4



          SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

                               FORM 10-K

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                   OF THE SECURITIES EXCHANGE ACT
          OF 1934 For the fiscal year ended June 30, 1999

                                 OR

[  ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                 OF THE SECURITIES EXCHANGE ACT OF 1934
            r the transition period from _______ to _______

              Commission    File   Number   0-22618
                  VENTURE LENDING & LEASING, INC.
            (Exact name of registrant as specified in its charter)

Maryland  13-3775187  (State or other  jurisdiction of  incorporation or (I.R.S.
               Employer or organization) Identification No.)

          2010 North First  Street,  Suite 310, San Jose,  CA 95131
                           (Address of principal
                       executive offices) (Zip Code)

      Registrant's telephone number, including area code:  (408) 436-8577

Securities Registered Pursuant to Section 12(b) of the Act:   None
Securities Registered Pursuant to Section 12(g) of the Act:Common Stock,
 $0.001 par value

         Indicate by check mark whether the registrant has (i) filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  and Exchange Act
of 1934  during the  preceding  12 months (or for such  shorter  period that the
registrant was required to file such reports), and (ii) has been subject to such
filing requirements for the past 90 days: Yes

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  be reference in Part II of this Form 10-K or any amendment to this
Form 10-K: ___

As the registrant's shares are not  publicly-traded,  the aggregate market value
of the  voting  stock  held  by  non-affiliates  of  the  registrant  cannot  be
determined.

The  number of shares  outstanding  of each of the  issuer's  classes  of common
stock, as of September 15, 1999 was 48,318.58.

Documents Incorporated by Reference Document Description 10-K Part None




<PAGE>


PART I

ITEM 1.  BUSINESS.

Introduction.
------------
         Venture  Lending  &  Leasing,   Inc.   ("Fund")  is  a  non-diversified
closed-end   management  investment  company  electing  status  as  a  "business
development  company"  ("BDC") under the  Investment  Company Act of 1940 ("1940
Act") whose  investment  objective is to achieve a high total  return.  The Fund
provides  asset-based  financing to carefully  selected  venture  capital-backed
companies,  in the  form  of  secured  loans,  installment  sales  contracts  or
equipment  leases.  The Fund  generally  receives  warrants  to  acquire  equity
securities  in  connection  with  its  portfolio  investments.  There  can be no
assurance that the Fund will attain its investment objective. Westech Investment
Advisors, Inc. ("Westech Advisors") is the Fund's Investment Manager and Siguler
Guff  Advisers,  L.L.C.  ("Siguler  Guff  Advisers")  is its Fund  Manager.  The
Investment  Manager and the Fund  Manager are  referred to  collectively  as the
"Managers."  The Fund was  incorporated  in Maryland on  September  29, 1993 and
commenced business on July 5, 1994.

         The Fund's shares of Common Stock, $.001 par value (`Shares") were sold
to  subscribers  pursuant to capital  calls made through  August 8, 1997.  Total
committed capital of $46.6 million has been fully funded as of June 30, 1999.

Investment Program.
------------------
         General.  As a BDC,  the Fund  will  invest  at least  70% of its total
assets  ("qualifying  assets")  in  securities  of  companies  that  qualify  as
"eligible  portfolio  companies." An eligible  portfolio  company generally is a
United States  company that is not an  investment  company and that (i) does not
have a class of securities  registered on an exchange or included in the Federal
Reserve Board's  over-the-counter  margin list; (ii) is actively controlled by a
BDC and has an affiliate of a BDC on its board of directors; or (iii) meets such
other criteria as may be established by the SEC. See  "Regulation." The Fund may
invest  up to  30% of its  total  assets  in  non-qualifying  assets,  including
companies that are not eligible  portfolio  companies (for example,  because the
company's  securities  are  listed on the  National  Association  of  Securities
Dealers'  Automated  Quotation  System) and eligible  portfolio  companies as to
which  the  Fund  does  not  offer  to  make  available  significant  managerial
assistance.  The foregoing percentages are determined, in the case of financings
in which the Fund commits to provide  financing prior to funding the commitment,
by the amount of the Fund's total assets represented by the value of the maximum
amount of securities to be issued by the borrower or lessee to the Fund pursuant
to such commitment.

         Venture  Loans  and  Leases.  Venture  loans  generally  consist  of  a
promissory  note secured by the equipment or other assets to be purchased by the
borrower.  The Fund generally obtains a security interest in the assets financed
and receives periodic payments of interest and principal, and generally receives
a final payment constituting additional interest at the end of the transaction's
term.  Venture  leases  consist  of a lease  from the Fund to the  lessee of the
assets to be financed, with periodic payments of rent and, in most cases, with a
put option to sell the assets to the borrower at the end of the lease term for a
predetermined  or formula  price.  The interest rate and  amortization  terms of
venture  loans,  the  rental  rate and put  provisions  of leases  and all other
transaction terms are individually negotiated between the Fund and each borrower
or lessee. Because the Fund seeks to qualify as a "regulated investment company"
("RIC")  under the Internal  Revenue  Code of 1986  ("Internal  Revenue  Code"),
provisions  of the Internal  Revenue Code restrict the terms upon which the Fund
may enter into  venture  leases and the  extent to which  venture  leases may be
used, and the Fund  anticipates  structuring the majority of its transactions as
venture loans.

         Typically, loans or leases are structured as commitments by the Fund to
finance asset  acquisitions by the borrower or lessee over a specified period of
time.  The  commitment  of the Fund to  finance  future  asset  acquisitions  is
typically  subject  to the  absence of any  default  under the loan or lease and
compliance  by the borrower with  requirements  relating to, among other things,
the type of assets to be  acquired.  Although the Fund's  commitments  generally
provide  that the Fund is not  required  to continue  to fund  additional  asset
purchases if there is a material  adverse  change in the  borrower's or lessee's
financial  condition,  it is possible  that a borrower's  or lessee's  financial
condition  will  not be as  strong  at the  time  the  Fund  finances  an  asset
acquisition as it was at the time the commitment was entered into.

         Warrants and Equity Securities. The Fund generally acquires warrants to
purchase  equity  securities of the borrower or lessee in connection  with asset
financings.  The terms of the warrants,  including the expiration date, exercise
price and terms of the equity  security for which the warrant may be  exercised,
are negotiated individually with each borrower or lessee.  Substantially all the
warrants and underlying  equity  securities are restricted  securities under the
1933 Act at the time of issuance;  the Fund  generally  negotiates  registration
rights with the borrower or lessee that may provide (i) "piggyback" registration
rights, which permit the Fund under certain circumstances to include some or all
of the securities owned by it in a registration  statement filed by the borrower
or  lessee  or (ii)  under  rare  circumstances,  "demand"  registration  rights
permitting  the Fund under  certain  circumstances  to require  the  borrower or
lessee to  register  the  securities  under  the 1933 Act (in some  cases at the
Fund's expense).

Investment Policies.
-------------------
         For  purposes  of  these  investment   policies  and  unless  otherwise
specified, references to the percentage of the Fund's total assets "invested" in
securities  of a company will be deemed to refer,  in the case of  financings in
which the Fund commits to provide financing prior to funding the commitment,  to
the amount of the Fund's  total assets  represented  by the value of the maximum
amount of securities to be issued by the borrower or lessee to the Fund pursuant
to such  commitment;  the Fund will not be required to divest  securities in its
portfolio  or decline to fund an  existing  commitment  because of a  subsequent
change in the value of securities the Fund has previously  acquired or committed
to purchase.

         Diversification    Standards.    The   Fund   is    classified   as   a
"non-diversified"  closed-end investment company under the 1940 Act. However the
Fund  seeks  to  qualify  as a RIC,  and  therefore  must  meet  diversification
standards under the Internal Revenue Code.

         To  qualify  as a RIC,  the Fund must meet the  issuer  diversification
standards  under the Internal  Revenue Code that require  that,  at the close of
each  quarter of the Fund's  taxable  year,  (i) not more than 25% of the market
value of its total assets is invested in the  securities  of a single issuer and
(ii) at least 50% of the  market  value of its total  assets is  represented  by
cash,  cash items,  government  securities,  securities  of other RICs and other
securities  (with each investment in such other  securities  limited so that not
more than 5% of the market  value of the Fund's  total assets is invested in the
securities  of a single  issuer  and the Fund  does not own more than 10% of the
outstanding  voting  securities  of  a  single  issuer).  For  purposes  of  the
diversification  requirements under the Internal Revenue Code, the percentage of
the Fund's total assets  "invested" in securities of a company will be deemed to
refer, in the case of financings in which the Fund commits to provide  financing
prior to  funding  the  commitment,  to the amount of the  Fund's  total  assets
represented by the value of the  securities  issued by the borrower or lessee to
the Fund at the time each portion of the commitment is funded.

         The Fund will invest no more than 25% of its total assets in securities
of companies in any single industry.  The broad industry categories in which the
Fund  anticipates  that most of its  investments  will fall (and  within each of
which  there  may  be  several   "industries"   for  purposes  of  the  industry
diversification    policy)   include    computer   and    semiconductor-related,
medical/biotechnology and communications.

         Investment   Guidelines.   In  selecting  investments  for  the  Fund's
portfolio,  the Managers endeavor to meet the investment guidelines  established
by the Fund's Board of Directors.  The Fund may, however,  make investments that
do not conform to one or more of these guidelines when deemed appropriate by the
Managers.  Such investments might be made if the Managers believe that a failure
to  conform  in one area is offset by  exceptional  strength  in  another  or is
compensated  for  by  a  higher  yield,  favorable  warrant  issuance  or  other
attractive transaction terms or features.

         Leverage.  The Fund is  permitted  to borrow  money from and issue debt
securities to banks,  insurance companies and other lenders to obtain additional
funds to originate  venture  loans and leases.  Under the 1940 Act, the Fund may
not incur borrowings unless,  immediately after the borrowing is incurred,  such
borrowings would have "asset coverage" of at least 200 percent. "Asset coverage"
means the ratio which the value of the Fund's total assets, less all liabilities
not represented by the borrowings and any other liabilities constituting "senior
securities" under the 1940 Act, bears to the aggregate amount of such borrowings
and senior  securities.  The practical effect of this limitation is to limit the
Fund's  borrowings  and other senior  securities to 50% of its total assets less
its liabilities other than the borrowings and other senior securities.

         The use of  leverage  increases  investment  risk.  The Fund's  lenders
require that the Fund pledge  portfolio  assets as collateral for loans.  If the
Fund is unable to  service  the  borrowings,  the Fund may risk the loss of such
pledged  assets.  Lenders  also  require  that the Fund agree to loan  covenants
limiting the Fund's ability to incur  additional debt or otherwise  limiting the
Fund's  flexibility,  and loan  agreements may provide for  acceleration  of the
maturity of the indebtedness if certain financial tests are not met.

Temporary  Investments.  Pending investment in asset financing  transactions and
pending distributions,  the Fund invests excess cash in (i) securities issued or
guaranteed  by the U.S.  government,  its  agencies or  instrumentalities,  (ii)
repurchase  agreements fully  collateralized  by U.S.  government  securities or
(iii) short-term  high-quality debt instruments of U.S.  corporations.  All such
investments will mature in one year or less. The U.S.  government  securities in
which the Fund may invest include U.S. government  securities backed by the full
faith and  credit of the U.S.  government  (such as  Treasury  bills,  notes and
bonds) as well as  securities  backed only by the credit of the issuing  agency.
Corporate  securities  in which the Fund may invest  include  commercial  paper,
bankers' acceptances and certificates of deposit of domestic or foreign issuers.

         The Fund  also may  enter  into  repurchase  agreements  that are fully
collateralized by U.S. government securities with banks or recognized securities
dealers,  in which  the  Fund  purchases  a U.S.  government  security  from the
institution  and  simultaneously  agrees  to  resell  it  to  the  seller  at an
agreed-upon  date and price.  The repurchase  price is related to an agreed-upon
market rate of interest rather than the coupon of the debt security and, in that
sense,  these  agreements  are  analogous to secured  loans from the Fund to the
seller.  Repurchase  agreements  carry certain risks not associated  with direct
investments in securities,  including  possible  declines in the market value of
the underlying securities and delays and costs to the Fund if the other party to
the transaction defaults.

         Other  Investment  Policies.  The Fund will not sell securities  short,
purchase  securities  on margin  (except  to the  extent  the  Fund's  permitted
borrowings  are deemed to  constitute  margin  purchases),  write puts or calls,
purchase or sell  commodities  or  commodity  contracts or purchase or sell real
estate.  The Fund will not underwrite the securities of other companies,  except
to the  extent the Fund may be deemed an  underwriter  upon the  disposition  of
restricted securities acquired in the ordinary course of the Fund's business.

         The Fund's  investment  objective,  investment  policies and investment
guidelines (other than its status as a BDC) are not fundamental policies and may
be changed by the Fund's  Board of  Directors  at any time  without  shareholder
approval.

Regulation.
         Generally, to be eligible to elect BDC status, a company must engage in
the  business  of  furnishing  capital  and  offering   significant   managerial
assistance  to  "eligible   portfolio   companies,"  as  defined   below.   More
specifically,  in order to qualify  as a BDC,  a company  must (i) be a domestic
company;  (ii) have  registered  as a class of its  securities  or have  filed a
registration  statement  with the SEC  pursuant to Section 12 of the  Securities
Exchange  Act of  1934;  (iii)  operate  for the  purpose  of  investing  in the
securities  of certain  types of  eligible  portfolio  companies;  (iv) offer to
extend significant  managerial  assistance to such eligible portfolio companies;
(v) have a majority of disinterested  directors; and (vi) file (or under certain
circumstances, intend to file) a proper notice of election with the SEC.

         "Making available significant  managerial  assistance" is defined under
the 1940 Act, in  relevant  part,  as (i) an  arrangement  whereby the  business
development  company,  through its  officers,  directors,  employees  or general
partners, offers to provide and, if accepted, does provide, significant guidance
and counsel  concerning the management,  operations or business  objectives of a
portfolio company;  or (ii) the exercise by a business  development company of a
controlling influence over the management or polices of the portfolio company by
the  business  development  company  acting  individually  or as part of a group
acting together which controls the portfolio  company.  The officers of the Fund
intend to offer to provide managerial assistance,  including advice on equipment
acquisition and financing,  cash flow and expense management,  general financing
opportunities,  acquisition opportunities and opportunities to access the public
securities markets, to the great majority of companies to whom the Fund provides
venture loans or leases. In some instances,  officers of the Fund might serve on
the board of directors of borrowers or lessees.

         An "eligible  portfolio  company"  generally is a United States company
that is not an  investment  company  and  that  (i)  does  not  have a class  of
securities  registered on an exchange or included in the Federal Reserve Board's
over-the-counter  margin list;  (ii) is actively  controlled by a BDC and has an
affiliate of a BDC on its board of directors; or (iii) meets such other criteria
as may be  established  by the SEC.  Control  under the 1940 Act is  presumed to
exist where a BDC owns more than 25% of the outstanding voting securities of the
eligible portfolio company.

         The 1940 Act prohibits or restricts  companies  subject to the 1940 Act
from investing in certain types of companies, such as brokerage firms, insurance
companies,  investment banking firms, and investment  companies.  Moreover,  the
1940 Act limits the type of assets that BDCs may  acquire to certain  prescribed
qualifying  assets and certain  assets  necessary  for its  operations  (such as
office  furniture,  equipment,  and  facilities) if, at the time of acquisition,
less  than 70% of the  value of  BDC's  assets  consist  of  qualifying  assets.
Qualifying assets include:  (i) privately acquired  securities of companies that
were  eligible  portfolio   companies  at  the  time  such  BDC  acquired  their
securities; (ii) securities of bankrupt or insolvent companies; (iii) securities
of eligible portfolio companies controlled by a BDC; (iv) securities received in
exchange for or distributed in or with respect to any of the foregoing;  and (v)
cash items, government securities and high-quality short-term debt. The 1940 Act
also places restrictions on the nature of transactions in which, and the persons
from  whom,  securities  can be  purchased  in order  for the  securities  to be
considered  qualifying assets.  Such restrictions  include limiting purchases to
transactions not involving a public offering and the requirement that securities
be  acquired  directly  from  either  the  portfolio  company  or its  officers,
directors or affiliates.

         The Fund,  as a BDC, may sell its  securities  at a price that is below
its  net  asset  value  per  share,  provided  that a  majority  of  the  Fund's
disinterested  directors  has  determined  that such  sale  would be in the best
interests of the Fund and its  shareholders and upon the approval by the holders
of a majority of its outstanding voting securities,  including a majority of the
voting  securities held by  non-affiliated  persons,  of such policy or practice
within one year of such sale.  A majority of the  disinterested  directors  also
must  determine in good faith,  in  consultation  with the  underwriters  of the
offering if the offering is underwritten, that the price of the securities being
sold is not less than a price which  closely  approximates  market  value of the
securities,  less any distribution  discounts or commissions.  As defined in the
1940 Act, the term "majority of the outstanding  voting  securities" of the Fund
means the vote of (i) 67% or more of the Fund's Shares present at a meeting,  if
the  holders  of  more  than  50% of  the  outstanding  Shares  are  present  or
represented by proxy,  or (ii) more than 50% of the Fund's  outstanding  Shares,
whichever is less.

         Many of the  transactions  involving a company and its  affiliates  (as
well as affiliates of those affiliates) which were prohibited  without the prior
approval  of the SEC  under  the 1940 Act  prior  to its  amendment  by the 1980
Provisions are permissible for BDCs, including the Fund, upon the prior approval
of a  majority  of the Fund's  disinterested  directors  and a  majority  of the
directors having no financial  interest in the  transactions.  However,  certain
transactions  involving  certain  persons  related  to the Fund,  including  its
directors,  officers,  and the Managers, may still require the prior approval of
the SEC. In general, (i) any person who owns, controls,  or holds power to vote,
more than 5% of the  Fund's  outstanding  Shares  (ii) any  director,  executive
officer, or general partner of that person; and (iii) any person who directly or
indirectly  controls,  is controlled by, or is under common  control with,  that
person, must obtain the prior approval of a majority of the Fund's disinterested
directors,  and,  in some  situations,  the prior  approval  of the SEC,  before
engaging in certain transactions  involving the person or any company controlled
by the Fund. The 1940 Act generally does not restrict  transactions  between the
Fund and its eligible portfolio companies.  While a BDC may change the nature of
its business so as to cease being a BDC (and in  connection  therewith  withdraw
its election to be treated as a BDC) only if  authorized  to do so by a majority
vote  (as  defined  by the  1940  Act)  of its  outstanding  voting  securities,
shareholder  approval of changes in other fundamental  investment  policies of a
BDC is not  required (in  contrast to the general  1940 Act  requirement,  which
requires  shareholder  approval  for a  change  in  any  fundamental  investment
policy).

Dividends and Distributions.
---------------------------
         The Fund intends to distribute to shareholders substantially all of its
net investment  income and net realized capital gains, if any, as determined for
income tax purposes.  Applicable law, including  provisions of the 1940 Act, may
limit the  amount of  dividends  and other  distributions  payable  by the Fund.
Income  dividends will generally be paid quarterly to  shareholders of record on
the last day of each preceding  calendar quarter end.  Substantially  all of the
Fund's net  capital  gain (the  excess of net  long-term  capital  gain over net
short-term  capital  loss) and net  short-term  capital  gain,  if any,  will be
distributed  annually with the Fund's final quarterly dividend  distribution for
the year.

         Until July 5, 1998,  the Managers  reinvested  the proceeds of matured,
repaid or resold  investments,  net of required  distributions  to shareholders,
principal  payments on borrowings and expenses or other obligations of the Fund,
in new loans or leases. Following that date, the Fund has begun to distribute to
investors  all  proceeds   received  from   principal   payments  and  sales  of
investments,  net of reserves and expenses,  principal  repayments on the Fund's
borrowings,  amounts required to fund financing  commitments entered into before
such date, and any amounts paid on exercise of warrants.  Distributions  of such
amounts are likely to cause  annual  distributions  to exceed the  earnings  and
profits of the Fund available for  distribution,  in which case such excess will
be considered a tax free return of capital to a shareholder to the extent of the
shareholder's  adjusted  basis in his shares and then as capital gain.  The Fund
may borrow money to fund  shareholder  distributions,  to the extent  consistent
with the 1940 Act and a prudent capital structure.

Competition.
------------
         Other entities and individuals compete for investments similar to those
proposed to be made by the Fund,  some of whom may have greater  resources  than
the Fund. Furthermore, the Fund's need to comply with provisions of the 1940 Act
pertaining  to BDCs and  provisions of the Internal  Revenue Code  pertaining to
RICs might restrict the Fund's flexibility as compared with its competitors. The
need to compete for investment  opportunities may make it necessary for the Fund
to offer borrowers or lessees more attractive  transaction  terms than otherwise
might be the case.

Employees.
----------
         The  Fund  has no  employees;  all of its  officers  are  officers  and
employees of the  Managers,  and all of its required  services are  performed by
officers and employees of the Managers.

ITEM 2.  PROPERTIES.

         All of the Fund's office space is provided by the Managers.

ITEM 3.  LEGAL PROCEEDINGS.

          In  December  1997,  an  alleged  breach of  contract  case was filled
against  the Fund  arising out of the Fund's  refusal to fund a secured  loan in
September 1994 due to the borrower's failure to satisfy conditions  precedent in
the agreement,  including,  but not limited to, providing  adequate security for
the loan.  The case is in the  discovery  stage,  and trial is set for  February
2000. In addition to disputing liability, Fund management also believes that the
lack of funding did not cause the  plaintiff to suffer any damages  based on the
facts known at this time.  Counsel for the fund has advised that losses, if any,
arising out of this matter would  probably not be material to the Fund, and Fund
management concurs with that opinion.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were  submitted to a vote of the Fund's  security  holders during the
last quarter of the fiscal year ended June 30, 1999.

<PAGE>


PART II.

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.

         The Fund's Common Stock is not listed on any securities  exchange,  and
all holders of the Fund's Common Stock are subject to  agreements  significantly
restricting the transferability of their shares.

         The approximate  number of holders of record of the Fund's Common Stock
at September 15, 1999 was 52.

         The Fund has established a policy of declaring dividends on a quarterly
basis,  with the most recent dividend being paid on September 2, 1999 to holders
of record on June 30, 1998, in the amount of $124.18 per share.  See  "Dividends
and  Distributions"  under  Item  1 for a  description  of the  Fund's  dividend
policies.

ITEM 6.  SELECTED FINANCIAL DATA.

         The following  table  summarizes  certain  financial data and should be
read in conjunction with the "Management's  Discussion and Analysis of Financial
Condition  and Results of  Operations"  and the financial  statements  and notes
thereto  included  elsewhere in this Form 10-K. The selected  financial data set
forth below has been derived from the audited financial statements.

                                For the Year Ended           For the Year Ended
                                    June 30, 1999                 June 30, 1998
                                 -----------------         ---------------------
Statement of Operations Data:
Investment Income:
Interest on Loans and Leases           $11,545,419                   $12,793,441
Interest on Short - Term investments       209,677                       381,161
                                       -----------                   -----------
Total Investment Income                 11,755,096                    13,174,602

Expenses:

Management Fee to Managers               1,905,721                     2,307,014
Interest Expense                         2,136,991                     2,928,409
Other Expenses                             638,121                       564,975
                                        ----------                    ----------
 Total Expenses                         4,680,833                     5,800,398
                                        ----------                    ----------
Net Investment Income                    7,074,263                     7,374,204

Net Unrealized Gain From
  Investment Transactions               21,910,372                      (41,374)
Net Realized Gain From
  Investment Transactions                4,185,108                     4,993,372
                                        ----------                    ----------
Net Income                             $33,169,743                   $12,326,202

Net Income Per Share:                         $686                          $260

Average Shares Outstanding                  48,319                        47,354

Balance Sheet Data:            As of June 30, 1999           As of June 30, 1998
                               -------------------           -------------------

Total Assets                           $81,705,700                   $88,489,083
Bank Loans                             $22,894,335                   $36,114,059


<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS.


Results of Operations --   Years Ended June 30, 1999 and 1998

         Total investment  income for the years ended June 30, 1999 and 1998 was
$11.8 million and $13.2 million,  respectively, of which $11.5 million and $12.8
million,  respectively,  consisted  of  interest on venture  loans  outstanding.
Remaining  income  consisted of interest on the  temporary  investment  of cash,
pending investment in venture loans and leases, distributions to shareholders or
application to the Fund's expenses.  The decrease in investment income primarily
reflects the decrease in loans & leases  outstanding  from  approximately  $82.0
million as of June 30, 1998 to approximately $54.1 million as of June 30, 1999.

         Warrants with readily  ascertainable  market values are assigned a fair
value based on the difference, if any, between the exercise price of the warrant
and the fair  value of the  equity  securities  for  which  the  warrant  may be
exercised,  adjusted for illiquidity.  On a per share basis, for the years ended
June 30, 1999 and 1998 net income was $686 and $260 respectively.

         The most  significant  factor  effecting  net income for the year ended
June 30, 1999 was the  increase of the  unrealized  gain of the Fund's  publicly
traded  stock and warrant  portfolio of $21.9  million and  realized  gains from
investment  transactions  of $4.2 million.  The unrealized  appreciation  of the
Fund's portfolio was primarily attributable to the $14.3 million appreciation of
the Fund's warrants to purchase stock of Juniper  Networks and the $12.0 million
appreciation of the investment in stock of Brocade  Communications.  Included in
the unrealized  gain from  investment  transactions  for the year ended June 30,
1999,  is an unrealized  loss on loans and leases of $2.4  million.  This amount
represents  a  reduction  in the  estimated  fair  value  of  loans  and  leases
determined by the Fund's managers in accordance with the procedures  established
by the Fund's Board of Directors.

         Expenses  for the years ended June 30, 1999 and 1998 were $4.7  million
and $5.8  million,  respectively,  resulting in net income of $33.2  million and
$12.3 million respectively. Interest expense declined during the year ended June
30, 1999  primarily  reflecting the decrease in bank loans from $36.1 million on
June 30, 1998 to $22.9 million on June 30, 1999.  Management fees decreased from
$2.3 million for the year ended June 30, 1998 to $1.9 million for the year ended
June 30, 1999  reflecting a decreased  asset base upon which fees are calculated
for the period.

         The Fund's policy is to place a loan on  nonaccrual  status when either
principal  or interest  has become past due for 90 days or more.  When a loan is
placed on nonaccrual status,  all interest  previously accrued but not collected
is  reversed.  As of June  30,  1999  and  1998,  the  Fund  had  loan  balances
outstanding of $5.6 million and $2.6 million to borrowers that were carried on a
nonaccrual  basis.  Foregone  interest income on nonaccrual  loans for the years
ended June 30, 1999 and 1998, was $307,000 and $280,000 respectively.

Liquidity and Capital Resources --  June 30, 1999 and June 30, 1998

         Total  capital   committed  to  the  purchase  of  Shares  pursuant  to
subscription  agreements  was  approximately  $46.6 million at June 30, 1999 and
1998. As of June 30, 1999 and 1998, 100% of this committed capital was called to
fund investments in venture loans and leases and to meet the Fund's expenses.

         The Fund has in place a $30  million  securitization  debt  facility to
finance the acquisition of asset-based  loans and leases.  The principal balance
is a 47-month term loan.  Additional amounts can be drawn on the credit facility
by a minimum of $5 million and in $1 million increments in excess thereof. As of
June 30, 1999, $22.9 million was outstanding under this facility,  compared with
$34.4  million as of June 30,  1998.  The Fund  enters into  interest  rate swap
transactions to hedge its interest rate on the debt facility.  At June 30, 1999,
the Fund had interest rate swap  transactions  outstanding with a total notional
principal amount of $34.4 million.  The effect of these swap  transactions is to
convert  the  variable  LIBOR  rate into a fixed rate on the  contract  notional
value.  The  amortization  schedule  for each  borrowing  under the  facility is
expected to correspond to the  amortization of the loans or leases acquired with
the proceeds of each borrowing.

         As of June 30, 1999, 2% of the Fund's assets consisted of cash and cash
equivalents,  compared with 3% as of June 30, 1998. The Fund continued to invest
its assets in  venture  loans and leases  during  the year.  Cumulative  amounts
disbursed  under the Fund's loan  commitments  increased by  approximately  $8.5
million during the year ended June 30, 1999. Net loan amounts  outstanding after
amortization  decreased by  approximately  $27.9 million.  Unfunded  commitments
decreased by approximately $10.9 million.

============== --------------- ------------- -------------- --------------------
Year Ending         Amount       Principal
                   Disbursed    Amortization    Balance     Unfunded Commitments
============== --------------- ------------- -------------- --------------------
June 30, 1999   $143.0 million $88.9 million  $54.1 million       $38.1 million
============== =============== ============== ============= ====================
June 30, 1998   $134.5 million $52.5 million  $82.0 million       $49.0 million
============== =============== ============== ============= ====================

         Because venture loans and leases are privately negotiated transactions,
investments in these assets are relatively illiquid.

         The Fund  seeks to meet the  requirements  to qualify  for the  special
pass-through status available to "regulated investment companies" ("RICs") under
the Internal Revenue Code, and thus to be relieved of federal income tax on that
part of its net investment income and realized capital gains that it distributes
to  shareholders.  To  qualify  as a  RIC,  the  Fund  must  distribute  to  its
shareholders  for each  taxable  year at  least  90% of its  investment  company
taxable income (consisting generally of net investment income and net short-term
capital gain) ("Distribution Requirement").  To the extent that the terms of the
Fund's venture loans provide for the receipt by the Fund of additional  interest
at the end of the loan  term or the  terms of  venture  leases  provide  for the
receipt  by the Fund of a  purchase  price for the asset at the end of the lease
term  ("residual  income"),  the Fund would be required to accrue such  residual
income over the life of the loan or lease, and to include such accrued income in
its gross  income for each  taxable  year even if it receives no portion of such
residual  income  in  that  year.  Thus,  in  order  to  meet  the  Distribution
Requirement and avoid payment of income taxes or an excise tax on  undistributed
income,  the  Fund may be  required  in a  particular  year to  distribute  as a
dividend an amount in excess of the total amount of income it actually receives.
Those  distributions  will be made from the Fund's  cash  assets,  from  amounts
received through amortization of loans or leases or from borrowed funds.


<PAGE>


Year 2000 Issue

         The Fund utilizes  software and related  information  technologies that
will be affected by the date change in the year 2000. The year 2000 issue exists
because many computer  systems and  applications  currently  use two-digit  date
fields to  designate  a year.  When the  century  date  change  occurs,  certain
date-sensitive  systems may recognize the year 2000 as 1900, or not at all. This
inability to  recognize or properly  treat the year 2000 may result in a systems
failure  or  cause  systems  to  process  critical   financial  and  operational
information incorrectly.  Additionally, many of the Fund's customers and service
providers use software and information technology that could also be affected by
the date change.

         Based on ongoing assessments and testing,  the Fund believes that there
is no material risk of business  interruption  as a result of computer errors or
inefficiencies.  The Fund is also  working  with its  vendors and  customers  to
obtain reasonable  assurances that they are taking comparable steps with respect
to their year 2000 exposures.  However, the steps the Fund is taking and intends
to take do not guarantee  complete success or eliminate the possibility that the
Fund will not be adversely affected by the matters related to the year 2000.


<PAGE>


         This information has been derived from unaudited  financial  statements
that, in the opinion of  management,  include all normal  recurring  adjustments
necessary for a fair presentation of such information. The operating results for
any quarter are not necessarily indicative of results for any future period.

Quarterly Results - June 30, 1999 (Unaudited)
                                                 Three Months Ended
                                   September 30, December 31, March 31, June 30,
                                     1998             1998        1999      1999
                                     ----             ----         ----     ----
Investment Income:
Interest on Loans and Leases       $3,281,955 $3,235,529  $2,570,686  $2,459,559
Interest on Short -Term Investments    45,516     54,044      60,516      47,291
                                       ------     ------      ------      ------
Investment Income                   3,327,471  3,289,573   2,631,202   2,506,850
                                    ---------  ---------   ---------   ---------
Expenses:
   Management Fee to the Managers     514,712    460,986     412,305     517,719
   Interest Expense                   633,602    561,833     486,415     455,141
   Other Expense                      147,405    155,938     154,945     179,775
                                      -------    -------     -------     -------
      Total Expenses                1,295,719  1,178,757   1,053,665   1,152,635
                                    ---------  ---------   ---------   ---------
Net Investment Income              $2,031,752 $2,110,816  $1,577,537  $1,354,215
Net Unrealized Gain (Loss)
 From Investment Transactions      (1,105,401)(2,201,514)   (100,672) 25,317,959
Net Realized Gain (Loss)
From Investment Transactions         (129,699) 3,903,122     (20,000)    431,685
                                    ---------- ----------   ---------    -------
Net Income                           $796,652 $3,812,424   $1,456,865$27,103,859
                                     ======== ==========   ========== ==========
Net Income  Per Share                     $17       $79           $30       $561
                                          ===        ===          ===       ====
Average Shares Outstanding             48,319     48,319       48,319     48,319
                                       ======     ======        ======    ======

Quarterly Results - June 30, 1998 (Unaudited)
                                                 Three Months Ended
                                  September 30, December 31, March 31,  June 30,
                                         1997        1997       1998      1998
                                    ----------- ------------- --------- --------
Investment Income:
Interest on Loans and Leases        $2,746,914  $3,227,374 $3,395,265 $3,423,889
Interest on Short -Term Investments     74,993     129,705     97,869     78,594
                                        ------     -------     ------     ------
 Total Investment Income             2,821,907   3,357,079  3,493,134  3,502,483
                                     ---------   ---------  ---------  ---------
Expenses:
   Management Fee to the Managers      562,442     605,146    578,605    558,821
   Interest Expense                    768,158     832,015    694,774    633,462
   Other Expense                        87,353      88,728    204,753    186,140
                                        ------      ------    -------    -------
      Total Expenses                 1,417,953   1,525,889  1,478,132  1,378,423
                                     ---------   ---------  ---------  ---------
Net Investment Income               $1,403,954  $1,831,190 $2,015,002 $2,124,060
Net Unrealized Gain From Investment
Transactions                           463,438  (1,331,406)   908,301   (81,707)
Net Realized Gain From Investment
Transactions                         1,237,920   1,147,559  1,822,117    785,776
                                     ---------   ---------  ---------    -------
Net Income                          $3,105,312  $1,647,343 $4,745,420 $2,828,129
                                    ==========  ========== ========== ==========
Net Income  Per Share                      $70         $34        $98        $59
                                           ===         ===        ===        ===
Average Shares Outstanding              44,492      48,319     48,319     48,319
                                        ======      ======     ======     ======




<PAGE>




                                           VENTURE LENDING & LEASING, INC.

                                             ANNUAL REPORT ON FORM 10-K

                                     FOR THE YEARS ENDED JUNE 30, 1999 AND 1998


                                                       ITEM 8

                                                FINANCIAL STATEMENTS


<PAGE>


INDEX TO FINANCIAL STATEMENTS

Financial Statements Included in Item 8:

         See Item 14(a)






VENTURE LENDING & LEASING,INC.

FINANCIAL STATEMENTS AS OF JUNE 30, 1999 AND 1998
TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To the Shareholders of Venture Lending & Leasing, Inc.:

We have audited the accompanying statements of financial position of
Venture Lending & Leasing, Inc. (a Maryland corporation)
as of June 30, 1999 and 1998,and the related statements of operations,
changes in shareholders equity and cash flowsfor the years then ended.
These financial statements are the responsibility of the Funds management.
Our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the  amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates  made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.  In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Venture
Lending & Leasing, Inc. as of June 30, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted  accounting principles.




/S/ ARTHUR ANDERSEN LLP

San Francisco,
California,

   August   27,   1999

VENTURE LENDING & LEASING, INC.

STATEMENTS OF FINANCIALPOSITION
AS OF JUNE 30,1999
AND 1998



                                                         1999              1998
                                            ----------------- ------------------
                              ASSETS

Loans and leases,
at estimated fair value
(cost of $54,069,547 and $82,007,024 in
   1999 and 1998, respectively)                 $   50,068,324    $   80,405,801
Investments in securities,
at estimated fair value
(cost of $1,749,365 and
   $1,858,813 in 1999 and 1998, respectively)       29,767,030         5,566,106
Cash and cash equivalents                            1,748,410         2,301,753
Other assets                                           121,936           215,423
                                             ================ ==================

Total assets                                    $   81,705,700    $   88,489,083
                                            ================= ==================

                        LIABILITIES AND SHAREHOLDERS EQUITY

Liabilities:
   Bank loans                                   $   22,894,335    $   36,114,059
   Management fees payable                             517,719           560,821
   Accounts payable and
    other accrued liabilities                          239,662           750,953
                                            ----------------- ------------------

Total liabilities                                   23,651,716        37,425,833
                                            ----------------- ------------------

Shareholders equity:
   Common stock, $.001 par value:
     Authorized 100,000,000 shares
     Issued and outstanding
     48,318.58 shares as of June 30, 1999 and 1998          49                49
   Capital in excess of par value                   46,641,051        46,641,051
   Distributions                                  (43,050,082)      (16,871,073)
   Accumulated earnings                             54,462,966        21,293,223
                                             ---------------- ------------------

 Total shareholders equity                         58,053,984        51,063,250
                                             ---------------- ------------------

Total liabilities and shareholders equity      $   81,705,700    $   88,489,083
                                              =============== ==================



                The accompanying notes are an integral part of these statements.

                                          VENTURE LENDING & LEASING, INC.

                                             STATEMENTS OF OPERATIONS
                                    FOR THE YEARS ENDED JUNE 30, 1999 AND 1998



                                                           1999             1998
                                               ---------------- ----------------

INVESTMENT INCOME:
   Interest on loans and leases                   $  11,545,419    $  12,793,441
   Interest on short-term investments                   209,677          381,161
                                               ---------------- ----------------

                Total investment income              11,755,096       13,174,602
                                               ---------------- ----------------

EXPENSES:
   Management fees to the managers                    1,905,721        2,307,014
   Interest expense                                   2,136,991        2,928,409
   Bank loan facility fee                               316,586          239,967
   Other operating expenses                             321,535          325,008
                                               ---------------- ----------------

                Total expenses                        4,680,833        5,800,398
                                               ---------------- ----------------

                Net investment income                 7,074,263        7,374,204

NET CHANGE IN UNREALIZED GAIN
  FROM INVESTMENT TRANSACTIONS                      21,910,372          (41,374)

NET REALIZED GAIN FROM INVESTMENT TRANSACTIONS        4,185,108        4,993,372
                                               ---------------- ----------------

                Net income                        $  33,169,743    $  12,326,202
                                               ================ ================

BASIC EARNINGS PER SHARE                                $686.47          $260.30
                                               ================ ================

WEIGHTED AVERAGE SHARES OUTSTANDING                      48,319           47,354
                                               ================ ================



                The accompanying notes are an integral part of these statements.

                                         VENTURE LENDING & LEASING, INC.

                                   STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
                                    FOR THE YEARS ENDED JUNE 30, 1999 AND 1998



                                  Capital in
                 Common Stock     Excess of                Accumulated
                 ------------------------
                 Shares    Amount  Par Value  Distributions  Earnings      Total
                 ---------------------------------------------------------------

BALANCE, 6/30/97 39,054.38  $40   $37,317,282 $(5,828,791) $8,967,021 40,455,552

Shares sold       9,264.20    9     9,323,769           0         0    9,323,778
Distributions         0.00    0             0 (11,042,282)        0 (11,042,282)
Net income            0.00    0             0           0  12,326,202 12,326,202
                 ---------------------------------------------------------------

BALANCE, 6/30/98  48,318.58  49     46,641,051 (16,871,073)21,293,223 51,063,250

Distributions          0.00   0              0 (26,179,009)       0 (26,179,009)
Net income             0.00   0              0           0 33,169,743 33,169,743
                  ==============================================================

BALANCE, 6/30/99  48,318.58 $49$ 46,641,051 $(43,050,082)$54,462,966 $58,053,984
                 ===============================================================



                The accompanying notes are an integral part of these statements.


                                          VENTURE LENDING & LEASING, INC.

                                             STATEMENTS OF CASH FLOWS
                                    FOR THE YEARS ENDED JUNE 30, 1999 AND 1998



                                                          1999              1998
                                            ----------------- ------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                   $   33,169,743    $   12,326,202
   Adjustments to reconcile net income
    to net cash provided by
    operating activities:
    Amortization of organizational expenses             30,212            29,910
    Amortization of bank loan expenses                  61,362            49,922
    Net realized gain from
      investment transactions                      (4,185,108)       (4,993,372)
    Net change in unrealized gain from
      investment transactions                      (21,910,372)           41,374
    Decrease (increase) in other assets                 1,961           (15,805)
    Increase (decrease) in management
      fees payable                                     (43,102)          115,264
    Decrease in accounts payable and other
      accrued liabilities                            (512,268)         (196,697)
                                            ----------------- ------------------
Net cash provided by operating activities            6,612,428         7,356,798
                                            ----------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Acquisition of loans and leases                 (9,130,095)      (43,843,579)
   Principal payments on loans and leases           37,067,577        24,174,741
   Proceeds from prepayment of loan                          0         2,131,408
   Acquisition of warrants and stock                  (72,559)         (460,008)
   Proceeds from sale of securities                  4,368,039         4,799,884
                                            ----------------- ------------------
Net cash provided by (used in)
   investing activities                            32,232,962       (13,197,554)
                                            ----------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Sales of common stock, net                                0         9,323,778
   Distributions to shareholders                   (26,179,009)     (11,042,283)
   Loan from bank                                    8,500,000        15,000,000
   Repayment of bank loan                          (21,719,724)      (8,885,941)
   Payment for bank loan expenses                            0         (200,000)
                                            ----------------- ------------------
Net cash provided by (used in)
 financing activities                              (39,398,733)        4,195,554
                                            ----------------- ------------------
Net decrease in cash and cash equivalents             (553,343)      (1,645,202)
CASH AND CASH EQUIVALENTS:
   Beginning of year                                 2,301,753         3,946,955
                                            ----------------- ------------------
   End of year                                  $    1,748,410    $    2,301,753
                                            ================= ==================

CASH PAID DURING THE YEAR FOR:
   Taxes                                        $        1,863    $          800
   Interest                                          2,028,607         3,205,161



                The accompanying notes are an integral part of these statements.

                                                       - 9 -
                                          VENTURE LENDING & LEASING, INC.

                                           NOTES TO FINANCIAL STATEMENTS



1.  ORGANIZATION AND OPERATIONS OF THE COMPANY:

Venture  Lending & Leasing,  Inc.  (the Fund) was  incorporated  in  Maryland on
September29,  1993,  as  a  nondiversified,  closed-end  management  investment
company electing status as a business  development  company under the Investment
Company Act of 1940. The purpose of the Fund is to provide asset-based financing
to  venture-capital-backed  companies in the form of secured loans,  installment
sales  contracts or equipment  leases.  Prior to  commencing  its  operations on
July5,  1994,  the  Fund had no  operations  other  than  the sale to  Mitchell
Hutchins Institutional Investors, Inc. (Mitchell Hutchins), which is an indirect
wholly owned  subsidiary of PaineWebber  Group Inc., of 1share of common stock,
$.001  par  value,  for  $1,000.  As  of  June 30,  1999,  the  Fund  meets  the
requirements,  including diversification requirements, to qualify as a regulated
investment company (RIC) under the Internal Revenue Code of 1986.

Costs  incurred  in  connection  with the  organization  of the Fund  were  paid
initially by Mitchell Hutchins and Westech  Investment  Advisors,  Inc. (Westech
Advisors)  (collectively,  the  Managers);  however,  the  Fund  reimbursed  the
Managers  $150,000 of such costs.  This  amount has been  deferred  and has been
amortized  using the  straight-line  method over a period of 60 months  from the
date the Fund commenced operations.  During fiscal 1996, the management contract
of the Fund was assigned from Mitchell Hutchins to Siguler Guff Advisers, L.L.C.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported  amounts and revenues and  expenses  during the  reporting  period.
Actual results could differ from those estimates.

Valuation of Loans and Leases and Investments

Venture loans and leases are privately negotiated transactions,  and there is no
established  trading  market  in  which  such  loans  or  leases  can  be  sold.
Investments in loans and leases are valued at their original purchase price less
amortization  of principal  unless,  pursuant to procedures  established  by the
Funds Board of Directors,  the Funds  Managers  determine  that amortized cost
does not represent fair value.

Substantially  all of the Funds  investment  securities are warrants and stock.
Most of the Funds securities are restricted and cannot be sold publicly without
prior  agreement with the issuer to register the securities  under the 1993 Act,
or by selling the  securities  under Rule 144 or other rules under the 1933 Act,
which permit only limited sales under specified conditions.

Warrants  that are  received  in  connection  with loan and  lease  transactions
generally  will  be  assigned  a  minimal  value  at the  time  of  acquisition.
Thereafter,  warrants on equity  securities  with readily  ascertainable  market
values will be assigned a fair value based on the  difference,  if any,  between
the exercise price of the warrant and the market value of the equity  securities
for which the warrant may be exercised, adjusted for illiquidity.

Restricted  equity  securities  for which a public market exists are valued at a
discount with reference to the market price for unrestricted  equity  securities
of the same  issuers.  The  discount  for these  equity  securities  takes  into
consideration  the  following  factors:  the  nature of the  market in which the
securities are traded,  the existence and terms of any registration  rights, the
proportion of the issuers  securities  held by the Fund, and other factors that
may affect their fair value.  As the  restriction  period and other  restrictive
factors decrease, the discount applied to the securities also decreases.

Cash and Cash Equivalents

Cash and cash equivalents  consist of cash on hand, demand deposits in banks and
repurchase agreements with original maturities of 90 days or less.

Loans and Leases

Unearned income and commitment fees on loans and leases are recognized using the
effective  interest  method over the term of the loan or lease.  Commitment fees
represent  fees received for  commitments  upon which no drawdowns have yet been
made.  When the first draw is made,  the fee is included in unearned  income and
recognized as described above.

The Funds policy is to place a loan on nonaccrual  status when either principal
or interest  has become  past due for 90 days or more.  When a loan is placed on
nonaccrual  status,  all  interest  previously  accrued  but  not  collected  is
reversed.

Loans  classified  as  nonaccrual  amounted  to  approximately   $5,572,740  and
$2,593,552 at June 30, 1999 and 1998,  respectively.  If interest on these loans
had been  accrued,  such  income  would  have been  approximately  $306,990  and
$280,436 in 1999 and 1998, respectively.

Interest Rate Swaps

The Fund enters into interest  rate swap  transactions  to manage  interest rate
exposures  on  its  debt.  Net  interest  receivable  or  payable  on  the  swap
transactions is included in interest  expense.  Gains or losses that result from
the early  termination  of swap  agreements  are deferred and amortized over the
remaining term of the associated debt as additional  interest expense.  Interest
rate swaps that do not qualify as hedges are marked-to-market.
Tax Status

As long as the Fund  qualifies  as a RIC,  it will not pay any  federal or state
corporate income tax on income that is distributed to shareholders (pass-through
status).  Should the Fund lose its  qualification as a RIC, it could be taxed as
an ordinary corporation on its taxable income for that year (even if that income
is distributed to its  shareholders),  and all distributions out of its earnings
and profits will be taxable to shareholders as ordinary income.

Reclassifications

Certain amounts in the prior year financial statements have been reclassified to
conform   with   the   current   financial   statement    presentation.    These
reclassifications   had  no  impact  on   previously   reported  net  income  or
shareholders equity.

3.  SUMMARY OF INVESTMENTS:

Loans and leases generally are made to borrowers pursuant to commitments whereby
the Fund commits to finance assets up to a specified  amount for the term of the
commitments,  upon the terms and  subject to the  conditions  specified  by such
commitment.  As of June 30, 1999, the Funds investments in loans and leases are
entirely  within  the  United  States and are  diversified  among the  following
industries.  The  percentage  of net  assets  (shareholders   equity)  that each
industry  group  represents is shown with the industry  totals.  (The sum of the
percentages does not equal 100 percent  because the percentages are based on net
assets as opposed to total loans and leases.)

                                                                          Value
                                                                 ---------------
Biotechnology:
   Biosys, Inc.                                                     $  1,411,463
   Ceres, Inc.                                                         1,127,006
   Desmos, Inc.                                                           81,893
   Gene Logic, Inc.                                                      634,829
   Protein Delivery, Inc.                                                174,398
   Regen Biologics, Inc.                                                 577,041
   Telek, Inc.                                                           566,176
                                                                 ---------------
            Total biotechnology (7.9% of net assets)                   4,572,806
                                                                 ---------------
Communications equipment:
   Brocade Communications, Inc.                                          801,572
   Cerent                                                              3,307,806
   Juniper Networks, Inc.                                              1,722,781
   Optivision, Inc.                                                      285,073
   Silicon Wireless, Inc.                                              1,204,082
   Socket Communications, Inc.                                            12,672
   Yago Systems, Inc                                                     178,653
                                                                 ---------------
            Total communications equipment (12.9%)                     7,512,639
                                                                 ---------------
Communications service provider:
   Aunet Corporation                                                     371,196
   Digital Generation Systems, Inc.                                    2,844,021
   Exodus Communications, Inc.                                         2,555,795
                                                                 ---------------
            Total communications service provider (9.9%)               5,771,012
                                                                 ---------------
Computer and peripherals:
   Applied Magnetics Corporation                                       1,608,114
   Aptix Corporation                                                     510,569
   Headway Technologies, Inc.                                          3,940,226
   SVision, Inc.                                                         240,542
                                                                 ---------------
            Total computer and peripherals (10.6%)                     6,299,451
                                                                 ---------------
Internet:
   Active Software, Inc.                                            $    162,257
   Adforce, Inc.                                                       1,234,440
   Inverse Network Technology                                            233,082
   Keynote Systems Incorporated                                          361,757
   Netratings, Inc.                                                      151,292
                                                                 ---------------
            Total internet (3.7%)                                      2,142,828
                                                                 ---------------
Medical devices:
   Ciphergen Biosystems                                                  136,489
   Emed                                                                   84,917
   Encelle, Inc.                                                         190,892
   Heartstent Corporation                                                118,241
   Integ Incorporated                                                  3,477,099
   Aerogen, Inc.                                                         206,987
   Intratherapeutics, Inc.                                               741,494
   Myelotec, Inc.                                                        208,523
   Oratec Interventions, Inc.                                            133,067
   Spinal Concepts, Inc.                                                 201,122
   Survivalink Corporation                                               440,648
   Volumetrics Medical Imaging Inc.                                      338,211
                                                                 ---------------
            Total medical devices (10.8%)                              6,277,690
                                                                 ---------------
Other:
   WebVan-Bay Area Inc.                                                1,327,662
   Larex, Inc.                                                           915,426
   Uniax Corporation                                                     803,171
                                                                 ---------------
            Total other (5.2%)                                         3,046,259
                                                                 ---------------
Semiconductors and equipment:
   Abpac, Inc.                                                         1,093,724
   Dynachip Corporation                                                1,120,321
   Equator Technologies, Inc.                                          1,455,978
   i-Compression, Inc.                                                   137,306
   I-Cube, Inc.                                                          684,486
   Lightwave Microsystems Corporation                                    458,785
   Neomagic Corporation                                                  236,372
   Poseidon Technology, Inc.                                             471,663
   Quantum3D, Inc.                                                        88,865
   Sirf Technology                                                       575,512
   Telecruz Technology, Inc.                                             429,215
   Transmeta Corporation                                               2,679,657
   Zero-In Design Automation, Inc.                                       281,659
                                                                 ---------------
            Total semiconductors and equipment (16.7%)                 9,713,543
                                                                 ---------------
Software:
   Calico Technology, Inc.                                          $    357,147
   Commerce One, Inc.                                                    213,156
   Comps.com, Inc.                                                     1,567,166
   Documentum                                                            195,142
   Mineshare Corporation                                                 309,578
   Optimal Networks Corporation                                          228,469
   Persistence Software, Inc.                                            139,262
   Personic Software, Inc.                                               339,425
   Perspecta, Inc.                                                       135,041
   Release Software Corporation                                          215,947
   Rightpoint Software, Inc.                                             341,471
   Solopoint, Inc.                                                        61,818
   Tenth Planet Exploration, Inc.                                         58,175
   Wink Communications, Inc.                                             570,299
                                                                 ---------------
            Total software (8.2%)                                      4,732,096
                                                                 ---------------
            Total loans and leases (cost:  $54,069,547)             $ 50,068,324
                                                                 ===============

The Fund  provides  asset-based  financing  primarily  to start-up  and emerging
growth  venture-capital-backed  companies.  As a result,  the Fund is subject to
general credit risk associated with such companies.  At June 30,  1999, the Fund
has unfunded commitments to borrowers of $38,098,809.

Included in the net change in unrealized gain from investment  transactions  for
the year  ended  June 30,  1999,  is an  unrealized  loss on loans and leases of
$2,400,000.  This amount  represents a reduction in the estimated  fair value of
loans and  leases  determined  by the Funds  Managers  in  accordance  with the
procedures established by the Funds Board of Directors.  The Funds investments
in warrants are entirely within the United States and are diversified  among the
following industry groups. The percentage of net assets that each industry group
represents is shown with the industry totals:

                                                                 Percentage of
                                                    Value         Net Assets
                                               ---------------- ----------------

Communications equipment:
   Juniper Networks, Inc.                           $14,355,229         24.7%
   Other communications equipment                       157,500           .3
                                               ---------------- ----------------

            Total communications equipment           14,512,729         25.0

Other warrants                                        1,327,223          2.3
                                               ================ ================

Total warrants (cost:  $1,022,350)                 $15,839,952         27.3%
                                               ================ ================

The Funds  investments  in stock are entirely  within the United States and are
diversified  among the following  industries.  The percentage of net assets that
each industry group represents is shown with the industry totals:

                                                                   Percentage of
                                     Shares          Value          Net Assets
                                ------------- ---------------- -----------------

Communications equipment:
   Brocade Communications, Inc.      236,847        $12,174,218        21.0%
   Other communications               56,671            589,379         1.0
                                ------------- ---------------- -----------------

Total communications equipment       293,518         12,763,597        22.0

Other common stock                   108,418          1,163,481         2.0
                                ============= ================ =================

Total common stock (cost:$727,015)   401,936        $13,927,078        24.0%
                                ============= ================ =================

4.  WARRANTS AND STOCK:

At  June 30,  1999,  the Fund held  warrants  to  purchase  shares of common and
preferred stock in 63 companies,  of which 10 companies are publicly traded. The
following  is a  summary  of  the  activity  for  investments  in  warrants  and
investments in stocks for the year ended June 30, 1999:

Investments in warrants:
   Balance, June 30, 1998                                    $   1,289,713
     Acquisition of warrants                                         3,800
     Write-off of private warrants                                (137,500)
     Conversion of warrants to stock                               (52,500)
     Net change in unrealized gain                              14,736,439
                                                            ----------------
                                                            ================
   Balance, June 30, 1999                                    $  15,839,952
                                                            ================
                                                            ================

Investments in stocks:
   Balance, June 30, 1998                                    $   4,276,393
     Cash exercises and purchases of stock                          77,802
     Conversion of warrants to stock                               534,685
     Write-off of private stock                                    (45,000)
     Cost basis of stock sold                                     (490,735)
     Net change in unrealized gain                               9,573,933
                                                            ----------------
   Balance, June 30, 1999                                    $  13,927,078
                                                            ================

Warrants  issued by private  companies  whose  equity  securities  do not have a
readily  ascertainable  market value are carried at a minimal value  assigned at
the time of  acquisition.  These  warrants  had a value of  $744,350 at June 30,
1999.  During the year,  the Fund  realized a gain of  $3,877,304 on the sale of
141,542 shares of common stock, which had a cost basis of $490,735.

5.  LONG-TERM DEBT FACILITY:

The Fund has in place a $30 million  securitization debt facility to finance the
acquisition of asset-based loans and leases. The principal balance is a 47-month
term loan.  Additional  amounts can be drawn on the credit facility by a minimum
of $5 million and in $1 million increments in excess thereof. At June 30,  1999,
there was $22.9 million  outstanding  under this facility.  The interest rate on
the  facility  is  LIBOR  plus   .50 percent,   which  at  June 30,   1999,  was
5.73625 percent.  Borrowings  under  the  facility  are  collateralized  by  the
equipment  financed by the Fund under loans and leases  with  assignment  to the
financial institution,  plus other assets of the Fund. The amortization schedule
for  each  borrowing  under  the  facility  is  expected  to  correspond  to the
amortization  of the  loans  and  leases  acquired  with  the  proceeds  of each
borrowing.  The Fund pays a commitment fee of 0.15 percent  monthly based on the
total commitment related to the facility.  Expenses of $200,000 were incurred in
connection with procuring the facility. These expenses have been capitalized and
are being  amortized  over the period of the term loan.  The required  aggregate
debt principal payments for the remaining four years are as follows:

   Year                   Principal Payments
                        -----------------------

-----------------------
   2000                     $   12,394,914
-----------------------
   2001                          8,374,690
-----------------------
   2002                          1,815,766
-----------------------
   2003                            308,965
-----------------------
                        =======================

                            $   22,894,335
                        =======================


6.  Interest rate swaps:
The Fund enters into interest rate swap  transactions to hedge its interest rate
on the debt facility.  The net interest  received or paid on the transactions is
included in interest  expense.  At June 30,  1999,  the Fund had  interest  swap
transactions outstanding with a total notional principal amount of $34.4 million
to convert  floating  rate  liabilities  to fixed rates as  follows:   Notional
amount  of  $22.1 million  whereby  the  Fund  pays a  fixed  interest  rate  of
6.04 percent,  while the financial  institution  pays the floating  90-day LIBOR
rate.  Payments are made monthly and terminate on  January 27,  2003.   Notional
amount  of  $2.3 million  whereby  the  Fund  pays  a  fixed  interest  rate  of
6.04 percent,  while the financial  institution  pays the floating  90-day LIBOR
rate.  Payments are made monthly and terminate on  January 27,  2003.   Notional
amount  of  $10 million   whereby  the  Fund  pays  a  fixed  interest  rate  of
7.025 percent,  while the financial  institution  pays the floating 90-day LIBOR
rate.  Payments are made  quarterly  and  terminate  on  December 31,  2001.  At
June 30,  1999,  the fair market value of these swap  transactions  in excess of
that which  qualifies  as a hedge  resulted in an  unrealized  loss  position of
$283,000  based upon  market  quotes.  The fair value of  interest  swaps is the
estimated  amount that the Company would pay to terminate the swap  transactions
at June 30,  1999,  taking into account interest rates at that date. The Fund is
exposed to credit loss in the event of nonperformance  by the  counterparties to
the interest swap transactions;  however,  these counterparties are creditworthy
financial  institutions,  and the Fund does not anticipate  nonperformance.  The
amount of such credit loss is generally  limited to the fair market value on the
swap agreements, if any.

7. CAPITAL STOCK: There are  100,000,000 shares  of $.001 par value common stock
authorized.  As of June 30,  1999,  48,318.58 shares are issued and outstanding.
The Fund has subscription agreements in effect with its shareholders under which
shareholders  will  purchase  shares of the  Fund,  up to their  full  committed
capital amount,  upon capital calls delivered at least 15 days before payment is
due. As of June 30, 1999, all capital commitments have been received.

8.  EARNINGS  PER SHARE:  Basic  earnings per share are computed by dividing net
income, less dividends on preferred stock, by the weighted average common shares
outstanding.  Diluted  earnings  per share are  computed by dividing net income,
less dividends on nonconvertible preferred stock, by the weighted average common
shares  outstanding,  including the dilutive  effects of potential common shares
(e.g., stock options). The Fund has no preferred stock or instruments that would
be potential  common shares;  thus,  reported basic and diluted earnings are the
same.

9. MANAGEMENT:  Westech Advisors serves as the Fund s  investment  manager,  and
Siguler Guff Advisers,  L.L.C.  serves as its fund manager.  As compensation for
their services to the Fund,  the Managers  receive a management fee computed and
paid at the end of each quarter at an annual rate of  2.5 percent  of the Funds
total assets (including  amounts derived from borrowed funds) as of the last day
of each fiscal  quarter  thereafter.  Fees of  $1,905,721  and  $2,307,014  were
recognized  for the  years  ended  June 30,  1999 and  1998,  respectively.  The
Managers will also receive an aggregate annual incentive fee equal to 20 percent
of all amounts  available for  distribution  to investors  after  investors have
received cash  distributions  equal to  100 percent  of all amounts paid for the
purchase  of  shares  plus  a  preferred  return   calculated  at  a  cumulative
noncompounded  annual rate of  8 percent.  To date,  the Managers have earned no
incentive fee. Certain officers and directors of the Fund also serve as officers
and directors of Westech Advisors and Siguler Guff Advisers, LLC.

10.  COMMITMENTS  AND  CONTINGENCIES:  In  December 1997,  an alleged  breach of
contract  case was filed  against the Fund arising out of the Funds  refusal to
fund a secured loan in September 1994  due to the borrowers  failure to satisfy
conditions precedent in the agreement,  including, but not limited to, providing
adequate security for the loan. The case is in the discovery stage, and trial is
set for February2000.  In addition to disputing liability, Fund management also
believes  that the lack of  funding  did not cause the  plaintiff  to suffer any
damages  based on the facts  known at this time.  Counsel  for the Fund does not
believe that losses, if any, would materially affect the financial  condition of
the Fund, and Fund management  concurs with that opinion.

11. FUTURE FINANCIALACCOUNTING STANDARDS: In June1998, the Financial Accounting
Standards   Board  (FASB)  issued  SFAS  No.133,   Accounting  for  Derivative
Instruments and Hedging  Activities.  SFAS No. 133  establishes  accounting and
reporting  standards  requiring  that  every  derivative  instrument  (including
certain derivative  instruments  embedded in other contracts) be recorded in the
balance sheet as either an asset or liability  measured at its fair value.  SFAS
No.133  requires  that  changes in the  derivatives  fair value be  recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting  for  qualifying  hedges  allows a  derivatives  gains and losses to
offset related  results on the hedged item in the income  statement and requires
that a company formally  document,  designate,  and assess the  effectiveness of
transactions that receive hedge accounting. SFAS No.133 is effective for fiscal
years beginning after June 15,  2000, and the Fund plans to adopt its provisions
effective  July 1,  2000.  From time to time, the Fund enters into interest rate
swaps to hedge its interest rate.  Additionally,  certain of its investments and
long-term  borrowings may have embedded options due to call or put features that
would be required to be accounted for differently under SFAS No.133 as compared
to current accounting principles.  The Fund has not yet quantified the impact of
adopting SFAS  No. 133 on its financial statements;  however, SFAS No.133 could
increase the volatility of future earnings.No. 133 on its financial statements;
however, SFAS No. 133 could increase the volatility of future earnings.



<PAGE>


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
               AND FINANCIAL DISCLOSURE

         Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


DIRECTORS
         The following  are the  directors of the Fund,  all of whom serve until
the next annual meeting of shareholders  or until their  resignation or removal.
Directors who are "interested persons" are indicated by an asterisk.

Name and Position Age Director Occupation During Past Five Years
With Fund               Since
John F. Cogan,     51    1995  Senior Fellow, The Hoover Institution, Stanford
Director                       University, since 1983; Professor, Public Policy,
                               Stanford University (by courtesy).

J. Michael Egan    45    1995  President, Chief Executive Officer, Bluebird
                               Development, L.L.C. since 1996;Partner,Sanderling
                               Ventures (venture capital firm)1992-1996;  prior
                               positions as CEO, board member and senior
                               management in several medical device companies.

Sal Gutierrez,     55    1995  Senior Vice President, Westech Investment Advisor
Director,President and         since 1994, and Senior Vice President, Western
Chief Financial Officer        Technology Investment since 1987.

Scott C. Malpass,  36    1994  Associate Vice President for Finance and Chief
Director                       Investment Officer, and other positions, with
                               University of Notre Dame since 1988.  Concurrent
                               appointment as an Assistant Professor of Finance
                               Business Economics to the University's College of
                               Business Administration.

Roger V. Smith,    56    1994  Founder and President, Smith Venture Group
Director                       (advisory services  for venture
                               capital    companies) since  1994.  Various
                               positions with Silicon  Valley Bank,including
                               President and  Vice   Chairman,from 1983 to 1994.

Arthur Spinner,    48   1996   Managing Partner, Hambro-Spinner Asset Management
Director                       since 1993;General partner of HambroInternational
                               Equity Partners since 1981; Director,TylonGeneral
                               (semiconductors) since 1989

Ronald W. Swenson, 53   1994   President and Director,WestechInvestmentAdvisors
Director, Chairman             since 1994, and President and Director, Western
and CEO*                       Technology since 1980.



<PAGE>



Name and Position  Age  Director Occupation During Past Five Years
With Fund                Since
George Von Gehr,   57    1994   President, Von Gehr International(advisory
 Director                       services for venture capital companies) since
                                1990.

EXECUTIVE OFFICERS

         The  following  are the  executive  officers of the Fund.  All officers
serve at the pleasure of the Board.

Name and Position
 With Fund         Age   Occupation During Past Five Years

Ronald W. Swenson, 54    President and Director,Westech Investment Advisors
Director Chairman        since 1994, and President and Director, Western
and CEO                  Technology investments since 1980.

Sal Gutierrez,     56    Senior Vice President and Director, Westech Investment
Director,President       Advisors since 1994, and Senior Vice President,Western
and CFO                  Technology Investment since 1987.

George W. Siguler, 52    Managing  Director, Siguler Guff Advisers & affiliates
Executive Vice President since 1995; Managing Director of Mitchell Hutchins
Advisory Director        Institutional Investors from 1991 to 1995.Director and
                         President,    Associated   Capital Advisers, Inc.
                         (investment management firm)from  1990  to 1991, Vice
                         Chairman and a director of  Monarch  Capital   Corp.
                         (financial services holding company) from 1984 to 1991.

Pat Breshears,     63    Vice President, Westech Investment Advisors since 1994;
Vice President           Administrator and Corporate Secretary,Western
and Secretary            Technology Investment (venture leasing firm)since 1984.

Donald P. Spencer, 44    Managing  Director,Siguler Guff Advisers and affiliates
Vice President,          since 1995; Senior Vice President (and other positions)
assistant secretary      Mitchell Hutchins Institutional Investors and
                         affiliates from 1989 to 1995.


         The Independent  Directors of the Fund constitute its Audit  Committee.
The Audit  Committee  reviews the scope and results of the Fund's  annual  audit
with the Fund's independent auditors and recommends the engagement of auditors.

ITEM 11. EXECUTIVE COMPENSATION

         The Fund's  Independent  Directors  each receive an annual fee from the
Fund of  $5,000.  Such  directors  also are  reimbursed  by the  Fund for  their
expenses  in  attending  meetings  of the Board of  Directors  or any  committee
thereof and receive a fee for  attendance in person at any meeting at a per diem
rate of $500. The Fund's directors who are "interested  persons" of the Fund, as
defined  in the 1940  Act,  receive  no  compensation  from  the Fund for  their
services as directors,  other than  reimbursement of their expenses in attending
meetings.   The  Independent   Directors   received  the  following  amounts  of
compensation  during the year ended June 30, 1999: Mr. Cogan -- $3,750; Mr. Egan
-- $4,250;  Mr.  Malpass (paid by his direction to the University of Notre Dame)
-- $4,250;  Mr.  Smith --  $3,750;  Mr.  Spinner -- $3,750;  and Mr. Von Gehr --
$3,750.



ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT
Beneficial Owners of More Than 5% of the Fund's Shares as of the Record Date

====================================== =========================================
Name and Address of Shareholder*       Number and Percentage of
                                        Shares Beneficially Owned
====================================== =========================================
Carpenter Company Profit Sharing Plan          2,591.095; 5.36%
====================================== =========================================
Orix USA                                       3,627.532; 7.51%
====================================== =========================================
Northern Trust, as Custodian for
San Antonio Fire and
Police Pension Plan                           5,182.189; 10.72%
====================================== =========================================
University of Notre Dame                      5,182.189; 10.72%
====================================== =========================================
University of Richmond                        5,182,189; 10.72%
====================================== =========================================
MBTA Retirement Fund                           3,109.314; 6.43%
====================================== =========================================
Constellation Investment                       4,728.116; 9.79%
====================================== =========================================
Leland Stanford University                   10,364.379; 21.45%
====================================== =========================================


* Each of the  shareholders  listed in this Annex may be  contacted  c/o Westech
Investment  Advisors,  Inc.,  2010 North First  Street,  Suite 310, San Jose, CA
95131.

Beneficial  Ownership of Fund Shares by Fund Directors and Executive Officers on
September 30, 1998

No director or executive  officer of the Fund owns in excess of 1% of the Shares
outstanding.  Westech  Investment  Advisors,  all the stock of which is owned by
Messrs.  Ronald W.  Swenson and  Salvador O.  Gutierrez,  directors of the Fund,
owned  51.821  Shares.  Mr. Roger  Smith,  a director of the Fund,  owned 51.821
Shares through a retirement account and 103.644 Shares  personally.  Mr. Michael
Egan, a director of the Fund,  owned 103.64  Shares.  Mr. George W. Siguler,  an
executive  officer and  Advisory  Director  of the Fund,  owned  155.464  Shares
through a retirement account and 51.821 Shares jointly with his wife. Trusts for
the  benefit  of  Mr.  Siguler's  minor  children  held  103.646  Shares  in the
aggregate.  Mr. Donald Spencer,  an executive  officer of the Fund, owned 10.363
Shares jointly with his wife.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Fund is a party to a  Management  Agreement,  dated as of December  22, 1995
("Management  Agreement")  between  the  Fund  on  the  one  hand,  and  Westech
Investment  Advisors and Siguler Guff Advisers on the other hand. The Management
Agreement  was last  approved by the Fund's Board of Directors at a meeting held
on  October  3,  1997,  and by the  Fund's  shareholders  at a  meeting  held on
September  26,  1995.  Further  renewal  of the  Management  Agreement  will  be
considered  by the board at a meeting to be held in  November  1999.  During the
Fund's  fiscal year ending June 30,  1999,  the Fund paid  aggregate  investment
management fees totaling  $1,905,721 to Westech Investment  Advisors and Siguler
Guff Advisers pursuant to the terms of the Management Agreement.

         Westech Investment  Advisors,  the Investment Manager, is a corporation
that is a registered  investment  adviser under the  Investment  Advisers Act of
1940  ("Advisers  Act").  Messrs.  Swenson  and  Gutierrez,  the sole  executive
officers of Westech Investment Advisors,  each own 50% of its voting securities.
Westech  Investment  Advisor's  principal  business  address,  and the principal
business address of Messrs.  Swenson and Gutierrez,  is 2010 North First Street,
Suite 310, San Jose, CA 95131.

         Siguler Guff Advisers, the Fund Manager, is a limited liability company
that is a registered  investment  adviser  under the Advisers  Act.  100% of the
voting  securities  of Siguler Guff  Advisers are  beneficially  owned,  through
holding companies, as follows: 45% by George W. Siguler, 45% by Drew J. Guff and
10% by Donald P. Spencer. A portion of the holdings of Messrs. Siguler, Guff and
Spencer listed above are held in trust for their minor  children.  The principal
business address of Siguler Guff Advisers, and the principal business address of
Messrs. Siguler, Guff and Spencer, is Rockefeller Center, 630 Fifth Avenue, 16th
Floor, New York, NY 10111.

PART IV.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)             Index to Financials Statements and Financial Statement Schedules

                                                                            Page
Report of Independent Public Accountants                                      16

Statement of Financial Position as of June 30, 1999 and 1998                  17

Statement of Operations for the Years Ended June 30, 1999 and 1998            18

Statement of Changes in Shareholders' Equity for the Years Ended
June 30, 1999 and 1998                                                        19

Statement of Cash Flows for the Years Ended June 30, 1999 and 1998            20

Notes to Financial Statements                                                 21

Financial  Statement  Schedules  for the  Years  Ended  June  30,  1999 and 1998
included in Item 14(d):

No schedules are required because the required information is not present or not
present in amounts sufficient to require submission of the schedule,  or because
the required  information is included in the financial  statements and the notes
thereto.

Listing of Exhibits

3.1  Articles  of  Incorporation  --  incorporated  by  reference  to the Fund's
Registration  Statement  on Form 10  filed  with  the  Securities  and  Exchange
Commission ("Commission") on October 13, 1984.

3.2  By-Laws, as amended to date - incorporated by reference to the Fund's 1998
        Form 10K.

3.3  Bank Loan Agreement - incorporated by reference to the Fund's December 31,
       1997 Form 10Q

10.1 Management  Agreement,  dated as of December 22, 1995,  between the Fund on
the one hand, and Westech Advisors and Siguler Guff Advisers,  on the other hand
- incorporated by reference to the Fund's 1998 Form 10K.

Reports on Form 8-K

         The Fund filed no reports  on Form 8-K with the  Commission  during the
fiscal quarter ended June 30, 1999.



o "Interested person" (as defined in the 1940 Act) of the Fund.

                                    Signatures

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

VENTURE LENDING & LEASING, INC.
(Registrant)

By:      /S/ Ronald W. Swenson                                By:      /S/
Salvador O. Gutierrez
Ronald W. Swenson                                       Salvador O. Gutierrez
Chairman and Chief Executive Officer        President, Chief Financial Officer
                                            and Chief Accounting Officer
Date:    September 29, 1999                 Date:September 29, 1999

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

                NAME                         TITLE                     DATE

By:      /S/ John F. Cogan               Director             September 29, 1999
John F. Cogan

By:      /S/ J. Michael Egan             Director             September 29, 1999
J. Michael Egan

By:      /S/ Salvador O. Gutierrez President & Director       September 29, 1999
Salvador O. Gutierrez

By:      /S/  Scott Malpass              Director             September 29, 1999
S. Scott Malpass

By:      /S/ Roger Smith                 Director             September 29, 1999
Roger Smith

By:      /S/ Arthur Spinner              Director             September 29, 1999
Arthur Spinner

By:      /S/ Ronald W. Swenson        CEO & Director          September 29, 1999
Ronald W. Swenson

By:      /S/ George Von Gehr             Director             September 29, 1999
George Von Gehr