: MVC, "the Fund"), today announced it
intends to vote against the two new proposed investment advisory agreements at
the Fund's annual meeting on March 27, 2002. Millennium asserts that, if
approved, the proposed agreements would disenfranchise the Fund's shareholders.

Currently, the Fund is required to obtain a majority shareholder vote to
renew or extend its investment advisor agreements. Under the proposed new
agreements with the Fund's current advisors, only a vote from the Fund's board
of directors -- which is composed entirely of principals of the advisors and
three "outside" directors selected and compensated by meVC Advisers -- would be
needed to renew the term of an existing advisor.

On February 20, 2002, Millenco L.P., a subsidiary of Millennium Partners,
filed a lawsuit on behalf of the Fund against one of the Fund's advisors, meVC
Advisers, alleging breach of fiduciary duty under the Investment Company Act of
1940. The suit, which was filed in the U.S. District Court for the District of
Delaware, Index no. 02-142, alleges that excessive, unreasonable and unearned
fees have been received by meVC Advisers, including the following:

o Despite the fact that meVC Advisers failed to receive SEC approval to
allow the Fund to make follow-on investments with Draper Fisher
Jurvetson's other private venture capital funds, one of the Fund's key
distinguishing features, no downward adjustment has been made to meVC
Advisers' management fees -- a 2.5% advisory fee and 20% incentive fee
without a "high water mark."

o While the stated investment objective of the Fund is long-term capital
appreciation from venture capital investments in information technology
companies, over 60% of the Fund's assets remained in cash through
fiscal 2001. During that time, meVC Advisers, along with sub-advisor
Draper Advisors, collected management fees in excess of $7.38 million.

o meVC Advisers was delinquent in making significant markdowns to the
fund's NAV, resulting in inflated advisory fees.

The suit seeks repayment of excessive advisory fees to the Fund.

"Touted as the retail investor's ticket into the world of venture capital
investing, meVC Draper Fisher Jurvetson Fund I has been plagued by missteps
since its inception," said Robert Knapp, Managing Director of Millennium
Partners. "After aggressively marketing its access to Draper Fisher Jurvetson's
expertise and contacts, the Fund was not permitted by the SEC to make follow-on
investments with Draper Fisher Jurvetson's other VC funds, and over 60% of the
Fund's assets have been sitting in cash since inception. During that period, the
advisors took in excess of $12 million in fees, essentially making shareholders
pay them to 'manage' money sitting in money-market assets."

Knapp continued, "The limited investments the Fund's advisors did make
lost 39% of their value as of fiscal 2001 and have lost approximately 54%
cumulatively through January 2002. When the value of the Fund's investments
plummeted, we allege in our lawsuit that the Fund's advisors were delinquent in
recording these severe markdowns to the fund's NAV, resulting in further
inflated advisory fees. Despite this woeful record, no downward adjustment to
advisory fees has been proposed. It adds insult to injury that meVC Advisers and
Draper Advisors are now trying to disenfranchise shareholders so that they can
receive their excessive compensation in perpetuity."

Although Millennium is urging all meVC shareholders to vote against the
proposed advisory agreements, Millennium and Millenco will not seek, directly or
indirectly, to act as proxy for any meVC shareholder, nor will they furnish
forms to other shareholders or request forms from shareholders in connection
with exercise of their voting rights.

Millennium Partners, LP is a $3 billion multi-strategy private investment
fund managed out of New York City.

MEVCSHAREHOLDERS.COM
A WEBSITE FOR SHAREHOLDERS OF MVC CAPITAL (NYSE:MVC)
SPONSORED BY MILLENNIUM PARTNERS

SHAREHOLDER LETTERS

Court Overturns Election of CEO John Grillos and Other Directors Citing Breach
of Fiduciary Duty (PDF)
January 15, 2003

Continued Contempt for Shareholders (PDF)
August 28, 2002

An Urgent Message to meVC Fund Shareholders
March 18, 2002

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The documents listed above must be viewed with Adobe Acrobat Reader - please
clic here if you with to install the program.

This site is managed and maintained by Citigate Sard Verbinnen on behalf of
Millennium Partners, L.P.

MILLENNIUM PARTNERS, L.P.

c/o Millennium Management, LLC
666 FIFTH AVENUE TELEPHONE 212.841.4100
NEW YORK, NY 10103-0899 TELEFAX 212.841.4141

AN URGENT MESSAGE TO MEVC FUND SHAREHOLDERS:

MILLENNIUM URGES SHAREHOLDERS TO VOTE
AGAINST
-------
NEW MEVC ADVISER AGREEMENTS AT MARCH 27,2002, ANNUAL MEETING

March 18 ,2002

Dear Fellow Shareholders:

o Have you read your proxy from the meVC Draper Fisher Jurvestson Fund
I (NYSE: MVC, "meVC" or "the Fund")?

o Are you aware that meVC has been paying the Fund's adviser, meVC
Advisers, millions of dollars to hold money market assets?

o Are you aware that if the new meVC Adviser agreements are approved at
the annual meeting on March 27, 2002 that you lose your right to
approve the renewal of those agreements in the future?

o Are you aware that meVC has been prohibited by the SEC from
coinvesting with Draper Fisher Jurveston funds ("Draper Funds") in
portfolio companies in which Draper Funds are already investors?

o Are you aware that Millennium has filed a federal lawsuit against
meVC Advisers on behalf of all Shareholders charging breach of
fiduciary duty for receipt of excessive fees?

Millennium Partners, LP, an investment company with over $3 billion in assets
and the beneficial owner of over 700,000 shares in meVC, wants you to know that
time is running out, but you can still vote your proxy against the meVC advisory
agreements, proposals (2a) and (2b), for the upcoming shareholder meeting on
March 27, 2002, In this letter we explain why this urgent matter needs your
attention.

Currently, meVC is required to obtain a majority shareholder vote to renew or
extend its investment adviser agreements. Under the proposed new agreements with
the Fund's current advisers, only a vote from the Fund's board of directors --
which is composed entirely of principals of the advisers and three "outside"
directors selected and compensated by meVC Advisers -- would be needed to renew
the term of an existing adviser.

WHY DOES THIS MATTER? BECAUSE THE ADVISERS HAVE BEEN TAKING EXCESSIVE FEES
AND DO NOT DESERVE TO HAVE THE AGREEMENTS APPROVED

meVC was launched in March of 2000 with net proceeds of $311,645,000. As of
October 3 1, 2001, the Fund's fiscal year end, meVC held cash and money market
instruments worth $164,123,455. In other words, over 60% of the Fund's assets
remained uninvested. Since launch, meVC Advisers has been paid in excess of
$7,000,000 in fees on the cash balances alone. If the proposed Advisory
agreements are approved, the Advisors can continue to take these excessive fees
virtually in perpetuity.

At the Annual Meeting in 2001, Millennium attended and argued that management
fees were too high given the significant cash balances held by meVC.
Representatives of meVC responded that Millennium "did not understand venture
capital investing". We contend that the question at hand was that of money
market investing. While most money market funds currently pay less than 1.75%
interest, meVC has paid itself 2.5% for the privilege of holding money market
assets.

The few investments that meVC has made have performed dreadfully. As of October
31, 2001, the portfilio of investments that had been made at a cost of
approximately $150 million were valued at $90.9 million, a return of-39%. As
ofJanuary 31, 2002, based on data provided by the Fund, we estimate the
portfolio of investments had declined to a value of $68. 1 million, a return of
approximately -54%.

Indeed, the value of the portfolio may be even lower. One of the investments,
Mediaprise Inc, was made at a cost of $2,000,000 in October 2000 and one year
later was carried at a full value in the October 31, 2001 in the Annual Report.
In January 2001 the value of the Mediaprise investment was written from
$2,000,000 to $0. Of meVC's roughly two dozen investments, three were written to
zero by meVC on a single day in January. How many other portfolio companies are
really worth nothing?

TOUTED AS THE RETAIL INVESTOR'S TICKET INTO THE WORLD OF
VENTURE CAPITAL INVESTING,

MEVC HAS BEEN PLAGUED BY MISSTEPS SINCE ITS INCEPTION

The offering documents of meVC state:

We intend to utilize the investment expertise, contacts, networks,
access to deal flow and company monitoring and managerial assistance
capabilities of Draper Fisher Jurvetson and its venture capital
affiliates. We expect a significant number of our mezzanine, expansion
and seed round investments to be referred by Draper Fisher Jurveston
and its venture capital affiliates ... OUR ABILITY TO ACHIEVE OUR
INVESTMENT OBJECTIVE DEPENDS UPON OUR ABILITY TO UTILIZE THE NATIONAL
VENTURE CAPITALPRESENCE OF THE DRAPER FISHER JURVETSON AFFILIATE
NETWORK.

However, your meVC proxy notes the SEC has issued an order requiring that meVC
"may not co-invest with Draper Funds in portfolio companies in which Draper
Funds are already investors." In other words, the keyfeature of meVC as stated
in the offering documents -- its ability to source expansion and mezzanine
investments from the Draper Fisher Jurvelson network -- has been prohibited by
the SEC. The offering documents explain clearly that meVC would emphasize
investments in "companies in their second or third round of financing, called an
expansion round, and companies in their final round of financing prior to an
anticipated merger or public offering, called a mezzanine round." Because Draper
Fisher Jurvetson specializes almost exclusively in early stage investing, the
inability of meVC to make followon investments with companies in which Draper
Fisher Jurvetson has already invested essentially forbids meVC from utilizing
the national venture capital presence of the Draper Fisher Jurvetson network. IN
SHORT, MEVC HAS FAILED TO ACHIEVE ITS STATED INVESTMENT OBJECTIVES.

MEVC IS TAKING ADVANTAGE OF SHAREHOLDERS

On February 20, 2002, Millenco L.P., a subsidiary of Millennium Partners, filed
a lawsuit on behalf of the Fund against meVC Advisers, alleging breach of
fiduciary duty under the Investment Company Act of 1940. Millennium notes that
this lawsuit is targeted against meVC Advisers, not the Fund itself, meaning
that meVC Advisers cannot waste shareholder funds in defending themselves. The
suit, which wasfiled in the U.S. District Court for the District of Delaware,
Index no. 02-142, alleges that excessive, unreasonable and unearned fees have
been received by meVC Advisers and seeks repayment of excessive advisory fees to
the Fund for the benefit of all Shareholders.

WE URGE YOU TO VOTE AGAINST
THE NEW MEVC ADVISORY AGREEMENTS

The verdict of the market is clear. meVC shares are currently trading in the
range of $9.00. Yet there is $ 10.00 per share in cash and the published NAV is
$14.02 per share. The discount between share price and NAV is an astonishing
35.5%. The market assigns no value to the portfolio, and a negative value to the
cash holdings. Many shareholders have voted against management by selling. But
if shareholders vote with their proxies, shareholders can control meVCs fate.

If the new agreements are not approved, an interim advisory agreement will take
effect for up to 150 days. During this interim period, shareholders will have
the opportunity to participate on a level playing field in a negotiation over
the Fund's Future. Options available would include a liquidation of the Fund, or
at least a return to shareholders of its uninvested cash. Alternatively, we can
seek a restructuring of the advisory fees and/or replacement of the Advisers.

meVC has taken advantage of shareholders for too long, and it is time to hold
the Board and Advisers accountable. We urge you to vote against the new meVC
advisory agreements and prevent meVC from disenfranchising shareholders. Do not
let the Fund's Advisers continue to reap excessive fees while half the funds
assets sit in cash and its investments plummet in value.

On Behalf of Millennium Partners, LP

Robert Knapp
Managing Director

ANY SHAREHOLDER MAY REVOKE A PREVIOUSLY DELIVERED PROXY BY

VOTING AGAIN, USING EITHER THE ORIGINAL PROXY CARD, OR BY TELEPHONE

OR THROUGH THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE

ORIGINAL PROXY CARD.

MEVCSHAREHOLDERS.COM
A WEBSITE FOR SHAREHOLDERS OF MVC CAPITAL (NYSE:MVC)
SPONSORED BY MILLENNIUM PARTNERS

MEDIA COVERAGE

The battle for control of the only closed-end venture-capital fund heats up
Barron's Online
February 3, 2003

MVC Capital Faces Wrath of Little Guys, Who Fund Courted
The Wall Street Journal
January 31, 2003

Stakes Rise in meVC Battle
The Daily Deal
September 12, 2002

MVC Fund Offers Rare Glimpse at Venture Capital Dirty Laundry
The San Francisco Chronicle
August 2, 2002

Millennium blasts meVC Battle
The Daily Deal
August 1, 2002

Shareholders Defeat meVC's Bid to Alter Management of Fund
The Wall Street Journal
April 9, 2002

Round I: Millennium Lands a Jab on MeVC
Private Equity Week
April 1, 2002

This Fund's Troubles May Only Grow
Business Week
March 24 2002

MeVC is Sued by Largest Shareholder Over Collection of Management Fees
The Wall Street Journal
March 18, 2002

This site is managed and maintained by Citigate Sard Verbinnen on behalf of
Millennium Partners, L.P.

Barron's On-Line

Monday, February 3, 2003

FUND OF INFORMATION

Little Ventured
The battle for control of the only closed-end venture-capital fund heats up

BY ERIC J. SAVITZ

JOHN GRILLOS MIGHT WANT to spruce up his resume. Grillos is the CEO at MVC
CAPITAL, a struggling closed-end fund better known by its original name, meVC
Draper Fisher Jurvetson Fund I, or simply meVC.

As we noted several months ago in this space ("A Venture Adventure,(4)" Nov. 18,
2002), MVC was created at the height of the Internet boom as a way for small
investors to play the scorching hot venture-capital sector. The fund came public
in March 2000 at $20, raising $330 million. The plan: invest in young, private
tech companies alongside venture fund Draper Fisher Jurvetson.

That happened less than three years ago. Since then, everything's changed.
Grillos is gearing up to fight a dissident group that wants to boot him out and
bring in new management -- or perhaps liquidate the fund.

The battle will peak at MVC's Feb. 28 annual meeting in Menlo Park, Calif., at
which holders will choose an entirely new seven-member board. There are two
slates: one proposed by Grillos, the other by the dissidents. And there is
reason to think the Grillos slate is in trouble.

For Grillos, the problem is that institutional investors have snared a big stake
in MVC's shares, happy to take them from the individuals the fund was created to
serve. The headline in a Friday story in the Wall Street Journal characterized
this fight as the "Wrath of the Little Guys(5)" disappointed with the fund's
performance.

But that's not the story. According to Bloomberg data, institutions now hold
close to one-quarter of the funds' shares, and that number seems destined to
rise as the vote gets closer. This isn't about the little guy anymore.

Clearly, institutions don't lack for access to the venture market, and they're
hardly enamored with Grillos' investment acumen. Rather, they're attracted by
the fact that MVC trades at a fat 26% discount to its stated net asset value.
(The discount has been as wide as 40%.)

There are additional forces working against Grillos. The fund has been
star-crossed from the start, beginning with an SEC ruling which nixed the fund's
original plan to co-invest in deals with Draper Fisher. It also had terrible
timing. MVC came public in the same month the Nasdaq Composite topped the 5,000
level. We all know what happened then: The IPO market, tech stocks and the
venture capital business hit the skids. MVC has made more than two dozen
investments since it went public, and has used up nearly two-thirds of its
original cash in investments and fees.

So far, none of the companies in which it invested have come public, while at
least half a dozen are kaput.

And other than a few recent investments, most have been the subject of sharp
write-downs: at its Oct. 31 fiscal year end, MVC put the fair value of its
current holdings at just 38% of original cost.

As you'd imagine, all that has been trouble for MVC shares. Now trading at about
$8.50, the stock has lost well over half its value since the IPO. As of last
week, the fund had $118.1 million in cash and an estimated $70 million worth of
venture investments; total assets stand at $188.1 million, which is 43% less
than what the fund originally raised.

When we wrote about MVC in November, the fund's market value had sunk below the
value of its remaining cash, implying that MVC's investment portfolio was worth
less than zero. The stock no longer trades below cash, reflecting the fact that
MVC invested another $20 million in December; it's also bought back 203,200
shares, or about $1.6 million. Cash, at $7.25 a share, is about 86% of the share
price.

Grillos' chief tormentors have been New York-based Millennium Partners, the
largest investor in the fund, a $3 billion hedge fund with a 6.7% stake, and
Pittsford, New York-based Karpus Investment Management, with a 3.8% stake.
Karpus is the sponsor of a non-binding initiative on the annual meeting ballot
that calls for the fund to tender for a quarter of its shares at 95% of net
asset value in any year in which the fund trades at an average discount of more
than 10%.

Millenium, however, has been the fund's most aggressive, and vocal foe. Its
managing director, Robert Knapp, is leading the drive to oust management. In a
Jan. 15 letter to shareholders, he alleged that Grillos and the MVC board
members "have run our company like their personal candy store." In another
letter, dated Jan. 31, Knapp marvels that management has taken out more than $36
million in fees and expenses -- more than 10% of the fund's original grub stake
-- since inception. "We cannot imagine why any shareholder would vote in favor
of current management," he wrote.

At the February 2002 annual meeting, Millennium led a successful campaign
against a proposal to renew the contract of Draper Fisher affiliate meVC
Advisers as the fund's adviser. That firm continued to manage the portfolio on
an interim basis, but later resigned. Rather than find a new adviser, the board
opted to run the portfolio internally. That was a change mostly on paper: The
board chose Grillos as portfolio manager, a role he'd already filled as a
principal of a fund subadviser called Draper Fisher Jurvetson meVC Management.

That maneuver heightened the bitterness between Grillos and the institutions
seeking to cure the discount. In his Jan. 15 letter to holders, Knapp blasted
the decision to keep Grillos in charge as "a display of shocking contempt for
the binding vote of shareholders."

But Knapp would get his revenge. In April, Millennium's Millenco unit sued the
fund in Delaware Chancery Court demanding new elections for directors. The suit
alleged MVC's proxy statements in 2000 and 2001 omitted key information:
specifically, that two supposedly independent directors, Larry Gerhard and
Harold Hughes, Jr., actually had clear ties to Grillos. Both men were officers
at eVineyard, an online wine seller for which Grillos served as chairman. Alas,
the proxy failed to mention Grillos' role at eVineyard. Millennium won on
summary judgment; the judge ordered the fund to hold a new vote.

With that vote a month away, the rhetoric is heating up. Grillos' wants other
investors to see Millennium's Knapp as an impatient carpetbagger out to destroy
the fund. The dissidents paint Grillos as greedy and incompetent. And they
question his ethics.

As it happens, the Delaware judge's ruling on the proxy issue alludes to a
proposed transaction -- never completed -- which resulted in an apparent
conflict of interest for Grillos and the other MVC directors connected with
eVineyard.

According to the court's order, in November 2001, just one day after Grillos
resigned as chairman of eVineyard, and while he was still a director and
investor in that company, Grillos and Gerhard proposed a complex transaction
which would have resulted in MVC owning an equity stake in eVineyard. In a
highly complex deal, eVineyard would have acquired some software technology from
an MVC portfolio company called Shop-

Eaze, with $1 million in funding to come from MVC.

In an internal e-mail that surfaced as an exhibit in the case, Paul Wozniak,
then CFO of the fund and a principal with its subadviser, warned that the deal
as planned posed serious conflicts. He saw it as a "rather conflicted
transaction," "extremely dicey at best" from a legal point of view, and "a deal
that essentially boils down to a straight purchase of eVineyard stock despite
the machinations created to make it look otherwise." In the end, the deal died
-- as did ShopEaze. Wozniak later resigned.

Both sides have filed preliminary proxies with proposed board slates. The
Grillos nominees include, among others, former CBS chief executive Michael
Jordan and long-time Silicon Valley public-relations man Fred Hoar. Among the
rival group's nominees are Knapp and Terry Feeney, both executives with
Millennium Partners, as well as Karpus Management CEO George Karpus.

Ultimately, the strategy directors support is more important than who they are.
In an earlier attempt to confront holder concerns, MVC agreed to buy back up to
$20 million worth of stock. It also expanded its investment strategy to include
lending to venture-backed companies, with the long-term goal of generating
enough income to cover the fund's expenses and to pay a dividend.

In an interview last week, Grillos asserted that the fund is now well
positioned, that it has the right staff, the right strategy, the right team and
the right opportunity to succeed in the venture arena. By contrast, MVC's latest
proxy filing describes Millennium as "a short-term profit-seeker in a long-term
fund designed for individual investors."

Millennium's proxy shoots back that the contest gives holders a chance to
"install management whose only goal will be to create value for all of the
Fund's shareholders," vowing to make eliminating the discount a "high priority."

Surprisingly, the latest Millennium filing does not mention liquidation, and
instead calls for hiring a new investment advisor, and broadening the strategy
to include investments in income-producing securities of mature, non-tech
companies.

So far, the dissidents seem to have an edge. The Millennium slate is backed not
only by Karpus, but also by DEUTSCHE BANK, which holds a 3.9% stake, and by C.S.
McKee, a Pittsburgh-based investment firm with a 3.2% stake, as well as a
related firm called Dartmouth Capital Advisers with a 1.1% stake. That's 18.7%
of the shares voting to oust Grillos. By contrast, the CEO owns just 36,162
shares, including 23,300 purchased last week. As a whole, the Grillos slate
holds 46,062 shares, or about 0.3% of the stock.

"I just don't see why anybody would vote for the incumbent management," shrugs
Phil Goldstein, manager of Opportunity Partners, a frequent closed-end fund
investor with a "nominal" stake in MVC. "They haven't produced anything other
than big losses, except for themselves." Greg Melvin, who controls more than
4.3% of MVC's shares as chief investment officer at both C.S. McKee and
Dartmouth Capital Advisers, says he "will vote the obvious way -- which is to
throw these guys out." There's some logic in Grillos' view that the fund is too
young in MVC terms to judge its performance. Nonetheless, this certainly has
been one stinker of an investment so far.

Maybe venture investing really isn't for the masses. If the dissident group can
win anywhere close to half of the retail vote, they'll take control. That would
likely give a lift to the stock. And leave Grillos in search of work.

MVC CAPITAL FACES WRATH OF LITTLE GUYS, WHO FUND COURTED
By Ann Grimes
Wall Street Journal; January 31, 2002

A PEOPLE'S REVOLT may not be what the founders of meVC expected three years
ago, when the fund was launched as a way to open venture-capital investing to
the little guy.

But that is what appears to be happening.

When the fund was launched by Silicon Valley venture capitalist Tim Draper in
the heyday of the stock-market boom, ordinary investors were shut out of the
lucrative initial public offerings that made so much money for a privileged few.
Initially known as meVC Draper Fisher Jurvetson Fund 1 Inc. and now called MVC
Capital, meVC at first invested in deals spun out of Mr. Draper's high-profile
venture shop, Draper Fisher Jurveston. In March 2000, the fund held a public
offering of its own.

Within months, the Securities and Exchange Commission found fault with its
business model, which called for the fund to piggyback on Draper Fisher
Jurveston's early stage deals with follow-on investments. The fund was forced to
set up a new management arrangement, with outside investment advisers who
essentially buffered it from Draper Fisher Jurveston.

As of Oct. 31, fund documents show, MVC had invested $134 million in 26
start-ups that are now valued at $54.2 million. Its stock, which once traded at
about $19, closed yesterday at $8.54.

Unhappy shareholders have moved from grousing about poor performance and
management fees to filing lawsuits, the latest example of the woes befalling the
venture capital industry following the bloodbath in technology stocks.

Mr. Draper, who couldn't be reached for comment, has distanced himself from the
fund. In December, a Delaware judge ruled that the board failed to disclose
pertinent information about three members' business relationships and ordered
the fund to hold new elections for their seats.

Now, its largest shareholder has filed a proxy statement outlining their
complaints and announcing a seven-member slate of candidates who they hope will
oust the current board of directors. MVC matched them with a proxy statement of
its own that rebuts the charges and names its own seven-member slate. The
showdown is set for Feb. 28 at the annual shareholders meeting in Menlo Park,
Calif.

Leading the charge against MVC is Robert Knapp, the 36-year-old head of an
arbitrage team at Millenco L.P., an arm of Millenium Partners LLP, a $3 billion
hedge fund with offices in New York and London. Millenco has spent $10.8 million
to buy 6.7% of its stock.

In its proxy statement, Millenco, which is being joined by other dissident
shareholders, says MVC's cumulative return on invested capital as of Oct. 31 was
minus 70%, including fees and expenses. It says shares are trading at a discount
to their net asset value, meaning that shareholders would earn more than the
current share price if MVC's holdings -- including about $120 million in cash --
were simply divided up.

The dissidents want the fund to diversify its portfolio beyond technology
investments. They want the fund to invest in mezzanine and other
income-producing securities and pay shareholders a dividend.

They are proposing a tender offer under which the fund would buy back 25% of its
outstanding shares annually, a move they say would "liberate our company" and
get shareholders some of their money back.

Scott Nasca, director of equity investments for Karpus Investment Management
in Pittsford, N.Y., the third-largest shareholder, says his concern is he isn't
sure how much his investment is worth. "Based on the net asset value they've
published -- $11.84 -- we don't know how they are pricing the securities in the
fund. They could be artificially high or low," he says.

"Hopefully, with a new board we'd get a true value of all the investments in the
fund."

MVC Chief Executive John M. Grillos disputes Millenco's assessment of fund
performance, which he says is on par with other venture capital funds.

"Anyone looking at a venture capital fund has to understand that returns rarely
in the first years are positive," he says. "The fund was not helped by the
downdraft in the public and private technology sector valuations and market
conditions, which have created broad negative returns in the sector since 2000."

Mr. Grillos adds that he thinks the sector has hit bottom and now is at a
"turning point." The fund held onto its cash, he says, as venture deals slowed
with public offerings and merger activity and in the past six months has put $23
million into five more companies.

Mr. Grillos and other board members also maintain that Millenco is a raider
seeking a short-term profit from a long-term fund designed for individual
investors. "They claim to be here to help you. In fact, we believe, they want to
put their hands in your pockets," he told shareholders in a letter in September.
He points out that Millenco has a history of mounting aggressive campaigns "to
pressure managers and shareholders to liquidate the funds or drain them of
cash."

Three years ago, Millennium Partners successfully ousted the management of the
International Biotechnology Trust, a large investment fund in the United
Kingdom. Millenco is getting support in its battle over MVC from Thomas J.
Herzfeld, another large shareholder and well-known investor in Miami, and
investors at DB Advisors LLC, an arm of Deutsche Bank AG.

Millenco's challenge gained steam after the Delaware Court ordered the new
election. The court found that Mr. Grillos served as chairman of the board and
chairman of the compensation committee of an online company called eVineyard at
the same time that two "independent" MVC directors were officers in the wine
company.

Mr. Grillos says the fund is going beyond what the judge ordered. MVC's board
earlier this month voted to expand its membership to seven from five, and it
assembled a slate that includes six new members and Mr. Grillos. MVC says it is
good governance; Millenco says management couldn't win with five.

The MVC board also reduced directors' fees. Before September 2002, independent
directors were allotted a monthly retainer of $4,800 and $10,000 for attending
each of the board's 12 meetings that year, the proxy statement for the annual
meeting shows. The board reduced fees in September 2002, to a monthly $3,500
retainer and $6,000 attendance fee ($3,000 by phone). Two weeks ago, fees were
reduced further to a $2,500 retainer and $1,000 meeting fee, whether in person
or by phone.

The fund also has expanded its investment strategy to include venture lending,
providing late-stage money to strapped entrepreneurs. Given the current
investing climate and the number of troubled companies in Silicon Valley, Mr.
Grillos says, there is plenty of pent-up demand. "The venture debt industry had
been vacated by a lot of players," he says. The new strategy, he says, will
generate income, offset costs and perhaps spawn a dividend. The fund also
launched a $20 million stock buyback program.

Mr. Grillos says he is confident shareholders will support management. He
plans to hit the road with board members and visit institutional shareholders.
MVC also has hired MacKenzie Partners Inc., and plans to spend about $125,000 to
contact shareholders and encourage them to support management. Millenco will
spend about the same amount for the services of Innisfree M&A Inc.

The Daily Deal
STAKES RISE IN MEVC BATTLE
by Vyvyan Tenorio
12 September 2002

A judge's ruling sets the stage for a possible trial brought on by Millennium
Partners that would settle the future of the largest publicly traded U.S.
venture fund.

A Delaware Court of Chancery judge has inadvertently stoked the fires of an
increasingly acrimonious battle over the fate of meVC Draper Fisher Jurvetson
with a decision to let a dissident shareholder's complaint ride.

Vice Chancellor Stephen Lamb's decision late Wednesday, Sept. 11, sets the stage
for a possible trial brought on by Millennium Partners that could settle the
future of the largest publicly traded U.S. venture fund.

The ruling comes amid a public relations battle for shareholder hearts in which
meVC is attempting to paint Millennium as a "foreign" vulture fund with ties to
a failed attempt to murder former Wall Street corporate raider Ivan Boesky.
Millennium, which charges breach of fiduciary duty, characterized meVC's charges
as a desperate lashing out.

The ruling is another blow for meVC after losing a proxy contest in March that
led to meVC dismissing its fund manager, meVC Advisors Inc. of San Francisco,
and ending the affiliation with Redwood City, Calif., venture firm Draper Fisher
Jurvetson.

At a time when financial scandals have brought corporate accountability under
intense regulatory scrutiny and as meVC's stock steadily declines, meVC is
seeing its shareholder support erode, underlining the difficulties of operating
as a public entity.

"We take the side of shareholders, and we think Millennium's complaints are
valid," said Alex Pulisic, investment analyst for proxy advisory firm
Institutional Shareholder Services of Rockville, Md., which is representing a
number of shareholders.

George Karpus, president of Karpus Investment Management Inc. of Rochester,
N.Y., which has about 3% of meVC shares and apparently is the second-largest
shareholder after top owner Millennium, also was sympathetic to shareholder
complaints.

"We think that management and board -- if the board is truly independent -- have
to be accountable for the misery that the shareholders are going through,"
Karpus said. "The shareholders are looking at a fund that not only has lost a
lot of money but is also trading well below net asset value."

Millennium, which has been gradually buying up meVC shares since fall 2000 and
now owns more than 1 million shares, or 6.36% of the company, is seeking to hold
elections for three board seats and has said it would like to liquidate at least
part of the fund. Such a move could yield about $2 per share profit for
Millennium.

meVC Chairman John Grillos, portfolio manager since meVC's 1999 start, is acting
fund manager until a permanent manager is appointed by Sept. 30, but
shareholders want a say on the matter. On Wednesday, Lamb denied Millennium
Partners' interim injunction in favor of expedited elections.

This means Grillos, a candidate for the position, could go on managing. "Who
they decide on has to be eventually ratified by shareholders," Karpus said.

Last week, Grillos raised the stakes in a letter to shareholders, depicting the
low-profile, Cayman Islands-based hedge fund investor as an "arbitrage firm with
a record of raiding closed-end funds in England." He accused Millennium of
"raiding" shareholders' interests by buying meVC stock at a price cheaper than
its cash value and then attempting to profit from a forced liquidation.

The letter further charged that John Mulheren, a former business partner of
Millennium's reclusive manager Israel Englander at now-defunct arbitrage firm
Jamie Securities, was charged with orchestrating illegal stock trades for Boesky
in the late '80s and that he was arrested allegedly on his way to shoot Boesky.

The charges were sourced from a June 2002 Institutional Investor magazine
article, which also said that Mulheren's conviction was later reversed and
securities charges were dismissed.

Englander is the managing general partner of Millennium Partners LLC and the
sole manager of Millennium Management LLC, the managing entity.

In response, Robert Knapp, managing director of Millennium Partners, said the
letter is "filled with innuendo, empty accusations and borderline libel." "The
management and board of meVC appear to be in competition with the fund's share
price in seeking new lows," he added. meVC stock has lost about 60% since it
went public.

Through Knapp, Englander declined to comment. But his $3 billion hedge fund,
domiciled in the Cayman Islands with its principal office in New York, is
secretive, as hedge funds usually are. According to Institutional Investor,
Englander has favored arbitrage strategies, particularly bets in risk arb,
mortgage-backed securities and convertibles.

Knapp doesn't dispute his firm's role as an aggressive investor in U.K. trusts,
but he declined to elaborate on Millennium's activities or to name its
investors. But he said that meVC is putting "a spin" on its track record of
taking action against management in undervalued funds.

"There's no secret about what we've done," he said. "We've always been on the
side of an organized, methodical changeover, where shareholders are given the
option for an exit and an option to continue their investment sometimes with
better management in place."

Over the past several years, his firm has bought equity in trusts including
International Biotechnology Trust plc, Gartmore Emerging Pacific Investment
Trust plc, Scottish Asian Investment Co. Ltd., Montanaro UK Smaller Companies
Investment Trust plc and Scudder Latin America Investment Trust plc. Investment
trusts, also known as split-level trusts because of the combination of bank
borrowings and shareholders' cash in capital structure, are stock-quoted
companies somewhat similar to meVC in giving small, retail investors a more
diversified exposure.

Industry analysts said these trusts have come under pressure from investors
because of poor performance.

"There are players like Millennium coming into the so-called splits market
because these trusts have tended to have discounts to net asset value, and
they're potentially of good value," said Derek Larcombe, fund manager and
director at management services firm Morgan Stanley Quilter of London.

John Newlands, a London funds analyst at Williams de Broe, echoed: "There's a
lot of complacency in this sector, so any kind of action is to be welcomed."

In the case of International Biotechnology, Knapp claimed that, in part due to
pressure from Millennium, the [Pounds]350 million ($544 million) fund returned
[Pounds]122 million in cash to shareholders last year in a bid to satisfy
investors concerns over writedowns.

The board also replaced previous manager Rothschild Asset Management Ltd. with
Schroder Investment Management Ltd., as part of the reorganization.

Millennium has since gained notoriety for its U.K. maneuvers, the British daily
The Guardian once calling it a "predatory investor" and other publication
calling it a "vulture fund."

Vulture or not, Knapp said Millennium keeps buying meVC shares with an eye
toward profiting once the fund is either turned around or liquidated.

The San Francisco Chronicle
MVC FUND OFFERS RARE GLIMPSE AT VENTURE CAPITAL DIRTY LAUNDRY
Todd Wallack
2 August 2002

When legendary Silicon Valley venture capitalist Tim Draper launched a publicly
traded investment fund two years ago, he promised the MVC fund would bring
private equity to the masses.

Now the firm's feud with a disgruntled shareholder is becoming fodder for mass
consumption as well, a departure from the normally genteel world of venture
capital where well-heeled investors typically keep bickering behind closed
doors.

In the latest shot, Millennium Partners of New York asked a Delaware judge to
void MVC board elections in March, saying the firm failed to disclose two
nominees' ties to the CEO -- raising doubts about whether they can be considered
independent.

Specifically, Millennium complained that MVC (also known as MeVC Draper Fisher
Jurvetson Fund I) should have disclosed that MVC Chairman and Chief Executive
Officer John Grillos served as chairman of EVineyard, a Portland, Ore.,
e-commerce venture where two of the MVC board nominees also sat on the board.
Larry Gerhard served as chief executive and Harold Huges as chief operating
officer. MVC said it did not know what connections they now have to EVineyard,
which didn't return phone calls.

In addition, Millennium griped that the company did not disclose that MVC CEO
Grillos personally invested (through Osprey Ventures) in at least two companies,
ShopEaze Systems of Sunnyvale and BlueStar Solutions of Cupertino, which MVC
invested in.

In its lawsuit, Millennium asked a judge to order new elections for three of the
seats, those held by Gerhard and Hughes and a vacant seat. Millennium, which
owns 5 percent of MVC's shares, then hopes to put forward its own slate of
nominees. If approved by shareholders, that would give Millennium a majority of
the board and control of the company.

"In our estimate, we would resoundly trounce the (company nominees)," said
Millennium Managing Director Robert Knapp. "More than that, we want a voice."

But MVC accused Millennium of simply trying to drum up publicity. "The lawsuit
has no merit," said spokesman Jim Lucas.

Lucas said the firm didn't disclose the connections to EVineyard or the startups
because the investments are relatively tiny. Though he declined to give a dollar
amount, he noted that Grillos owns well under the 5 percent benchmark MVC
considers significant.

In addition, MVC pointed out that Millennium conceded in a letter that its
lawsuit contained at least one error. This isn't the first time Millennium has
gone to court.

Earlier this year, Millennium sued MVC's investment advisers, MeVC Advisors of
San Francisco, for charging what it called excessive fees. Millennium also sued
to force MVC to abide by a shareholder vote canceling a contract extension with
MeVC.

In June, both MeVC Advisors and its representative on the board, Peter
Freudenthal, resigned.

Like many other tech funds, MVC's shares have fallen sharply in the past two
years. MVC closed at $7.62 Thursday, down from an initial offering price of $20.
So far, MVC has invested $170 million of the $330 million raised in more than
two dozen startups.

Knapp says other shareholders are also disenchanted. "We've received
overwhelming expressions of gratitude," he said.

E-mail Todd Wallack at twallack@sfchronicle.com.

The Daily Deal
MILLENNIUM BLASTS MEVC BOARD
by Robert Walzer
1 August 2002

Investors suing the venture firm allege that meVC's directors concealed key
conflicts of interest.

Millennium Partners LP, a major investor in meVC Draper Fisher Jurvetson that
has sued the venture firm over allegedly excessive fees and attempted to shut it
down, has filed an amended complaint in an effort to oust several board members.

Millennium, which has had some success in forcing publicly traded meVC to change
its management and fee structure, is taking aim at directors it claims have
conflicts of interest not revealed in proxy statements.

In a statement, meVC responded that the amended suit has no merit and that it
will fight it in court. "Our highly qualified board of directors is pursuing a
disciplined, orderly program to build value for meVC shareholders at a
challenging time in the capital markets," it said. "We will not be diverted from
our mission."

The case, which began in March, is one of the few public disputes involving a
venture capital fund and its investors. In the most recent development, meVC
reorganized its management structure in June and accepted the resignation of two
top executives of the fund's management firm, meVC Advisers Inc., whose contract
won't be renewed when it expires this month.

The amended suit, filed Tuesday, July 30, in the Delaware Court of Chancery,
contends that meVC's proxies never disclosed that meVC chairman and CEO John
Grillos was also chairman and a shareholder of online wine retailer eVineyard
and that two meVC directors, Larry Gerhard, CEO of eVineyard, and Harold Hughes,
the wine retailer's president, worked for him there. That suggests the
executives are not truly independent directors, the suit charges.

The action also alleges that the proxies fail to reveal Grillos' affiliation
with Osprey Ventures LP, an investor in eVineyard and in two of meVC's portfolio
companies, ShopEaze Systems and BlueStar Solutions. The suit suggests that
Grillos used meVc funds to support his investments made in those companies
through Osprey.

"In the VC world, some of these webs of relationships are much more common,"
said Robert Knapp, managing director of Millennium, a New York-based investment
firm.

"But this is another example of how management does not understand the higher
disclosure requirements of running a public company."

Millennium is seeking to hold new elections for three of the directors in an
effort to obtain representation on meVC's board. Millennium owns about 1 million
shares in the firm, or nearly 6% of outstanding shares. Shares closed at $7.65
Wednesday compared with above $15 when Millennium started buying shares in fall
2000. The stock price amounts to less than the more than $8 a share of cash that
meVC has on hand.

meVC was launched in 1999 as a way for retail investors to grab a piece of the
venture capital pie. It was the brainchild of Draper Fisher Jurvetson founder
Timothy Draper and was designed to piggyback on the Redwood City, Calif., firm's
early-stage bets as a late-stage investment vehicle.

But the Securities and Exchange Commission hasn't allowed that to happen, and
many of its investments have been in the hardest-hit technology sectors.

The Wall Street Journal
-----------------------
SHAREHOLDERS DEFEAT MEVC'S BID TO ALTER MANAGEMENT OF FUND
9 April 2002

SAN FRANCISCO -- MeVC Draper Fisher Jurvetson Fund I, a prominent publicly
traded venture-capital fund, said its move to make a structural change in fund
management was defeated by shareholders.

That was at least a small victory for dissident shareholder Millennium Partners
LP, which opposed the change and has been seeking to have the fund, which last
week listed its assets at about $231 million, return some of its cash to
investors.

The proposal put forward by meVC in its proxy would have both renewed and
altered the fund's agreements with its two advisers. The change would have given
the fund's board power to make such changes alone in the future. Now, such
changes require board and shareholder approval.

Just before meVC's shareholder meeting on March 27, the New York Stock Exchange
ruled that the changes were "nonroutine" and therefore should go to individual
shareholders for a vote. For routine changes, brokerage firms and other money
managers that hold shares for investors can vote proxies and generally vote in
favor of management proposals.

The fund now has 150 days from the shareholder meeting to renew its agreement
with advisers. John Grillos, chief executive of the fund, said meVC will speak
with shareholders in that period to determine what the majority of shareholders
want the relationship between the fund and its advisers to be.

Private Equity Week
ROUND I: MILLENNIUM LANDS A JAB ON MEVC
Charles Fellers
Apr 1, 2002

The dust has settled on round one of New York hedge fund Millennium Partners vs.
the management team of Silicon Valley closed-end mutual fund MeVC Draper Fisher
Jurvetson Fund I Inc. (MeVC). At the moment, Millennium has a slight advantage.

Claiming dissatisfaction with venture-capital-oriented MeVC's performance and
structure, Millennium filed a breach of fiduciary duty suit in February and
initiated a proxy fight in anticipation of last Wednesday's annual shareholders'
meeting.

After the shareholders' meeting, the judge sounded the bell with both parties
still standing. Due to intervention by the New York Stock Exchange (NYSE),
MeVC's board did not generate enough votes to pass two proposed advisory
agreements that are controversial because they won't allow for shareholder
review in the future. Shareholders will vote again on April 25.

Under the NYSE ruling, which came hours before the event, 7.2 million of the
16.5 million shares were changed to non-routine from routine and discarded. The
board needs 50% of all shares or 67% of the voted shares to approve the
proposals. And qualifying votes must be cast by individual shareholders. That
makes them different from the non-routine shares that were cast at brokers'
discretion on behalf of individual shareholders.

MeVC's board did not disclose the results of the voting. Theoretically, the
board must have collected less than two-thirds (or roughly 6 million) favorable
votes needed to pass the proposals under that scenario.

Millennium Partners Managing Director Robert Knapp estimates that 4 million
shares were voted against the proposal, but that number could not be confirmed.

"If we're right in our analysis, then they've got a pretty high hurdle," says
Knapp. If 4 million shares vote against the proposal at the April 25 meeting,
then MeVC's board would need at least 8 million favorable votes to pass its
proposals. "This is one step toward victory," he says.

However, sources close to MeVC also claim a slim, undisclosed margin of victory.

MeVC Chairman John Grillos says, "We left the meeting pretty happy, but also
committed to speak with our shareholders."

ROUND TWO

MeVC has to either attract the necessary votes or deal with Knapp, their lead
antagonist. As reported last week in Private Equity Week (see PEW, 3/25, p. 1),
Knapp has said he would favor a complete liquidation of the fund's portfolio, a
change in management or a restructuring of the investment agreement.

It's anybody's guess when and if those negotiations will take place.

"My read on it is they're not really going to ask to sit down before the next
adjournment," Knapp says.

Even though Grillos says he looks forward to meeting with shareholders, Knapp
may not be high on his list.

"This fund was put together with the individual in mind as a core buyer, and he
doesn't qualify as a core buyer," Grillos says, adding that 90% of MeVC's
shareholders are individuals.

Knapp has been successful in similar conflicts with vehicles in the UK. Alan
Ray, a London-based analyst covering UK investment trusts for Credit Lyonnaise,
says these conflicts are more common in the more-mature UK market, citing two
resolved cases already this year.

"The way they tend to work in 99 times out of 100: It tends to be the knowledge
of the threat that [the shareholders] will take the next steps that will get the
board to the [negotiating] table," Ray says.

"Certainly, if I was advising a board in the UK and one of the shareholders was
unhappy, I would advise the board to talk to them," says Ray, who commented
based on his experience with UK investment trusts.

Knapp complains that MeVC's board has ignored him before. But after this latest
bout, they aren't likely forget him anytime soon.

Contact Charles Fellers at: Charles.Fellers@tfn.com

BusinessWeek
THIS FUND'S TROUBLES MAY ONLY GROW -
CLOSED-END VENTURE-CAPITAL FUND MEVC ADVISERS' HIGH FEES AND POOR PERFORMANCE
HAVE SPARKED A SHAREHOLDER LAWSUIT
March 24, 2002

When meVC Advisers launched the first publicly traded venture-capital fund in
March, 2000, the timing seemed impeccable. Investors were crazy for tech stocks,
and the idea of getting in early on the next Microsoft was too delicious to
resist. The meVC Draper Fisher Jurvetson Fund I () snapped up $312 million in
its initial public offering.

Two years later, the results couldn't be much worse. Since its inception, the
fund's share price has fallen 55%, to $9. That loss is particularly acute
because during the entire time, some 60% of the fund's assets were in cash and
money-market funds -- which didn't fall during the tech meltdown. Then there are
the high fees that meVC Advisers charges shareholders despite the fund's poor
performance -- 2.5% of assets annually plus 20% of any profits in the fund.

Those investments and fees have now sparked a lawsuit from shareholder activist
Millennium Partners, a private money manager that owns 4% of meVC's shares. The
suit, filed in February, alleges that San Francisco-based meVC Advisers failed
to fulfill its "fiduciary duty" as a venture-capital manager by leaving so much
money in cash. "The fund still has $160 million invested in cash," says Robert
Knapp, Millennium's managing director. "To earn a 2.5% management fee on that
cash, when all meVC is doing is investing it in money-market funds, is excessive
and absurd," he says.

"WITHOUT MERIT"? Last year, meVC hired Fleet Investment Advisors to run the cash
portion of the fund for 0.10% of assets, according to the firm's most recent
proxy statement. Yet meVC's Oct. 31, 2001, annual report reveals that it
collected its 2.5% fee for that cash. "Thus, meVC Advisers had a gross profit of
more than $3.8 million in Fiscal 2001 from uninvested cash balances on fees paid
to it by the fund, for which it performed no services or unreasonably minimal
services," Knapp's suit alleges.

Alex Zion, an meVC spokesperson, issued a statement saying the firm "believes
the case is without merit," but declined to comment further because of the
pending litigation.

Because meVC is a publicly traded closed-end fund, its share price isn't tied to
the value of its underlying portfolio or its net asset value (NAV). So even
though the fund's NAV fell only 30% since inception, to a current value of
$14.02 a share, its market share price has fallen even further, to $9, meaning
it trades at a 36% discount to NAV. That $9 share price is actually less than
the $10-per-share of cash and short-term bonds the fund now has on its books.

HIGHLY ILLIQUID. "It's almost unheard of for a closed-end fund to trade below
its cash levels," says Thomas Herzfeld, a closed-end trader who owns shares of
meVC, though he isn't involved with the suit. If meVC's discount closed, shares
would rise from $9 to $14.02 -- a 55% gain.

Why is the discount so big? Because the tech startups meVC owns are highly
illiquid and don't trade on any exchange, their valuation has become a subject
of debate. Knapp's suit alleges that meVC Advisers hasn't properly marked down
the value of some holdings "in a timely manner," so that it can continue
collecting management fees on assets that may have an inflated value.

The fund's latest quarterly report reveals that the Valuation Committee of its
board of directors marked down the price of one security, MediaPrise, by 100% on
Jan. 31. Three months earlier, meVC Advisers had valued it at its acquisition
cost of $2 million. How did a $2 million value drop to zero in such a short
period? "That is a very troubling example," says Knapp.

LOOKING FOR A NEW MANAGER? Though the goal of Knapp's suit is to recoup the
excess fees, at this point he would also like to have meVC Advisers dismissed as
the fund's manager. "There's a lot of ways this fund could be made into a very
attractive investment, but not with meVC Advisers at the helm," he charges.

Shareholders are to vote on the renewal of meVC's advisory contract on Mar. 27.
If they don't approve it, meVC's contract will expire, and the fund's board will
have to find a new manager.

It won't be an easy victory for disgruntled shareholders, however. Five days
after Knapp filed his lawsuit, meVC Advisers filed a proxy statement, asking
shareholders to amend its investment advisory contract. Under its proposal,
shareholders would no longer vote annually to renew the contract. Only the
fund's board of directors would vote. Two of the board's five members are
employees of meVC, the proxy states.

"UNBELIEVABLE." If meVC loses this fight, the fund's board will have to
negotiate with disgruntled shareholders like Knapp and Herzfeld. "It's
unbelievable that the board hasn't taken any measures to narrow the discount of
this fund," says Herzfeld. "I can think of a dozen different ways of doing
that."

His solutions include buying back shares of the fund or distributing the excess
cash to shareholders. As the vote rapidly approaches, however, looks like a
major battle is about to ensue.

By Lewis Braham in New York
Edited by Douglas Harbrecht

The Wall Street Journal
MEVC IS SUED BY LARGEST SHAREHOLDER OVER COLLECTION OF MANAGEMENT FEES
By Lisa Bransten, Staff Reporter of The Wall Street Journal
March 18, 2002

Another battle is breaking out between a high-profile investment firm and the
people who invested money in it.

Millennium Partners LP, the largest shareholder of publicly traded venture
fund meVC Draper Fisher Jurvetson Fund I, last month sued one of the advisers
and the fund, alleging they are collecting excessive management fees. Millennium
today plans to announce that it will mount a proxy fight to block a change in
the fund's structure proposed by management.

The proxy fight and suit -- filed in U.S. District Court in Delaware - are
more evidence of investor dissatisfaction with the performance and management of
venture investors. It follows a suit by investors in Internet incubator idealab
that seeks to liquidate that Pasadena, Calif., firm.

Peter Freudenthal, a fund board member and chief executive of its parent
company, meVC Inc., wouldn't comment in detail. But he said the suit is without
merit and the fund plans to fight it in court.

MeVC was formed to help individuals participate in venture-capital investing.
It was launched by Tim Draper, founder of venture-capital firm Draper Fisher
Jurvetson, whose past investments include Kana Software Inc. and e-mail firm
Hotmail Inc., which was sold to Microsoft Corp.

Even in the battered world of venture investing, meVC's performance stands
out. From its founding in May 2000 until Oct. 31 2001, the value of its venture
investments declined 39%. That would place its performance in the bottom
quartile of funds tracked by research firm Venture Economics, which reports a
13% average decline for funds launched in 2000 during the 12-month period ending
Sept. 30.

As of October, meVC had put $148.9 million into 22 companies, and those
investments were valued at $90.9 million.

On Friday, shares in meVC traded at $8.90, off 15 cents, in 4 p.m. New York
Stock Exchange composite trading. That is less than the $9.64 a share of cash
and short-term investment's on the firm's balance sheet.

The suit's main charge is that the fund paid advisers meVC Advisers Inc. a
2.5% management fee -- or $7.4 million -- last year, even though the majority of
the fund's assets were in cash or short-term securities. Millennium argues that
such assets aren't hard to manage and shouldn't entail premium fees, unlike
overseeing investments in private companies.

Millennium plans to ask other shareholders not to approve a move by meVC to
allow the board alone to make some changes in who makes investment decisions
about the fund. Currently, such a change requires a vote of the board and
shareholders.

Robert Knapp, a managing director at Millennium, said the suit and the proxy
fight are designed to help push for either a change in management or for the
distribution of cash back to shareholders.

Barry Hutchison, a spokesman for Mr. Draper, said: "We still have full faith
that this fund provides another asset class for investors to get involved in
venture capital."

MEVCSHAREHOLDERS.COM
A WEBSITE FOR SHAREHOLDERS OF MVC CAPITAL (NYSE:MVC)
SPONSORED BY MILLENNIUM PARTNERS

SEC FILINGS

Format Form Type Filing Date Size

Definitive proxy statement, contested solicitations html text 14A 01/31/03 14KB
Preliminary proxy statement, contested solicitations html text 14A 01/16/03 14KB
General statement of acquisition of beneficial ownership html text 13D/A 01/16/03 19KB
General statement of acquisition of beneficial ownership html text 13D/A 08/28/02 26KB
Additional definitive proxy soliciting html text 14A 08/28/02 15KB
materials filed by non-management and Rule 14(a)(12) material

MEVCSHAREHOLDERS.COM
A WEBSITE FOR SHAREHOLDERS OF MVC CAPITAL (NYSE:MVC)
SPONSORED BY MILLENNIUM PARTNERS

COURT ORDER

Delaware Chancery Court Order for MVC to Hold New Director Elections
December 19, 2002

This site is managed and maintained by Citigate Sard Verbinnen on behalf of
Millennium Partners, L.P.

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY

MILLENCO L.P., )
)
Plaintiff, )
)
V. ) C.A. No. 19523
)
meVC DRAPER FISHER JURVETSON )
FUND, I, INC., JOHN M. GRILLOS )
LARRY J. GERHARD, HAROLD E. )
HUGHES, JR., and CHAUNCEY F. )
LUFKIN, )
)
Defendants. )

MEMORANDUM OPINION AND ORDER

Submitted: December 2 2002
Decided: December 19, 2002

Joseph A. Rosenthal, Esquire, Carmella P. Keener, Esquire, ROSENTHAL, MONHAIT,
GROSS & GODDESS, P.A., Wilmington, Delaware, and Richard W. Cohen, Esquire,
David C. Harrison,, Esquire, Michelle Rego, Esquire, LOWEY DANNENBERG BEMPORAD &
SELINGER, P.C., White Plains, New York, Attorneys for Plaintiff

Martin P. Tully, Esquire, David J. Teklits, Esquire, Thomas W. Briggs, Jr.,
Esquire, MORRIS, NICHOLS, ARSHT & TUNNELL, Wilmington, Delaware, and Jonathan L.
Greenblatt, Esquire, Neil H. Koslowe, Esquire, SHERMAN & STERLING, Washington,
D.C., Attorneys for Defendants

LAMB, Vice Chancellor.

The plaintiff in this action is Millenco L.P., a privately owned company
engaged in the business of investing for profit. Millenco is the largest
stockholder of the defendant meVC Draper Fisher Jurvetson Fund I, Inc. (the
"Fund"), owning over 6.3% of the Fund shares, purchased on the open market for a
total purchase price of more than $10 million. Millenco has owned those shares
continuously since before the record date of the Fund's 2001 Annual Meeting of
Stockholders ("2001 Annual Meeting").

The Fund is a Delaware corporation organized as a closed-end mutual fund
that has elected to be treated as a business development company under Section
54 the Investment Company Act of 1940, 15 U.S. C. ss. 80a, et seq. (the "1940
Act"). The Fund's stated investment objective is long-term capital appreciation
from venture capital investments in information technology companies. In March
2000, the Fund conducted an initial public offering of its stock at $20 per
share, realizing $311,650,000 of net proceeds. As of August 30, 2001, the
closing price of the Fund's stock on the New York Stock Exchange had declined to
$7.85 per share and the Fund's net asset value had declined to $12.35 per share.

The other defendants in this action are Larry J. Gerhard, Harold E.
Hughes, Jr., Chauncey F. Lufkin and John Grillos, who are the current members of
the Fund's board of directors. Before the IPO, the founders of the Fund
appointed a five-member board of directors, consisting of the four individual
defendants and Peter S. Freudenthal. Two of the five directors were
representatives of the two Fund advisers: Freudenthal was a principal of MeVC
Advisers, Inc. ("VC Advisers") and defendant Grillos is, a principal of Draper
Fisher Jurvetson MeVC Management Co., LLC ("Draper Advisers"). Freudenthal was
the Fund's President until he resigned in June 2002. Grillos has, at all times
relevant to the complaint, been the Fund's CEO. Section 56(a) of the 1940 Act
requires that a majority of the Fund's directors be independent. Gerhard,
Hughes, and Lufkin were appointed to serve as the Fund's independent,
disinterested directors. These three disinterested directors also comprised the
Fund's three-member Audit Committee.

The directors' terms of office were staggered, with Freudenthal and
Grillos designated to stand for reelection to three-year terms in 2001, Gerhard
in 2002, and Hughes and Lufkin in 2003. Freudenthal and Grillos were reelected
at the Fund's 2001 Annual Meeting. Gerhard was reelected in 2002.

II.

This action was begun on April 3, 2002. In the second amended complaint,
Millenco seeks, among other things, to invalidate the elections of directors at
the 2001 and 2002 Annual Meetings on grounds that the proxy solicitations
conducted in connection therewith were materially false and misleading. At the
heart of this claim lies the Fund's failure to disclose: the existence of
certain: relationships between and among Grillos, an inside director, and
Gerhard and Hughes, two nominally independent directors. These relationships
arise out of the involvement of all three (i.e., Grillos, Gerhard and Hughes) in
an enterprise known as eVineyard, Inc. Millenco contends that full and accurate
disclosure of the nature of those relationships was necessary for Fund
stockholders to make an informed judgment about the "independence" of both
Gerhard and Hughes.

A. Grillos's Involvement in eVineyard
----------------------------------

The business relationship of Grillos and Gerhard goes back for some years
to a time when Grillos hired Gerhard as CEO of a company known as Test Systems
Strategy, Inc. In 1999, Gerhard solicited Grillos to be an initial investor in
eVineyard. Eventually, Grillos invested $256,000 personally, another $1,474,000
through iTech which Grillos managed as a principal, as well as additional sums
as a limited partner in Osprey Ventures which invested approximately $1,500,000
in eVineyard.

In May 1999, Grillos was named to the eVineyard board of directors and
also appointed as both Chairman of the Board and Chairman of the Compensation
Committee. Pursuant to the eVineyard by-laws, the Chairman of the Board is an
executive officer of the corporation. Moreover, Section 3.4 of those by-laws
provides that "if the chief executive officer [i.e. Gerhard] is not also the
chairman of the board, then the chief executive officer [Gerhard] shall report
to the chairman of the board [i.e. Grillos]." Grillos continued to serve in
these roles through November 6, 2001, when he resigned as Chairman of the Board,
January 28, 2002, when he resigned as a director and as Chairman of the
Compensation Committee, but retained board visitation rights. While he was
Chairman of the Board and Chairman of the Compensation Committee, eVineyard
entered into a revised employment agreement with Gerhard. Grillos testified that
he "took the lead" in terms of negotiating this contract with Gerhard.

Gerhard is a director of eVineyard and served as its CEO at all relevant
times. Hughes is also a director of eVineyard and, for a time in 2001, served as
COO/President. They are both substantial eVineyard stockholders.

B. Grillos and Gerhard Propose a Fund Investment in eVineyard
----------------------------------------------------------

On November 7, 2001, the day after Grillos's resignation as Chairman of
eVineyard, Grillos and Gerhard, proposed a transaction that Paul Wozniak, a
principal of MeVC Advisers and CFO of the Fund, described as one in which "the
[F]und would wind up owning eVineyard stock in a deal that essentially boils
down to a straight purchase of eVineyard stock (for $1 million] despite the
machinations created to make it look otherwise. "(1)Wozniak also noted: "Even if
this transaction proves technically legal (which is questionable at this
juncture), the appearance of conflict is so great that we at meVC advisors do
not wish for this deal to move forward.(2)

C. 2001 Proxy and Election
-----------------------

In 2001, Grillos and Freudenthal were up for reelection to the Board at
the annual shareholders meeting. On March 1, 2001, the Fund filed a proxy
statement with the SEC that included the Board's, recommendation for the
reelection of these two directors. The proxy statement disclosed Grillos's and
Freudenthal's status: as "interested persons" of the Fund due to their
affiliation with the Fund's investment advisers. It also disclosed that Gerhard,
Hughes and Lufkin were the Fund's "disinterested" directors. Grillos's biography
included a description of his positions with the Fund and its sub-adviser and
certain other positions he had held or was holding at the time. It did not
disclose his positions with or investment in eVineyard or his relationships with
Gerhard and Hughes. Grillos and Freudenthal ran unopposed and on April 21, 2001
were reelected to three-year terms.

D. 2002 Proxy and Election
-----------------------

On February 25, 2002, the Fund filed with the SEC the proxy statement for
the 2002 annual shareholders meeting. The proxy included two Board-recommended
proposals for shareholder approval: (i) new advisory agreements with the Fund's
investment adviser and sub-adviser,(3) and (ii) Gerhard's reelection to the
Board. The, proxy statement disclosed that Gerhard. was not an "interested"
person of the Fund. His biography included his position as Chairman of the Board
of eVineyard (having succeeded Grillos), as well as his prior positions as
President: and CEO of that company. It did not, however, disclose Grillos's
relationship to eVineyard. Gerhard ran unopposed and was reelected.

Millenco opposed the ratification of the new advisory agreements and
successfully conducted a campaign to defeat them.

III.

The parties have cross-moved for summary judgment on Millenco's claim
seeking to invalidate the 2001 and 2002 elections of directors on grounds of

-------------------
(1) Keener Aff. Ex. 22.
(2) Id.
(3) After the Fund's inception, meVC Advisers became the investment adviser
to the Fund. Freudenthal was president, CEO and chairman of the board of
directors of meVC Advisers. Additionally, Draper Advisers became the
sub-adviser to the Fund. Grillos is the managing member and a 35%
shareholder in Draper Advisers.

breach of the directors' duty of disclosure.(4) Pursuant to Court of Chancery
Rule 56, summary judgment should be granted where there are no genuine issues of
material fact and the moving party is entitled to judgment as a matter of
law.(5) In deciding a motion for summary judgment, the facts must be viewed in
the light most favorable to the non-moving party, and the moving party has the
burden of demonstrating that no material question of fact exists.(6) "When a
moving party has properly supported its motion, however, the non-moving party
must submit admissible evidence sufficient to generate a factuat issue for trial
or suffer an adverse judgment.(7) Although the parties have crossed-moved for
summary judgment, that fact "does not act per se as a concession that there is
an absence of a factual issue."(8) Here, there are no material issues of fact in
dispute and the cross-motions present purely questions of law.

It is undisputed that no information relating to Grillos's association
with eVineyard, Gerhard, and Hughes was ever disclosed to the Fund's
shareholders. Instead, the Fund's proxy statements have both disclosed that
Gerhard, Hughes and Lufkin are "Independent Directors" who are not: "interested
persons" within the meaning of the 1940 Act. While the 2002 proxy statement
discloses that Gerhard and Hughes are both affiliated with eVineyard, it does
not disclose Grillos's past or current relationships with that company.

Millenco makes a plain and powerful argument that the omitted information
about the Grillos/eVineyard connection was material. First under Delaware law,
the fiduciary duties of directors require that they disclose fully and with
complete candor all material facts when they solicit proxies from
stockholders.(9) Second, that duty is "best discharged through a broad rather
than a restrictive approach to disclosure,"(10) and mere technical compliance
with a statutory mandate or relevant regulations does not create a safe harbor
from liability for deceptive disclosures or material omissions.(11) Third, "[a]n
omitted fact is material if there is a substantial likelihood that a reasonable
investor would consider it important in deciding how to vote."(12) Finally,
where, as here, the omitted information goes to the independence or disinterest
of directors who are identified as the company's "independent" or "not
interested" directors, the relevant inquiry is not whether an.actual conflict of
interest exists, but rather whether full disclosure of potential conflicts of
interest has been made."(13) Applied to the facts presented, Millenco argues
that the failure of either proxy statement to disclose or describe Grillos's

-------------------
(4) The defendants have also moved with respect to two other aspects of the
complaint. Millenco's only response to this portion of the defendants'
brief is to state as follows: "Quite simply, neither of these claims is
at issue in this case."

(5) See Williains v. Geier, 671 A.2d 1368, 1375 (I)el. 1996).

(6) See Tanzer v..Int'l General Indus., Inc., 402 A.2d 382, 385 (Del. 1979)
(citing Judah V. Delaware Trust Co. . 378 A.2d, 624, 632 (Del. 1977)).

(7) Id.; Ch. Ct. R. 56(e).

(8) United Vanguard Fund, Inc. v. Takecare, Inc., 693 A.2d 1076, 1079 (Del.
1997).

(9) Arnold v. Society for Savings Bancorp, Inc., 650 A.2d 1270, 1277 (Del.
1994).

(10) Zirn v. VLI Corp., 621 A.2d, 773, 779 (Del. 1993)

(11) Lynch v. Vickers Energy Corp., 383 A.2d 278, 281 (Del. 1978).

(12) Rosenblatv. Getty Oil Co., 493 A.2d 929 944 (Del. 1985).

(13) Wilson v. Great American industries, Inc., 855 F.2d 987, 994 (2d Cir.
1988).

relationship to eVineyard renders the proxy statements materially misleading and
incomplete. A fund stockholder, Millenco suggests, would certainly have regarded
the omitted information material in deciding how to vote on the election of
directors in both 2001 and 2002.

The defendants make two arguments to avoid the result urged by Millenco.
First, they argue that because the directors do not meet the definition of
interestedness under the 1940 Act, the omitted information is immaterial as a
matter of law. Second, the defendants argue that disclosure of the omitted
information was not required because, when viewed in the context of the totality
of information regarding Grillos's relationship to eVineyard, the omitted
information does not bear materially on Gerhard's and Hughes's independence
These arguments are untenable.

With respect to the first argument, the defendants' obligation to
disclose information that materially bears on Gerhard's and Hughes's
qualifications to serve as disinterested directors of the Fund does not turn on
some legal conclusion about their status under SEC rules and regulations. SEC
publications in the area reinforce this point. On October 19, 1999, the SEC in a
release titled "Interpretive Matters Concerning Independent Directors of
Investment Companies"(14) stressed the importance of the independent directors'
role as "watchdogs" in investment companies. It concluded by issuing
interpretive guidance concerning the situations under which a director would be
deemed "interested" and therefore "not independent," as follows (bracketed
material added):

The staff believes that a fund director [i.e., Gerhard] who serves as a
chief executive officer of any company [eVineyard] for which the chief executive
officer of the fund's advisor [Grillos] serves as a director also may be treated
as "interested." The relationship between the fund director and the adviser's
chief executive officer may tend to impair the director's independence because
the adviser's chief executive officer has the power to vote on matters that
affect the director's compensation and status as chief executive officer of the
company. In this instance, the funddirector may act with respect to fund matters
in a manner to preserve his or her relationship with the company and with the
adviser's chief executive officer, rather than in the interest of the fund's
shareholders.

The need to disclose relationships of this kind was reiterated by the SEC
when it promulgated a new Item 22 to Schedule 14A to provide for a minimum
threshold of disclosure obligations in proxy materials relating to.the election
of fund directors:

(b) Election of Directors. If action is to be taken with respect to the
election of directors of a Fund, furnish the following information in the proxy
statement ...

(10) If an Officer of an investment advisor [Grillos] ... of the Fund,
serves, or as served since the beginning of the last two completed
fiscal years of the Fund, on the board of directors of a company
where a director of the Fund or nominee for election as director
who is not or would not be an "interested person" of the Fund
within the meaning of section 2(a)(19) of the Investment Company
Act of 1940 ... is, or was since the beginning of the last two
completed fiscal years of the Fund, an officer [Gerhard and
Hughes], identify:

(i) The company;

-------------------
(14) Release No. IC-24083, 1999 SEC No-Act. LEXIS 844.

(ii) The individual who serves or has served as director of the company
and the period of service as director;

(iii) The investment advisor ... where the individual...holds or held
office and the office held; and

(iv) The director of the Fund, nominee for election as director...who is
or was an officer of the company; the office held;.and the period
of holding the office."(15)

These amendments were effective as of January 31, 2002.(16) Thus, when
the 2002 proxy statement was issued, disclosure of these relationships appeared
necessary as a matter of federal securities law.

Even if the relationships of the defendants did not fit perfectly within
the ambit of Section 14A requirements, nondisclosure of the relationships is not
excused under federal law. The SEC emphasized as much when it noted that the
disclosure requirements of Schedule 14A were minimum requirements and not safe
harbor determinations of materiality:

[W]e wish to emphasize that a fund's independent directors can vigilantly
represent the interests of shareholders only when they are truly independent of
those who operate and manage the fund. To that end, we encourage funds to
examine any circumstances that could potentially impair the independence of
independent directors, whether or not they fall within the scope of our
disclosure requirements.(17)

Defendants further attempt to argue disclosure is not required under the
1940 Act because the SEC has not exercised its administrative powers under
Section 2(a)(19) of the Act to declare either Gerhard or Hughes to be interested
persons. But, the SEC had no way of knowing about Grillos's involvement with
eVineyard and its possible effect on the independence of Gerhard and Hughes
because the defendants never publicly disclosed any of this information. Thus,
the absence of action by the SEC is both understandable and irrelevant. The SEC
realized that such a problem might arise.under its disclosure regime and, in its
commentary to the amendments to Item 22, stated the following:

"Our amendments regarding circumstances that may raise conflict of
interest concerns for directors benefit investors by enabling investors to
decide for themselves whether an independent director would be an effective
advocate for shareholders. Disclosure of this type of information also results
in its public dissemination, bringing these circumstances to the attention of
the fund shareholders, and encouraging the selection of independent directors
who are independent in the spirit of the Act. Finally, this information assists
the Commission in determining whether to exercise its authority under section
2(a)(19) of the Act to find that a person is an interested person of a fund by
reason of having had, at any time since the beginning of the last two completed
years of the fund, a material business or professional relationship with the
fund and certain persons related to the fund."(18)

-------------------
(15) 17 C.F.R. ss.240.14a-101(b)(10).

(16) See 66 F.R. 3734, *3745.

(17) 66 F.R. 3734, at *3743.

(18) Id. at *3748.

Finally, it must be said that a discussion of whether the supposedly
independent directors were in fact independent under the 1940Act is only of
passing significance to the court's analysis. The real issue, is whether
omission of the information in question violated the defendants' disclosure
duties under Delaware law. In that sense, disclosure is necessary if a
stockholder would have considered the information important in deciding how to
vote.(19) As the foregoing discussion illustrates, the omitted information would
almost certainly be considered important in the context of an election of
directors, especially in the context of it registered investment company.

Given the chance, the Fund's stockholders could have reasonably inferred,
either from Grillos's de jure powers at eVineyard or from his de facto exercise
of such powers, that his roles at eVineyard gave Grillos actual or potential
influence over Gerhard and/or Hughes, which influence could be viewed as
affecting their judgment as independent directors of the Fund. Further, the
defendants' frequent references to Gerhard and Hughes as "independent" or
"'disinterested" directors of the Fund strongly implies that they were free to
act with complete and undivided loyalty to the Fund. The Fund's stockholders
were entitled to know the omitted information in order to judge for themselves
Gerhard's and Hughes's independence and disinterestedness.

The defendants' second argument is that, even if the omitted information
tended to show a lack of director independence, a complete understanding of
Grillos's relationship with eVineyard shows that the undisclosed relationships
could not have interfered with or diminished Gerhard's and Hughes's ability to
act independently. This argument misconstrues the legal test to be applied.
"Materiality is to be assessed from the viewpoint of the 'reasonable'
stockholder, not from a director's subjective perspective."(20) In other words,
it does not matter whether Gerhard and Hughes each strongly held his ability to
act independently of Grillos or whether the other defendants shared this view.
What matters is how a reasonable stockholder would have regarded disclosure of
the facts relating to Grillos's relationships to eVineyard, Gerhard and Hughes.
Millenco correctly argues that the facts surrounding these relationships, bore
on the directors' independence and, because there is a substantial likelihood a
reasonable investor would have wanted to know about these facts in deciding how
to vote on the elections of each of Grillos, Freudenthal, and Gerhard, needed to
be disclosed in the 2001 and 2002 proxy materials.

The defendants' efforts to explain away the omitted information by
pointing to additional information that softens or mitigates the impact of the
omission merely reinforces the conclusion that the Fund stockholders should have
been given the chance to decide for themselves how things looked. The
possibility that, with the benefit of complete disclosure, the stockholders
would have allowed these men to run unopposed for election can hardly justify
the omission of any information at all.

In the end, the defendants cannot escape the conclusion that they should
have presented their explanations about the various relationship s in the proxy
statements in which they solicited votes for the election of directors at the
2001 and 2002 Annual Meetings. They were free to explain why they believed that
the eVineyard relationships did not have the potential to impair the
independence of either Gerhard or Hughes as directors of the Fund. Had they done
so, the stockholders would have been able to

-------------------
(19) Rosenblatt, 493 A.2d at 944.

(20) Arnold, 650 A.2d at 1:277.

decide for themselves what significance to attribute to such facts and the
accompanying explanations."(21) What defendants were not free to do was to take
the position that the stockholders had no right to know this information because
they, the defendants, had determined it was not important.(22)

IV.

In view of the court's conclusion that the election of directors at both
the 2001 and 2002 Annual Meetings was procured by the use of materially false
and misleading proxy materials, the appropriate remedy is to order new elections
to fill the three director seats that were up for election at those
meetings.(23) The record reflects that, if Millenco had been furnished with the
omitted information in 2001 or 2002, it would have acted to oppose the
elections. The courts of this state "have long held thatinequitable conduct by
directors thatinterferes with a fair voting process may be set aside in
equity."(24) Moreover, the "right of shareholders to participate in the voting
process includes the right to nominate an opposing slate.(25)

The only remaining issue is whether to order a new election in advance of
the 2003 annual meeting of stockholders. The answer to that question will turn
on when that meeting is or will be scheduled to be held. If the court receives
assurances that such a meeting will be held within 60 days of the date of this
opinion, the court will be inclined to the view that only a single meeting needs
to be conducted. If not, the court will order the convening of a special meeting
no later than February 15, 2003 for the purpose of electing 3 directors.

For the foregoing reasons, Millenco's motion for summary judgment is
GRANTED, and the defendants' cross-motion for summary judgment is DENIED.
Counsel for Millenco shall submit an order in conformity with this opinion no
later than December 30, 2002, on notice.

s/ Stephen P. Lamb
Vice Chancellor

-------------------
(21) Zirn, 621 A.2d at 779 (materiality standard "does not contemplate the
subjective views of the directors, nor does it require that the
information be of such import that its revelation would cause an investor
to change his vote").

(22) In addition, the court notes that the defendants never discussed or
considered whether disclosure of the omitted information was necessary.
Surprisingly, the record shows that neither the Fund nor its counsel even
distributed the normal questionnaires to officers and directors in order
to ascertain the extent of each respondent's relationships with other
directors, the Fund, its advisers or their affiliates.

(23) Bertoglio v. Texas International Co., 488 F. Supp. 630 (D. Del,, 1980);
Goldstein v. Lincoln Nat'l Convertible Securities Fund, Inc., 140 F.
Supp. 424, 446 (P31.D. Pa. 2001).

(24) Linton v. Everett, 1997 WL 441189 at *9 (Del. Ch. July 31, 1997).

(25) Id. (also noting that " [t]o set aside the election results on the basis
of inequitable manipulation of the corporate machinery, it is not
required that scienter, i.e., actual subjective intent to impede the
voting process be shown").

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