Gladstone Investment Corporation provides a quarterly overview of its business development company (BDC). The summary discusses Gladstone's investment strategy of providing debt and equity to small and medium sized private businesses. It highlights the experienced management team, growing portfolio size and interest income, increasing investment yields, and track record of paying monthly dividends from cash earnings. Gladstone seeks to generate stable income through debt investments while also achieving capital gains from equity investments.

1. Gladstone Investment Corporation
Quarterly Overview
for the period ended December 31, 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 including those factors listed
under the caption “Risk Factors” in our 10K and 10Q filings and our registration statement
as filed with the Securities and Exchange Commission, all of which can be found on our
web site at www.GladstoneInvestment.com or the SEC web site, www.SEC.gov.
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)
• 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 per month is 7.125%
or $0.1484 per share
• 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 Portfolio
• Over $273 million at fair value in total investments as of December 31, 2012
• Invested in 21 companies across 15 states and 13 industries as of December 31, 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 senior loans, 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
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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 four Gladstone public funds; these are
public companies #7 - #10 in his career (most recent IPO in January 2013)
• Past Chairman of Allied Capital and American Capital while both were very
profitable
• 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 David Dullum, President
• More than 25 years experience in • More than 25 years experience in
managing businesses portfolio investing
• Currently COO and head of portfolio • Currently President of Gladstone
management for all four Gladstone public Investment
funds • Experienced in investing, due diligence,
• Previously on the acquisition team of reviewing hundreds of new opportunities
James River Corp., as it grew from $200 and reviewing each new investment
million to $7 billion in revenues • Past partner of New England Partners, a
• Group VP of two operating divisions at small buyout fund located in Boston and
James River with 2,300 employees, $440 Washington, DC
million in revenue and 14 locations • Past partner of Frontenac Company for
• After James River, was CEO of two over 14 years in Chicago, investing in
businesses with 800 employees, $250 many mid-market businesses in the
million in revenue and 4 locations Midwest
• Former consultant with McKinsey & • MBA from Stanford; BS in Engineering
Company 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 David Dullum Bob Cutlip
Chairman, CEO & President Chief Operating Officer President Sr. Managing Director
25+ Years Experience 25+ Years Experience 25+ Years Experience 25+ Years Experience
Managing Directors and Directors^
Lud Kimbrough David Meier Laura Gladstone Greg Bowie Blair Gertmenian
25+ Years Experience 25+ Years Experience 13 Years Experience 11Years Experience 11 Years Experience
John Freal John Sateri Buzz Cooper M. Kipp Kranbuhl Erika Highland
25+ Years Experience 24 Years Experience 25+ Years Experience 15 Years Experience 12 Years Experience
Bob Pierce Chris Daniel Michael Beckett Chris Lee Kyle Largent
25+ Years Experience 21Years Experience 18 Years Experience 12 Years Experience 11 Years Experience
Jennifer Simpson Matt Tucker
14 Years Experience 15 Years Experience
Over 20 professionals concentrating on sourcing, due diligence and portfolio management and 15 professionals in operations
and 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 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. Focus on Certain Industries
Areas where opportunities exist
• Light and specialty manufacturing
• Established software companies
• Business services
• Distribution/Logistics
• Healthcare services
• Consumer products
Areas we avoid and have not invested in
• Housing and home mortgage companies
• Banking, financial institutions or leasing companies
• High technology or early stage companies
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11. Typical Investment Structure
Senior & Junior Debt Preferred & Common Stock
(80%) (20%)
 Senior debt with a variable rate with a  Options or warrants to own Common
minimum rate of 8-10% Stock
 Subordinated debt with a variable rate with  Preferred stock
a minimum or fixed rate with current pay of  Dividend paid or accrued at 6% to
12-15% 8% per year
 5-year term with interest only paid  5 year term
 1st and 2nd Lien: some collateral and  Common stock
reasonable cash flow coverage  Usually accompanied with the
 Strong inter-creditor agreement that avoid requirement that the borrower buy back
blockage of interest payments our stock and warrants
 Reasonable covenants such as maximum  Expected gross return is 25% to 30%
leverage ratios
 Options or success fees to enhance the
return
 Expected gross return is 12% to 15%,
depending on risk profile
Disclaimer: Past performance is not an indication of future performance
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12. Track Record as of December 31, 2012
• Common Stock dividend of 5 cents per month, $0.60 per year
– Raised the dividend twice in 2011 for a total increase of 25%, plus paid an
extra dividend of $0.03 per share in March of 2012
• Paid 91 consecutive monthly dividends as of January 31, 2013
– Dividend yield is 8.0% as of February 1, 2013
– Dividends have been 100% covered by cash earnings over the past three
years
• Had $345.9 million in assets and had $44.5 million of short-term
borrowings (repaid January 3, 2013) and $24.5 million outstanding under
the revolving credit facility
– Ratio of debt to equity is relatively low for a public lending company and is
always less than 1-to-1 by law
• Currently invested in 21 companies across 15 states and 13 different
industries
Disclaimer: Past performance is not an indication of future performance
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13. Portfolio Diversification as of December 31, 2012
Gladstone Investment: By Industry at fair value
Chemicals, Plastics, and Rubber - 22.0%
Containers, Packaging, and Glass - 14.2%
Machinery - 12.8%
Leisure, Amusement, Motion Pictures, Entertainment - 11.1%
Home and Office Furnishings - 8.9%
Electronics - 8.8%
Diversified/Conglomerate Manufacturing - 8.8%
Aerospace and Defense - 5.1%
Automobile - 3.2%
Buildings and Real Estate - 2.9%
Cargo Transport - 2.8%
Beverage, Food and Tobacco - 0.2%
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14. Geographic Diversification as of December 31, 2012
We have investments to businesses in states highlighted in blue
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15. 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* $14.2 $0.59
*Annualized based on nine months of operating results
Disclaimer: Past performance is not an indication of future performance
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16. Our Portfolio is Growing
 Size of interest-bearing Weighted Average Interest-Bearing Assets
debt investment portfolio
has increased 26% a year 225.0 Restart
since we restarted Origination
Activity
$204.7 $202.7
origination activity, to over $200.0
Weighted Average Balance ($ mm)
$200 million. $174.4
$177.1
175.0
$165.2
 Size of entire portfolio has $152.5
$161.4
increased from $140 150.0
$147.3
$135.2
million to over $270 $122.7
$129.2
125.0
million, at fair value.
100.0
75.0
Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12
Weighted Average Interest-Bearing Assets 33.2%
Disclaimer: Past performance is not an indication of future performance
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17. Interest Income and Investment Yields are Increasing
Restart
 Interest income is 7.0 Origination
Restart
Activity
16%
Origination
$6.5
growing at 33.2% a Activity $6.5
year. $6.0
15%
 The yield on our $5.4
$5.5
Interest Income ($ mm)
interest-bearing debt $5.1 14%
5.0
investments has $4.7
Yield (%)
$4.5
$4.4
increased from 12.7% 13%
12.5% 12.5% 12.5% 12.5%
10.3% to 12.7% 4.0 $3.9 $3.8 12.0%
12.2%
since we restarted $3.5
11.5%
11.8% 12%
our originations. 11.3%
3.0
11%
10.3%
2.0 10%
Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12
Interest Income Yield
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Disclaimer: Past performance is not an indication of future performance
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18. Gladstone Statistics vs. Public Market BDCs
GAIN BDC Median (3)
Price to Net Asset Value 0.86x (1) 1.03x
Debt to Equity (as of 12/31/12) 21.6% (2) 51.3%
Dividend Yield 8.0% 9.0%
Total Market Value $198 $326
(1) Selling at a discount to value
(2) Excludes short-term borrowings.
(3) Source: Raymond James BDC Industry Weekly Newsletter, February 8, 2013
Disclaimer: Past performance is not an indication of future performance
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19. We are a Shareholder Focused Company
• Maintain the monthly distribution and dividends to
stockholders 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
• Published quarterly reports and hold quarterly calls for
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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20. 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 ten public companies
• Business Model: Emphasis on deal flow from a proprietary
originations network and strategic relationships with LBO
funds
• 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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21. Why own Gladstone Investment Common Stock?
 High Monthly Dividends Paid From Cash Earnings:
 Current annual yield of 8.0% as of February 1, 2013
 Increased the dividend last year by 25% and paid a bonus dividend of $0.03
 Dividends have been 100% covered by cash earnings over the past three years
 Paid 91 consecutive monthly dividends since the IPO (over 7 years ago)
 Capital Gains Upside: 32% of assets are invested in the stock of businesses. The
stocks do not contribute to our monthly dividend, but do provide for potential
realized capital gains
 Conservative Balance Sheet with Low Leverage: Weighted average leverage
during the latest quarter was less than 30% of net assets ($1 debt to $3 equity)
 Diversification: Investments in multiple companies in multiple states and industries
 Strong and Experienced Management: Operating team of 50+ professionals with
a successful track record of investing in private businesses
 Liquidity for Investors: Common stock is listed on NASDAQ: GAIN
Disclaimer: Past performance is not an indicator of future performance.
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22. 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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