It is intended that this document may be of use to you when you are writing suitability letters. Please note that this document does not contain a comprehensive review of the risks of the product. The information in this document and its format are for demonstration purposes only. This document's headings and layout are for example only and should not be taken as a definitive example for the form and content of your suitability letters. You have sole responsibility for ensuring your letter is appropriate and tailored for each client ensuring that their financial needs and requirements, their individual circumstances and their risk tolerance are all considered. You also have sole responsibility for ensuring your letter meets regulatory requirements. Livingbridge VC LLP and RAM Capital Partners LLP ("RAM") accepts no responsibility for your use of this information which is provided at your own risk.

"Reasons Why" / Suitability Letter for investing in Baronsmead Venture Trust plc (“BVT”) and BaronsmeadSecond Trust plc(“BSVT”) (“the Companies and each “a Company”)

Offer for Subscription to raise in aggregate up to £45million before issue costs (“the Offer”) plus over allotment facilities to raise up to a further £15 million

The Companiesareseeking to raise up to a maximum of £60million in total, before issue costs, pursuant to the Offers.

Experienced Investment Manager

Livingbridge VC LLP (“Livingbridge” or “the Manager”) is the Company’s investment manager. Livingbridge and its related predecessor businesses havemanaged the Baronsmead VCTs since their inception in 1995. As at 31August 2017, the combined net asset value of the Companies was approximately £345 million. Livingbridge and Livingbridge EP LLP have offices in in the UK in London, Birmingham and Manchester and as at 29 September 2017 had a totalof 82 members and employees, 48 being engaged in finding, investing in and managing investments onbehalf of its VCT and institutional clients. As at 31 August 2017, Livingbridge VC LLP, Livingbridge EPLLP and Livingbridge Enterprise LLP managed approximately £1.7 billion in aggregate on behalf oftheir respective institutional clients.

Established Companies with an Invested Portfolio

BVT was launched in 1998 and had an unaudited Net Asset Value of 91.49 pence as at 31 August 2017.As at 29 September 2017, BVT had direct investments in 20 unquoted companies and 54 quotedcompanies. BSVT was launched in 2001 and had an unaudited Net Asset Value of 93.86 pence as at31 August 2017. As at 29 September 2017, BSVT had direct investments in 20 unquoted companies and52 quoted companies.A summary of the Companies’ unaudited investment portfolios as at 29 September 2017, is shown in the following table.

Number of directly held portfolio companies / Percentage of net assets in asset class
Investments in unquoted companies / Investments in quoted companies / Collective investment vehicles / Liquid assets
BVT / 74 / 32 / 44 / 15 / 9
BSVT / 72 / 33 / 47 / 12 / 8

Track Record

Since BVT was launched in 1998, BVT has paid an average annual dividend of 7.4 pence per BVT Share.Over the last five years BVT has paid an average annual dividend of 11.0 pence per BVT Share.Since BSVT was launched in 2001, BSVT has paid an average annual dividend of 7.4 pence per BSVTShare. Over the last five years BSVT has paid an average annual dividend of 11.9 pence per BSVT Share.

A summary of the track record of the Companies since launch and in the last five years is set out in thetable below.

NAV* £m / Average annual dividends paid per Share since launch (p) / Unaudited NAV total return per Share since launch* (p) / Average annual dividends paid per Sharein last five years* (p) / Unaudited NAV total return per Share in last five years* (p)
BVT / 158.5 / 7.4 / 394.69 / 11.0 / 158.88
BSVT / 186.0 / 7.4 / 311.04 / 11.9 / 152.03

* As at 31 August 201. Note: AIC methodology: NAV total return to the investor, including the original amount invested (rebased to 100p) from launch, assuming dividends paid were reinvested at the NAV of the Company at the time the shares were quoted ex-dividend.

The past performance of the Companies is not a reliable indicator of the future performance. The datain the tables above relates principally to periods prior to November 2015 when the UK Governmentamended the VCT rules to restrict the types of investments that VCTs could make. The market for stockin smaller unquoted and quoted companies is often less liquid than that for larger companies, bringingwith it potential difficulties in acquiring, valuing and disposing of such investments.

Regular dividends

Both Boards have sought to maintain a regular flow of dividends to Shareholders over time, asillustrated in the table below. They have done so through the retention of some of the profits realisedfrom the sale of investments for the payment of future dividends, where it has been possible andappropriate to do so. Each Board intends to continue this strategy in the future where appropriate, atthe sole discretion of the relevant Board, should it consider it to be in the best interests of Shareholdersand subject to the legal and regulatory requirements at the time. There is no certainty that anydividends will be paid.

Dividends paid in the previous five financial years (pence per Share)
2012 / 2013 / 2014 / 2015 / 2016 / Average
BVT / 7.5 / 9.5 / 12.5 / 6.5 / 18.5 / 10.9
BSVT / 7.5 / 7.5 / 17.0 / 7.5 / 17.0 / 11.3

Share Buy Back Policy

Each of the Companies will buy back its Shares if, in the opinion of the relevant Board, a repurchase ofShares would be in the best interests of Shareholders as a whole. Each of the Companies will seek tobuy back its Shares at a 5 per cent. discount to net asset value. Any purchases of Shares will be madesubject to the Listing Rules of the UK Listing Authority, other statutory and regulatory restrictions and will be made within the guidelines established from time to time by the relevant Board. There can beno guarantee that the Companies will be able to maintain their share buy back policies and future sharebuy backs, if any, will depend on market circumstances at the time.

Annual Running Costs

Annual running costs, including the Investment Manager’s fees, Directors’ fees, professional fees andthe costs incurred by the Companies in the ordinary course of business (but excluding any performancefees payable to the Investment Manager and irrecoverable VAT), are capped at 3.5 per cent. of therelevant Company’s net assets, any excess being met by the Investment Manager by way of a reductionin future management fees.

Under the BVT Investment Management Agreement, the Investment Manager receives a fee of 2.0 percent. per annum of the net assets of BVT. In addition, the Investment Manager is responsible forproviding all secretarial, administrative and accounting services to BVT. Under the BVT Investment Management Agreement the Investment Manager is also entitled to receive a performance related fee. No performance fee is payable to the Investment Manager until the totalreturn on shareholders’ funds exceeds an annual threshold of the higher of 4 per cent. or base rate plus2 per cent. calculated on a compound basis. To the extent that the total return exceeds the thresholdover the relevant period then a performance fee of 10 per cent. of the excess will be paid to theInvestment Manager.It is expected that BVT will pay a performance fee for the 12-month period to 30 September 2017.

Under the BSVT Investment Management Agreement, the Investment Manager receives a fee of 2.5 percent per annum of the net assets of BSVT. In addition, the Investment Manager is responsible forproviding all secretarial, administrative and accounting services to BSVT.Under the BSVT Investment Management Agreement the Investment Manager is also entitled to receive a performance related fee. A performance fee is payable to the Investment Manager when thetotal return on net proceeds of the BSVT Shares exceeds 8 per cent. per annum (simple). To the extentthat the total return exceeds the threshold over the relevant period then a performance fee of 10 percent. of the excess will be paid to the Investment Manager.It is not expected that BSVT will pay a performance fee for the 12-month period to 30 September 2017.

Cost of the Offer

The cost of the Offer is capped at 3.0% of the gross proceeds of the Offer.

Subscribers must subscribe a minimum of £3,000 per elected Offer and thereafter in multiples of £1,000 per elected Offer.

The Offers will be open exclusively to satisfy subscriptions from Existing Shareholders until the closeof business on 16 October 2017 and will then be open to all investors. Subscriptions will be processedon a “first come, first served” basis.

If you would like to receive a copy of the Offer Document please call RAM on 020 3006 7530

IMPORTANT NOTICEThis document is an exempt financial promotion issued by Livingbridge VC LLPIt is not a prospectus and should be regarded merely as an advertisement. Its content has not been approved by any person authorised and regulated under the Financial Services and Markets Act 2000. It is an exempt financial promotion for the purposes of s 21 of that Act by reason of its being a promotion made only to investment professionals, as defined in accordance with article 19 of that Order. Persons who are not investment professionals should place no reliance on this document for any purposes. This document is neither an offer of subscription for shares in the VCTs nor a solicitation to any person to make such an offer. Information in this document is not warranted by the Company or any of its professional advisers or affiliates to be correct or complete, and any such information is subject to change at any time. An Offer for Subscription relating to the offer of shares has been published by the Company, and reliance should only be placed on such Offer when subscribing for any such shares. The Offerdocument is available from RAM by telephone, 020 3006 7530, or by download from . RAM is a Limited Liability Partnership registered in England and Wales with registration no. OC329154 and whose registered office address is RAM Capital Partners LLP, 4 Staple Inn, London, WC1V 7QH. RAM is authorised and regulated by the Financial Conduct Authority and is acting for the Company’s investment manager, Livingbridge, and no other persons, and accepts no obligations to treat any other persons as its clients for the purposes of the Rules of the Financial Conduct Authority