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October 20, 2009



State Pension Fund is Key Investor in
Rockland Online Textbook Company

Company Estimates Its Products Will Save NY Students $17M Over 5 Years

State Comptroller Thomas P. DiNapoli today visited Flat World Knowledge, a low-cost provider of alternatives to traditional high-priced college textbooks, located in Rockland County. The New York State Common Retirement Fund was part of a $4 million investment in the company with Greenhill SAVP, High Peaks Venture Partners and Valhalla Partners earlier this year.

“Flat World Knowledge is a perfect example of how we can do well for the members of the Retirement System while doing good for New York businesses and college students,” DiNapoli said. “Flat World Knowledge is transforming the model for how college students purchase their textbooks by offering a low-cost alternative to the expensive, traditional textbooks found in college bookstores.”

As part of its In-state Private Equity Program, the Fund invested $870,000 through its investment partners Greenhill SAVP and High Peaks. Including the Fund’s share, Greenhill’s total investment was $1.25 million and High Peaks total investment was $750,000. Valhalla Partners also invested $2 million, which brings the total amount of capital to $4 million.

The infusion of capital allowed Flat World Knowledge to expand its marketing, fueling the company’s customer growth from 30 colleges and universities utilizing products in the spring 2009 semester to 480 colleges and universities in the fall 2009 semester. Eighteen higher education institutions in New York state use the company’s products.

“We’re thrilled to receive the Common Retirement Fund’s investment through our venture capital partners,” said Jeff Shelstad, co-founder and CEO of Flat World Knowledge. “The investment has allowed us to dramatically escalate growth, which will hopefully lead to a strong return to the Fund over time. We’ve added jobs in New York state and are saving New York state students and their families substantial money on college textbooks. It really is a win for everybody.”

Through Flat World Knowledge’s website, www.flatworldknowledge.com, students can access their college textbooks online at no charge or purchase the material in a variety of formats including print-on-demand, audio, downloadable and soft cover.

Flat World Knowledge estimates that students spend on average 80 percent less on Flat World Knowledge’s textbooks than traditional textbooks. Last year DiNapoli’s office released a report on textbook pricing that found undergraduate students can spend up to $4,000 on textbooks over four years. In the first five years of business, the company believes the savings nationwide could grow to $205 million with $17 million in savings for New York’s students.

“The college textbook publishing market is poised to undergo a transformation similar to what the music and newspaper industries experienced,” Brian Hirsch, Managing Director of Greenhill SAVP said. “College students will be able to consume and interact with educational content anywhere, anytime and anyway. Flat World has created the best model to lead the $8 billion industry’s transformation and we are pleased that the NYS Common Retirement Fund recognizes this.”

“The college textbook publishing market is beginning to undergo the sort of radical disruption that the web brought to newspaper, music and other content industries,” Brad Svrluga, Managing Director of High Peaks Venture Partners said. “Flat World Knowledge is leading the textbook industry’s transformation with a product that is flexible, affordable, open and suited to the media consumption habits of today’s students.”

Flat World Knowledge’s textbooks are written by subject-matter experts and are then peer reviewed and professionally edited. The books are available online, free of charge, to educators and students. Educators can use the books as is or reorganize and edit them to suit their courses’ needs. The company’s product model provides educators with control over the content by giving them the ability to modify the company’s books. Company officials performed a demonstration of how their product works for DiNapoli.

Through the In-state Private Equity Program, the Fund invests with private equity managers who seek to invest in companies in New York state that require capital for growth. The program, created in 1999, targets investment of state funds in the New York state economy. The program is designed to provide investment returns consistent with the risk of private equity while also expanding the availability of capital for New York businesses. The program aims to help generate jobs and private sector investment in the state.

Since 2000, $431.5 million has been invested in 137 companies through the In-state Private Equity Program. The Fund has achieved a 30 percent rate of return on the investments it has exited. DiNapoli added $478 million to the program since he took office in 2007, bringing the total amount committed to the program to $931 million. DiNapoli recently held events across the state to spread the word that the Fund has approximately $528 million available to invest in New York-based companies. To learn more about the Program, visit: http://www.osc.state.ny.us/pension/instate/index.htm.

About the Common Retirement Fund
The New York State Common Retirement Fund is the third largest public pension plan in the United States with more than one million members, retirees and beneficiaries from state and local governments. The Fund has a diversified portfolio of public and private equities, fixed income, real estate and alternative instruments.

About Greenhill SAVP
With over $100 million under management, Greenhill SAVP makes early stage venture investments in technology-enabled services and business information services companies. Greenhill SAVP is an affiliate of Greenhill & Co. Inc. (NYSE:GHL), an independent global investment banking firm with offices in New York, London, Frankfurt, Toronto, Tokyo, San Francisco, Dallas and Chicago.

Greenhill SAVP leverages its deep domain expertise, a proven investment track-record, and a global corporate network to create significant portfolio value. For more information about Greenhill SAVP, please visit www.gsavp.com.

About High Peaks Venture Partners
High Peaks Venture Partners is a venture capital firm focused on investments in market-leading, early-stage technology companies. High Peaks closed its inaugural fund in 2004 and is actively investing in New York City and throughout upstate New York, focusing primarily on companies in the digital media, internet-enabled business services, telecomm, advanced materials, and medical technology markets. High Peaks is one of 15 affiliates of Village Ventures, a nationwide network of regionally focused, early-stage venture capital funds.

New York State Institutions Using Flat World Knowledge:

1. Adelphi University

2. Borough of Manhattan CC

3. Consortium of the Niagara Frontier

4. Cornell University

5. Dominican College

6. Empire State College

7. Highland High School

8. Long Island University, CW Post

9. Marymount Manhattan College

10. Mercy College

11. Niagara University

12. Rensselaer Polytechnic Institute

13. Rochester Institute of Technology

14. Rockland Community College

15. State University of New York at Fredonia

16. State University of New York at New Paltz

17. Stern College for Women, Yeshiva University

18. Suffolk County Community College

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