1. Gladstone Investment Corporation
Quarterly Overview
for the period ended June 30, 2012

2. Legal Disclaimer
This presentation may include forward-looking statements. These forward-looking
statements include comments with respect to our objectives and strategies, and the results
of our operations and our business.
However, by their nature, these forward-looking statements involve numerous assumptions,
uncertainties and opportunities, both general and specific. The risk exists that these
statements may not be fulfilled. We caution readers of this presentation not to place undue
reliance on these forward-looking statements as a number of factors could cause future
company results to differ materially from these statements.
Forward-looking statements may be influenced in particular by factors such as fluctuations
in interest rates and stock indices, the effects of competition in the areas in which we
operate, and changes in economic, political, regulatory and technological conditions. We
caution that the foregoing list is not exhaustive.
When relying on forward-looking statements to make decisions, investors should carefully
consider the aforementioned factors as well as other uncertainties and events.
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3. Overview
• Gladstone Investment Corporation
• Business Development Company (BDC) with publicly traded common and preferred stock
• Common stock (NASDAQ: GAIN)
• Preferred stock (NASDAQ: GAINP)
• Managed by Gladstone Management Corporation, an investment adviser registered with the SEC
that manages more than a billion dollars of assets
• One of a family of funds known as The Gladstone Companies (www.gladstone.com)
• Focused on investing in subordinated debt, preferred stock, and common stock or warrants to
purchase common stock in buyouts of private U.S. businesses
• Went public in 2005 and has never missed paying a monthly dividend
• Current common stock dividend is $0.60 per share (per year), paid monthly at $0.05 per share
• Paid $0.03 bonus dividend per common share in March 2012
• First preferred stock dividend was paid in March 2012. The annual rate is 7.125% or $0.1484
per month per share
• Current Portfolio
• Over $230 million at fair value in total investments as of June 30, 2012
• Invested in 18 companies, 13 states, 13 industries as of June 30, 2012
Disclaimer: Past performance is not an indication of future performance
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4. What is Gladstone Investment?
• Gladstone Investment Corporation is a publicly traded business
development company (BDC) that invests in debt and equity
securities consisting primarily of subordinated loans, mezzanine debt,
preferred equity, and common stock or warrants to purchase common
stock in small and medium-sized U.S. businesses in connection with
buyouts and other recapitalizations.
• The company seeks to:
• Lend to and invest in companies with proven cash flows and
successful track records led by great managers
• Generate current income to pay monthly dividends to stockholders
• Achieve capital gains from the sale of appreciated equity
securities
• Gladstone Investment is operated by an experienced management
team, as discussed in the following slides
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5. Experienced Management Team
David Gladstone, Chairman & CEO
• Over 25 years of experience investing in mid-sized and small private
businesses
• Current Chairman and CEO of all three Gladstone funds, these are
public companies numbers 7, 8, and 9 in his career
• Past Chairman of Allied Capital and American Capital
• MBA from Harvard Business School; MA from American University;
BA from University of Virginia
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6. Experienced Management Team
Terry Brubaker, COO Chip Stelljes, CIO David Dullum, President
• More than 25 years experience in • More than 25 years experience in • More than 25 years experience in
managing businesses portfolio investing portfolio investing
• Currently COO and head of all • Currently CIO and head of all • Currently head of Gladstone
portfolio management for all three investing for all Gladstone public Investment and seeking mezzanine
Gladstone public funds funds, reviewing hundreds of and buyout opportunities
• Previously on the acquisition team opportunities and supervising the • Experienced in investing, due
of James River Corp., as it grew due diligence process on each new diligence, reviewing hundreds of
from $200 million to $7 billion in investment new opportunities and reviewing
revenues • Past EVP at Allied Capital, each new investment
• Group VP of two operating making loans and investments in • Past partner of New England
divisions at James River with middle market companies Partners, a small buyout fund
2,300 employees, $440 million in • Past manager of Camden Partners located in Boston and Washington,
revenue and 14 locations and Columbia Capital funds, DC
• After James River, was CEO of investing in communications, • Past partner of Frontenac
two businesses with 800 healthcare and business services Company for over 14 years in
employees, $250 million in • MBA from University of Virginia Chicago, investing in many mid-
revenue and 4 locations Business School; BA Degree in market businesses in the Midwest
• Former consultant with McKinsey Economics from Vanderbilt • MBA from Stanford; BS in
& Company University Engineering from Georgia Tech
• MBA from Harvard Business
School; BSE in Aeronautical
Engineering from Princeton
University
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7. Experienced Management Team
David Gladstone Terry Brubaker Chip Stelljes David Dullum Bob Cutlip
Chairman & CEO Chief Operating Officer Chief Investment Officer President Sr. Managing Director
25+ Years Experience 25+ Years Experience 25+ Years Experience 25+ Years Experience 25+ Years Experience
Managing Directors and Directors*
Buzz Cooper Lud Kimbrough John Sateri Greg Bowie Blair Gertmenian
25+ Years Experience 25+ Years Experience 23 Years Experience 10 Years Experience 10 Years Experience
Chris Massey John Freal Jennifer Simpson M. Kipp Kranbuhl Erika Highland
19 Years Experience 25+ Years Experience 12 Years Experience 14 Years Experience 11 Years Experience
Bob Pierce David Meier Chris Daniel Chris Lee Kyle Largent
25+ Years Experience 25+ Years Experience 20 Years Experience 11 Years Experience 10 Years Experience
Laura Gladstone Matt Tucker Michael Beckett
12 Years Experience 13 Years Experience 17 Years Experience
Over 20 professionals concentrating on sourcing, due diligence and portfolio management and 15 professionals in reporting
*Directors noted here are not members of the funds’ boards of directors, rather, these are junior Managing Director positions of the Adviser
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8. Target Market
Why we target companies in the lower middle market
Smaller companies typically offer a more compelling investment profile
than larger ones because of:
 Lower purchase price multiples
 Lower debt multiples
 More protective covenants for lenders
 Meaningful equity co-investment and likely multiple expansion upon exit
 Small businesses are often less complicated
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9. Examples of Investments Made in Private Businesses
• Small manufacturer of a product or a service business needs
money to grow
• Banks will make short-term loans if the business has collateral
and solid cash flow
• The business gets from us:
– Management expertise,
– A long-term loan, but at a higher interest rate, and
– Additional capital in the form of an equity co-investment
• We typically get:
– An attractive long-term loan that pays monthly interest that we can
pass on as monthly dividends to our shareholders,
– Board seats and an ownership stake in the company through our
equity investment, and
– Potential for accrued dividend payouts on our preferred equity, as
well as capital appreciation of our common stock upon an exit
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10. Examples of Areas Where We Invest
• Light manufacturing
• Manufacturing of small products
• Specialty manufacturing
• Custom and precision manufacturing
• Chemicals, plastics and rubber manufacturing
• Packaging and specialty items
• Business services
• Service companies with logistic services
• Consumer products
• Specialty items
• Leisure and entertainment
• Equipment and products
• Distribution and transportation
• Storage and transportation of parts
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11. Industries We Avoid
• Housing or Home Mortgage
• Auto Manufacturing & Tier One Suppliers
– However, we have one investment, Auto Safety House,
that is in the business of selling and servicing school
busses and school bus parts.
• Banks & Financial Institutions
• High-tech Companies or Early Stage Start-ups
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12. Typical Investment Structure
Senior & Junior Debt Preferred & Common Stock
(80%) (20%)
 Senior-variable rates with current pay of 8-  Options to own Common Stock
10%  Preferred stock
 Subordinated-variable with a floor and  Dividend paid or accrued at 6% to
fixed rates with current pay of 12-15% 8% per year
 5-year term with interest only paid  5 year term
 1st and 2nd Lien: some collateral and  Common stock or warrants to purchase
reasonable cash flow coverage common stock
 Strong inter-creditor agreement that avoid  Usually accompanied by options that
blockage of interest payments provide an exit from common stock
 Reasonable leverage ratios and attractive  Expected gross return is 25% to 30%
terms
 Options or success fees to enhance the
return
 Expected gross return is 18% to 20%,
depending on risk profile
Disclaimer: Past performance is not an indication of future performance
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13. Track Record
• Common Stock traded on NASDAQ (GAIN)
– Paying $0.05 per share per month, or $0.60 per share per year
– Paid bonus dividend of $0.03 per share in March 2012
• Preferred Stock traded on NASDAQ (GAINP)
– Paying $0.1484 per share per month, or $1.78 per share per year
• Conservative balance sheet:
– Debt to equity ratio of 0.4 to 1.0 as of June 30, 2012, net of short-term
borrowings
– $31 million borrowed on $60 million line of credit
• Invested in 18 companies as of June 30, 2012
• At June 30, 2012, had two investments in default, representing
2.0% of our investment portfolio at fair value
Disclaimer: Past performance is not an indication of future performance
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14. Portfolio Diversification as of June 30, 2012
Gladstone Investment: By Industry at fair value
Chemicals, Plastics and Rubber - 20.5%
Machinery (Non-Agriculture, Non-Construction and Non-Electronic) - 14.2%
Leisure, Amusement, Motion Pictures, Entertainment - 13.3%
Diversified/Conglomerate Manufacturing - 11.1%
Containers, Packaging and Glass - 10.8%
Electronics - 9.6%
Beverage, Food and Tobacco - 4.1%
Buildings and Real Estate - 3.9%
Oil and Gas - 3.8%
Cargo Transport -3.8%
Automobile
Aerospace and Defense - 1.5%
Home and Office Furnishings - 1.4%
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15. Geographic Diversification as of June 30, 2012
We have outstanding investments to businesses in states highlighted in blue
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16. Historical Net Investment Income
Net Investment Income Total Amount Amount Per
FYE March 31: (in millions) Common Share
2006 $5.9 $0.36
2007 $11.1 $0.67
2008 $13.1 $0.79
2009 $13.4 $0.62
2010 $10.6 $0.48
2011 $16.2 $0.73
2012 $13.7 $0.62
2013* $13.0 $0.59
*Annualized based on 3 months operating results
Disclaimer: Past performance is not an indication of future performance
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17. Gladstone Statistics vs. Public Market BDCs
GAIN BDC Median
Price/NAV 0.82x 0.99x
Debt/Equity 35.3%(1) 53.6%
Dividend Yield 8.0% 9.7%
Market Cap $165 $305
(1) Excludes short-term borrowings.
Source: Raymond James BDC Industry Weekly Newsletter, August 3, 2012
Disclaimer: Past performance is not an indication of future performance
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18. We are a Shareholder Focused Company
• Maintain the monthly distribution and grow that distribution
when earnings increase
• Emphasis on stability of income first and growth in income
second
• Maintain liquidity so shareholder may buy or sell the stock in
the market
• Quarterly published reports and quarterly calls to shareholders
• Robust informational website (www.gladstoneinvestment.com)
and notifications by e-mail to those who sign up
• Shareholder dividend reinvestment plan for common stock
• Audited by PricewaterhouseCoopers LLP
• Investor Relations Hotline: (866) 366-5745
• Adviser with strong reputation (www.gladstone.com)
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19. Highlights
• Experienced Management Team: Operating team with a successful
track record underwriting private businesses
• Successful CEO: Has a “brand name” reputation demonstrated by the
success of nine public companies
• Business Model: Emphasis on deal flow from a proprietary
originations network and strategic relationships with LBO funds
• Market Opportunity: Right time in the business cycle to take
advantage of the lack of funding for businesses
• Conservative Underwriting: Focused on the cash flow of the small
value-oriented businesses
• Focused on Interest Income Plus Capital Gains: Interest payments
on our loans allow us to pay dividends to our shareholders and capital
gains are extra
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20. Why Own GAIN Stock
• Common stock current yield of 8.0% at August 15, 2012
• Preferred stock current yield of 7.0% at August 15, 2012
• 85 straight monthly distributions since its IPO as of August 1, 2012
plus a bonus one-time dividend paid in March 2012
• Potential for significant appreciation or capital gain distributions from
equity investments
• Diversification of borrowers in various states and various industries to
protect the dividend
• Investing in small- and mid-sized U.S. businesses with steady cash
flows and good growth prospects
• Liquidity for investors – common and preferred stocks are listed on
NASDAQ (GAIN & GAINP)
Disclaimer: Past performance is not an indication of future performance
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21. Other Information
• Website for Gladstone Investment
• www.gladstoneinvestment.com
• Contains much more information about our company
and the companies in our portfolio
• Website for our investment adviser
• www.gladstonemanagement.com
• Information on all funds managed by the company’s
investment adviser
• www.gladstone.com
• Common stock traded on NASDAQ (GAIN)
• Preferred stock traded on NASDAQ (GAINP)
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