GrowthWorks Provides Evidence of VenGrowth Funds' Tainted Solicitation Process

TORONTO, ONTARIO--(Marketwire - Aug. 20, 2011) - On August 17, 2011, GrowthWorks Canadian Fund Ltd. ("GrowthWorks") raised serious concerns about coercive and misleading statements being made by the VenGrowth Funds' proxy solicitation agent, Georgeson, in connection with the VenGrowth Funds Board's latest proposal (the "Second Covington Proposal") to merge the VenGrowth Funds into Covington Fund II Inc. ("Covington").

GrowthWorks filed a formal complaint with the Ontario Securities Commission ("OSC"), supported by clear evidence, regarding the misrepresentations being made by Georgeson to coerce shareholders of the three VenGrowth Funds that have suspended share redemptions to vote in favour of the Second Covington Proposal by telling those shareholders that they cannot participate in the discounted redemption opportunity on closing of the proposal (the "Early Redemption Option") unless they vote in favour of the proposal. GrowthWorks has asked the OSC to take immediate action to protect the interests of Class A shareholders of the VenGrowth Funds ("VenGrowth Shareholders").

Yesterday afternoon, the VenGrowth Funds issued a press release claiming that their "investigation uncovered no evidence that supports GrowthWorks' allegations of coercive tactics." GrowthWorks urges VenGrowth Shareholders to decide for themselves whether this is the case by listening to the attached audio files, which have been filed with the OSC.

http://www.growthworks.ca/vgemail/audiofile1.mp3

http://www.growthworks.ca/vgemail/audiofile2.mp3

These audio files are recordings of separate conversations between a Georgeson agent and VenGrowth Shareholders and provide clear evidence of the Georgeson agent telling those VenGrowth Shareholders that they must vote in favour of the Second Covington Proposal in order to have their request for the Early Redemption Option honoured. GrowthWorks is not aware of any calls involving Georgeson in which the right of redemption of shareholders voting against the Second Covington Proposal has been accurately described. Please note that personal information of the Georgeson agent and the VenGrowth Shareholders has been removed in order to protect their identities. Discussion on one of the recordings regarding voting procedures has also been omitted. A copy of the full recording (excluding personal information) may be obtained from GrowthWorks by calling 1-800-268-8244.

"We have received other correspondence from shareholders and advisors letting us know that they, or their clients, have had a similar experience with Georgeson", said David Levi, CEO of GrowthWorks. "We have no way of knowing how many VenGrowth Fund shareholders have had similar experiences and how many other VenGrowth Fund shareholders and investment advisors may have received that information second hand and relied on it. As a result, we believe the VenGrowth Funds, through Georgeson, have fundamentally tainted their entire solicitation process. The VenGrowth Funds were previously provided with these recordings and have now publicly stated that they found no evidence of coercive tactics. The recordings clearly show this statement is not credible. That is why we are releasing this evidence to the public. Unfortunately, this is yet more of the kind of shocking conduct we have seen in the past from the VenGrowth Funds. It's now in the hands of the OSC whose job it is to protect public shareholders."

GrowthWorks is urging all VenGrowth Fund shareholders and investment advisors who have had similar experiences with Georgeson to share those experiences by emailing vengrowthcoercion@growthworks.ca or calling GrowthWorks at 1-800-268-8244. By sharing your experience, you will be consenting to GrowthWorks releasing your information to the OSC in support of its complaint.

David Levi continued, "We urge VenGrowth Fund shareholders to help us put an end to this kind of behaviour. If you have already voted in favour of the Covington proposal, we ask you to reconsider your vote because a vote in favour of the Covington proposal is a vote condoning this kind of unfair and unacceptable conduct."

On July 26, 2011, GrowthWorks announced an improved proposal for merging the five VenGrowth Funds into GrowthWorks (the "GrowthWorks Proposal"). GrowthWorks believes that VenGrowth Shareholders should be given the option to choose who will manage their investment going forward and that the GrowthWorks Proposal is superior to the Second Covington Proposal in a number of key areas, including:

• Better redemption options
  
  
• Lower estimated MER
  
  
• A larger, more diversified venture portfolio
  
  
• Faster return of cash via "Advantage" Dividends
  
  
• A more experienced manager, and
  
  
• A better deal on the manager's carried interest or "IPA".

See the comparison table and accompanying notes on pages 11 – 13 of the GrowthWorks' dissident proxy circular dated July 26, 2011 (the "GrowthWorks Circular").

The terms of the GrowthWorks Proposal are set out in detail in GrowthWorks Circular, as filed on the SEDAR (www.sedar.com) and GrowthWorks websites (www.growthworks.ca). At meetings scheduled for August 25, 2011, VenGrowth Fund shareholders will vote on the Second Covington Proposal. GrowthWorks is soliciting proxies from Class A shareholders of the VenGrowth Funds to VOTE AGAINST the Second Covington Proposal. If the Second Covington Proposal is voted down, GrowthWorks intends to take steps to requisition meetings of VenGrowth Fund shareholders to vote on the GrowthWorks Proposal.

A COPY OF THE GROWTHWORKS CIRCULAR HAS BEEN FILED AND IS AVAILABLE ON THE SEDAR WEBSITE AT www.sedar.com, TOGETHER WITH THE FORM OF PROXY BEING SOLICITED BY GROWTHWORKS. THE GROWTHWORKS CIRCULAR MAY ALSO BE ACCESSED AT www.growthworks.ca AND BY CALLING GROWTHWORKS AT 1-800-268-8244. VENGROWTH SHAREHOLDERS ARE ENCOURAGED TO READ THE GROWTHWORKS AND VENGROWTH CIRCULARS AND TO CONSULT WITH THEIR INVESTMENT ADVISORS ABOUT THE GROWTHWORKS AND COVINGTON MERGER PROPOSALS.

As disclosed in the GrowthWorks Circular, the GrowthWorks Proposal is subject to a number of conditions, including the Second Covington Proposal being voted down at the VenGrowth Fund shareholder meetings called for August 25, 2011 and the need to secure shareholder, regulatory, tax and court approvals for the merger of the VenGrowth Funds into GrowthWorks. There can be no assurance that all of these conditions will be satisfied or that the GrowthWorks Proposal will be completed on the terms proposed or at all. In addition, the completion of the GrowthWorks Proposal is subject to a number of risks.

Certain statements in this press release are forward-looking statements which are based on beliefs and assumptions of management of GrowthWorks as at the date of this press release and subject to known and unknown risks and uncertainties that may cause actual results to be materially different from future results expressed or implied by such forward-looking statements. Forward-looking statements include statements related to the payment of dividends to former VG Shareholders, statements related to the expected MER of the VG Merger Shares, and statements related to other expected benefits associated with the GrowthWorks Proposal. These statements are based on a number of beliefs and assumptions, including with respect to economic and market conditions, levels of sales and redemptions of GrowthWorks Class A shares, levels of expenses incurred in operating GrowthWorks, levels and pace of investment and divestment activity within GrowthWorks' venture investment portfolio, value of investments and the ability of GrowthWorks to generate gains from which to pay dividends on the VG Merger Shares. These beliefs and assumptions are subject to risks and uncertainties, including risks and uncertainties associated with or affecting: forecasting general economic and business conditions and, in turn, the climate for investment and divestment activity; performance and value of portfolio companies; the ability of portfolio companies to secure needed financing; the ability of GrowthWorks to make follow-on investments in portfolio companies and complete divestments; market fluctuations and other factors affecting levels of redemptions of GrowthWorks Class A shares; the costs of operating GrowthWorks Canadian Fund and the risks disclosed in the GrowthWorks Circular, including Appendix A to the GrowthWorks Circular. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Neither GrowthWorks nor its manager assumes any obligation to update any forward-looking statements.

The content of this press release is qualified in its entirety by, and should be read in conjunction with, the more detailed disclosure set out in the GrowthWorks Circular. Statements in this press release are based in part on publicly available information published by third parties. GrowthWorks has no reason to believe such information is inaccurate, however neither GrowthWorks nor its manager has taken steps to verify the information nor do they assume any responsibility for the accuracy of such information.

Commissions, trailing commissions, management fees and expenses all may be associated with investment fund purchases. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

Information in support of Public Broadcast Solicitation

GrowthWorks Canadian Fund Ltd. ("GrowthWorks Canadian Fund") is relying on an exemption granted by securities regulators to make this public broadcast solicitation of proxies. The following information is provided in accordance with such order and securities laws applicable to public broadcast solicitations.

This solicitation is being made by GrowthWorks Canadian Fund and not by or behalf of the management of The VenGrowth Investment Fund Inc., The VenGrowth II Investment Fund Inc., The VenGrowth III Investment Fund Inc., The VenGrowth Advanced Life Sciences Fund Inc. or The VenGrowth Traditional Industries Fund Inc. (together, the "VenGrowth Funds"). The address of the VenGrowth Funds is 105 Adelaide Street West, Suite 1000, Toronto, Ontario M5H 1P9, Canada.

GrowthWorks Canadian Fund has filed a Dissident Proxy Circular dated July 26, 2011 (the "GrowthWorks Circular") containing detailed information about the GrowthWorks merger proposal (the "GrowthWorks Proposal") which is available on www.growthworks.ca and SEDAR.com. You may call 1-800-268-8244 to request copies of the GrowthWorks Circular and proxy or voting instruction form ("VIF"). There can be no assurance that the GrowthWorks Proposal will be completed on the basis proposed or at all. The GrowthWorks Proposal is subject to a number of conditions including the need to secure shareholder, regulatory and court approvals for the merger, and is also subject to the condition that the proposed sale of assets of each of the VenGrowth Funds to Covington Fund II Inc. (the "Second Covington Proposal") be voted down at the meetings of the shareholders of the VenGrowth Funds called for August 25, 2011 (including any adjournments and postponements of those meetings (the "VenGrowth Meetings"). There can be no assurance that all of these conditions will be satisfied. In addition, the completion of the GrowthWorks Proposal is subject to a number of risks. The GrowthWorks Circular contains a detailed description of the terms and conditions of the GrowthWorks Proposal and the risks to completion of the merger.

Proxies for the VenGrowth Meetings may be solicited by or on behalf of GrowthWorks Canadian Fund by mail, telephone, telecopy, e-mail or other electronic means as well as by newspaper or other media advertising and in person by directors and officers of GrowthWorks Canadian Fund and directors, officers and employees of GrowthWorks WV Management Ltd. (the "Manager), the manager of GrowthWorks Canadian Fund, none of whom will be specifically remunerated therefor. Proxies will be solicited by or on behalf of GrowthWorks Canadian Fund from a VenGrowth Fund shareholder by means other than public broadcast, speech or press release only where a copy of the GrowthWorks Circular and form of proxy or VIF has been sent to such shareholder. GrowthWorks Canadian Fund may engage the services of one or more agents and authorize other persons to assist it in soliciting proxies on behalf of GrowthWorks Canadian Fund and may enlist certain investment advisors with clients that hold VenGrowth Fund shares to distribute the GrowthWorks Circular to their clients. These investment advisors will be offered a fee of $1.00 for each client the investment advisor contacts and sends the GrowthWorks Circular to and will be offered reimbursement for the time spent and expenses incurred in connection with the solicitation. Payment to such investment advisors will not be conditional on whether the client delivers a proxy or VIF for the VenGrowth Meetings or votes against the Second Covington Proposal.

All costs incurred for this solicitation will be borne by the Manager. Similarly, all costs incurred in connection with any solicitation of proxies by GrowthWorks Canadian Fund for any meetings of VenGrowth Fund shareholders requisitioned by GrowthWorks Canadian Fund (the "Requisitioned Meetings") will be borne by the Manager, to the extent not reimbursed by the VenGrowth Funds as required under applicable corporate laws. GrowthWorks Canadian Fund estimates that the total fees and costs paid to soliciting agents in connection with the solicitations will not exceed $75,000. Kingsdale Shareholder Services Inc. has been retained to solicit proxies for a fee of $30,000, plus disbursements. Under a previous engagement with Kingsdale, a success fee of $300,000 is payable to Kingsdale on the successful completion of the GrowthWorks Proposal.

To the knowledge of GrowthWorks Canadian Fund and its Manager, except as described below, none of GrowthWorks Canadian Fund, its officers and employees, the Independent Nominees named in the GrowthWorks Circular or any associate or affiliate or other "informed person" (within the meaning of Canadian securities laws) of GrowthWorks Canadian Fund or the Independent Nominees has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the VenGrowth Meetings or the Requisitioned Meetings or in any other material transaction or proposed transaction of the VenGrowth Funds since the commencement of the funds' most recent fiscal year. David Levi, a director and the President and Chief Executive Officer of GrowthWorks Canadian Fund, is the director and an executive officer and indirect shareholder of the Manager and Clint Matthews, the Chief Financial Officer of GrowthWorks Canadian Fund, is an executive officer and indirect shareholder of the Manager. If the GrowthWorks Proposal is completed, the net asset value ("NAV") of GrowthWorks Canadian Fund will increase, which will increase the NAV-based management and administration fees paid by GrowthWorks Canadian Fund to the Manager.

You may revoke your YELLOW proxy with an instrument in writing (which can be another proxy with a later date) executed by you and delivered to (i) Equity Financial Trust Company. by no later than 5pm on August 22, 2011, (ii) Computershare Investor Services Inc. by no later than 5:00 p.m. (Toronto time) on August 24, 2011 (iii) the registered office of the VenGrowth Funds by no later than 5:00 p.m. (Toronto time) on August 24, 2011 or (iii) the individual chairing the applicable VenGrowth Meeting on the date of the VenGrowth Meeting or any adjournment of the VenGrowth Meeting or in any other manner permitted by law. You may revoke your YELLOW VIF with an instrument in writing (which can be another VIF with a later date) executed by you and delivered to (i) Equity Financial Trust Company by no later than 5pm on August 22, 2011, or to (ii) Computershare Investor Services Inc. by no later than 5:00 p.m. (Toronto time) on August 24, 2011.