MANAGEMENT AGREEMENT

      Agreement made as of December 22, 1995 between VENTURE LENDING & LEASING,
INC. ("Fund"), a Maryland corporation, on the one hand, and WESTECH INVESTMENT
ADVISORS, INC. ("Westech Advisors"), a California corporation, and SIGULER GUFF
& COMPANY, L.L.C. ("Siguler Guff & Company"), a Delaware limited liability
company, on the other hand. Westech Advisors and Siguler Guff & Company are
sometimes referred to collectively herein as the "Managers."

      WHEREAS the Fund is a non-diversified closed-end management investment
company that has elected status as a business development company ("BDC") under
the Investment Company Act of 1940 ("1940 Act"); and

      WHEREAS each Manager is an investment adviser registered as such under the
Investment Advisers Act of 1940 ("Advisers Act"); and

      WHEREAS the Fund desires to retain the Managers to furnish certain
investment advisory, portfolio management and administrative services to the
Fund and the Managers are willing to furnish such services;

      NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:

      1. Appointment. The Fund hereby appoints Westech Advisors as Investment
Manager and Siguler Guff & Company as Fund Manager for the period and on the
terms set forth in this Agreement. Westech Advisors and Siguler Guff & Company
each accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.

      2. Investment Duties. Subject to the supervision of the Fund's Board of
Directors ("Board"), the Managers will provide a continuous investment program
for the Fund and will determine from time to time what securities and other
investments will be purchased, retained or sold by the Fund. Subject to
investment policies and guidelines established by the Board, the Managers will
identify, evaluate, structure and close the investments to be made by the Fund,
arrange debt financing for the Fund, provide portfolio management and servicing
of loans or leases held in the Fund's portfolio, and administer the Fund's
day-to-day affairs. Without limiting the generality of the foregoing, it is
understood that, as Investment Manager, Westech Advisors will have primary
responsibility for origination and servicing of venture loans and leases and
that, as Fund Manager, Siguler Guff & Company will have primary responsibility
for the organization of the Fund, oversight of Fund administration and
shareholder relations.

      3. Administrative Duties. The Managers will administer the affairs of the
Fund subject to the supervision of the Board and the following understandings:
<PAGE>

      (a) The Managers will supervise all aspects of the operations of the Fund,
including oversight of transfer agency, custodial and accounting services;
provided, however, that nothing herein contained shall be deemed to relieve or
deprive the Board of its responsibility for and control of the conduct of the
affairs of the Fund.

      (b) The Managers will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as required) of the Fund's registration
statement under the Securities Exchange Act of 1934, proxy material, tax returns
and required reports to the Fund's shareholders and the Securities and Exchange
Commission ("SEC") and other appropriate federal or state regulatory
authorities.

      (c) The Managers will oversee the computation of the net asset value and
the net income of the Fund in accordance with procedures adopted by the Board.

      (d) The Managers will maintain or oversee the maintenance of all books and
records with respect to the Fund, and will furnish the Board with such periodic
and special reports as the Board reasonably may request. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Managers hereby agree that
all records which it maintains for the Fund are the property of the Fund, agrees
to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any
records which it maintains for the Fund and which are required to be maintained
by Rule 31a-1 under the 1940 Act and further agrees to surrender promptly to the
Fund any records which it maintains for the Fund upon request by the Fund.

      (e) All cash, securities and other assets of the Fund will be maintained
in the custody of one or more banks in accordance with the provisions of Section
17(f) of the 1940 Act and the rules thereunder; the authority of the Managers to
instruct the Fund's custodian(s) to deliver and receive such cash, securities
and other assets on behalf of the Fund will be governed by a custodian agreement
between the Fund and each such custodian, and by resolution of the board of
directors of the Fund.

      4. Further Duties. In all matters relating to the performance of this
Agreement, the Managers will act in conformity with the Articles of
Incorporation and By-Laws of the Fund and with the instructions and directions
of the Board and will comply with the requirements of the 1940 Act, the rules
thereunder, and all other applicable federal and state laws and regulations.

      5. Authority of Individual Managers. Any action required or permitted to
be performed under this Agreement by the Managers may be performed by either of
Westech Advisors or Siguler Guff & Company individually. The Managers may enter
into arrangements between themselves requiring joint approval of any action or
class of actions, and will advise the Board of any such arrangement. No such
arrangement, however, will modify the liability of the Managers, which shall be
joint and several, for actions taken under this Agreement, or limit the extent
to which third parties may rely upon the authority of either Manager to act
under this Agreement.


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<PAGE>

      6. Services Not Exclusive. The services furnished by the Managers
hereunder are not to be deemed exclusive and the Managers shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. Nothing in this Agreement shall limit or restrict the
right of any director, officer or employee of the Managers, who may also be a
director, officer or employee of the Fund, to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar nature.

      7.  Expenses.

      (a) The Fund will pay all expenses (including without limitation
accounting, legal, printing, clerical, filing and other expenses) incurred by
the Fund, either of the Managers or their affiliates on behalf of the Fund in
connection with the organization of the Fund and the initial offering of its
shares. Except as otherwise expressly provided for in Section 7(b) of this
Agreement, during the term of this Agreement, the Fund will bear all of its
expenses incurred in its operations including but not be limited to the
following: (i) brokerage and commission expense and other transaction costs
incident to the acquisition and dispositions of investments and the creation and
perfection of security interests with respect thereto, (ii) federal, state and
local taxes and fees, including transfer taxes and filing fees, incurred by or
levied upon the Fund, (iii) interest charges and other fees in connection with
borrowings, (iv) SEC fees and expenses and any fees and expenses of state
securities regulatory authorities, (v) expenses of printing and distributing
reports and notices to shareholders, (vi) costs of proxy solicitation, (vii)
costs of meetings of shareholders and the Board, (viii) charges and expenses of
the Fund's custodian, transfer and dividend disbursing agent, (ix) compensation
and expenses of the Fund's directors who are not interested persons of the Fund
or the Managers, and of any of the Fund's officers who are not interested
persons of the Managers, and expenses of all directors in attending board or
shareholder meetings, (x) legal and auditing expense, including expenses
incident to the documentation for, and consummation of, venture lending and
leasing transactions and legal actions to enforce the Fund's rights under such
loans and leases; (xi) costs of any certificates representing the Shares, (xii)
costs of stationery and supplies, (xiii) the costs of membership by the Fund in
any trade organizations and (xiv) expenses associated with litigation and other
extraordinary or non-recurring expenses.

      (b) The expenses to be borne by the Managers are limited to the following:
(i) all costs and fees incident to the selection and investigation of
prospective Fund investments, such as travel expenses and professional fees (but
excluding legal and accounting fees and other costs incident to the closing,
documentation or consummation of such transactions), (ii) the cost of adequate
office space for the Fund and all necessary office equipment and services,
including telephone service, heat, utilities and similar items and (iii) the
cost of providing the Fund with such corporate, administrative and clerical
personnel (including officers and directors of the Fund who are interested
persons of the Managers and are acting in their respective capacities as
officers and directors) as the Board reasonably deems necessary or advisable to
perform the services required to be performed by the Managers under this
Agreement.


                                       3
<PAGE>

      (c) The Fund may pay directly any expenses incurred by it in its normal
operations and, if any such payment is consented to by the Managers and
acknowledged as otherwise payable by the Managers pursuant to this Agreement,
the Fund may reduce the fee payable to the Managers pursuant to Paragraph 0
thereof by such amount. To the extent that such deductions exceed the fee
payable to the Managers on any quarterly payment date, such excess shall be
carried forward and deducted in the same manner from the fee payable on
succeeding quarterly payment dates.

      (d) The payment or assumption by the Managers of any expense of the Fund
that the Managers are not required by this Agreement to pay or assume shall not
obligate the Managers to pay or assume the same or any similar expense of the
Fund on any subsequent occasion.

      8. Compensation.

      (a) For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to the Managers a fee ("Management Fee"), computed
and paid quarterly, at an annual rate of 2.5% of the amount of the Fund's
Committed Equity Capital (as defined below) as of the last day of each fiscal
quarter until the last day of the eighth full fiscal quarter following the first
closing of the Fund's initial public offering; and at an annual rate of 2.5% of
the Fund's total assets (including amounts derived from borrowed funds) as of
the last day of each fiscal quarter thereafter. The Fund's Committed Equity
Capital, as of the end of any fiscal quarter, shall be the aggregate amount of
subscription obligations for the purchase of the Fund's shares (including any
amounts of such obligations that have been satisfied) as of the end of such
fiscal quarter.

      (b) For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to the Managers an annual fee ("Incentive Fee"), in
addition to the Management Fee, calculated as provided in Annex A hereto. The
Incentive Fee will be payable as promptly as practicable following the end of
any fiscal year for which it is earned.

      (c) If this Agreement is terminated by the Fund for any reason prior to
the dissolution of the Fund and the final distribution in liquidation of all the
Fund's assets to shareholders, the Fund will pay the Managers an annual fee
("Post-Termination Fee"), in addition to any Management Fee and Incentive Fee
previously paid to or earned by the Managers, calculated as provided in Annex B
hereto; provided, however, that such Post-Termination Fee will be paid only if,
prior to the payment of any such Post-Termination Fee, the Fund receives an
opinion of its counsel to the effect that payment of the Post-Termination Fee is
permissible under the applicable provisions of the 1940 Act and the Advisers
Act, and applicable rules, regulations and interpretations of the SEC
thereunder. The Fund will consult with its counsel as to the permissibility of
the Post-Termination Fee under the 1940 Act and the Advisers Act within a
reasonable time after the Fund commences operations. If the Fund's counsel
concludes that an exemptive order or no-action relief of the SEC is required to
permit the


                                       4
<PAGE>

Fund to pay the Post-Termination Fee or to provide such counsel with adequate
assurances upon which the aforementioned opinion can be based, the Fund agrees
to seek, together with the Managers, to obtain such an exemptive order or
no-action relief within a reasonable time after the Fund commences operations.
The Post-Termination Fee will be payable as promptly as practicable following
the end of any fiscal year for which it is earned.

      (d) If this Agreement becomes effective or terminates before the end of
any fiscal quarter, the Management Fee for the period from the effective day to
the end of the fiscal quarter or from the beginning of such fiscal quarter to
the date of termination, as the case may be, shall be prorated according to the
proportion which such period bears to the full fiscal quarter in which such
effectiveness or termination occurs.

      (e) If (i) a Manager, (ii) an officer, director or employee of a Manager,
(iii) a company controlling, controlled by or under common control with a
Manager, or (iv) an officer, director or employee of any such company receives
any compensation from a company whose securities are held in the Fund's
portfolio in connection with the provision to that company of significant
managerial assistance, the compensation due to the Managers hereunder shall be
reduced by the amount of such fee. If such amounts have not been fully offset at
the time of termination of this Agreement, the Managers shall pay such excess
amounts to the Fund upon termination.

      9. Limitation of Liability of Managers. The Managers shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the Fund
in connection with the matters to which this Agreement relates except a loss
resulting from willful misfeasance, bad faith or gross negligence on their part
in the performance of their duties or from reckless disregard by them of their
obligations and duties under this Agreement. Any person, even though also an
officer, director, employee or agent of a Manager, who may be or become an
officer, director, employee or agent of the Fund shall be deemed, when rendering
services to the Fund or acting with respect to any business of the Fund, to be
rendering such service to or acting solely for the Fund and not as an officer,
director, employee, or agent or one under the control or direction of a Manager
even though paid by it.

      10. Duration and Termination.

      (a) This Agreement shall become effective upon the date hereabove written
provided that this Agreement shall not take effect unless it has first been
approved (i) by a vote of a majority of those directors of the Fund who are not
parties to this Agreement or interested persons of any such party cast in person
at a meeting called for the purpose of voting on such approval, and (ii) by vote
of a majority of the Fund's outstanding voting securities.

      (b) Unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Agreement shall continue automatically for successive periods
of twelve months each, provided that such continuance is specifically approved
at least annually (i) by a vote of a 


                                       5
<PAGE>

majority of those directors of the Fund who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the Board or by vote of a
majority of the outstanding voting securities of the Fund.

      (c) Notwithstanding the foregoing, this Agreement may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Fund on sixty days' written
notice to the Managers or by the Managers at any time, without the payment of
any penalty, on sixty days' written notice to the Fund. This Agreement will
automatically terminate in the event of its assignment.

      11. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved by vote of a majority of the Fund's outstanding voting
securities.

      12. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Maryland, without giving effect to the conflicts of
laws principles thereof, and in accordance with the 1940 Act. To the extent that
the applicable laws of the State of Maryland conflict with the applicable
provisions of the 1940 Act, the latter shall control.

      13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities",
"affiliated person", "interested person", "assignment," "broker", "investment
adviser", "national securities exchange", "net assets," "security" and
"significant managerial assistance" shall have the same meaning as such terms
have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is relaxed by a rule, regulation or order of the Securities and
Exchange Commission, whether of special or general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.


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<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.

                        VENTURE LENDING & LEASING, INC.


                        By /s/ Ronald W. Swenson
                           -------------------------------------
                           Name: Ronald W. Swenson
                           Title: Chairman


                        WESTECH INVESTMENT ADVISORS, INC.


                        By /s/ Salvador O. Gutierrez
                           -------------------------------------
                           Name: Salvador O. Gutierrez
                           Title: Senior Vice President


                        SIGULER GUFF & COMPANY, LLC


                        By /s/ George W. Siguler
                           -------------------------------------
                           Name: George W. Siguler
                           Title: Managing Director


                                       7
<PAGE>

                                     ANNEX A
                                       -to-
                              Management Agreement
                                       -of
                         Venture Lending & Leasing, Inc.

                          Calculation Of Incentive Fee

      The Managers will be entitled to receive, in addition to the Management
Fee, an annual Incentive Fee, payable as promptly as practicable after the end
of the Fund's fiscal year. The Incentive Fee is intended to result in the
payment to the Managers of an amount equal to 20% of all dividends and
distributions that would have been paid to shareholders if the Incentive Fee
were not paid, after shareholders have received dividends and distributions in
an amount equal to 100% of all amounts paid for the purchase of Shares plus a
preferred return calculated at a cumulative non-compounded annual rate of 8%.
The Incentive Fee will be calculated in accordance with the following formula;
provided, however, that if application of this formula under specific
circumstances would result in payment of an Incentive Fee inconsistent with that
described in the preceding sentence, the formula will be equitably adjusted to
permit payment of an Incentive Fee that is consistent.

Incentive Fee Formula

         20% X (Excess Distributions/0.8 - Unrealized Loss Adjustment)

      In calculating the Incentive Fee, the definitions set forth below shall
apply.

Definitions

Begin Paid-In Capital    Zero in the fiscal year in which the Fund first issues
                         Shares to subscribing shareholders; thereafter End
                         Paid-In Capital (as defined below) for the previous
                         fiscal year.

Capital Contributions    Amounts paid by shareholders for the purchase of Shares
                         during a fiscal year.

Total Distribution       All cash distributions paid or deemed paid to
                         shareholders during a fiscal year, including cash
                         distributions reinvested in additional Shares and
                         distributions paid subsequent to the end of the fiscal
                         year that are deemed for federal income tax purposes to
                         have been paid during the fiscal year.


                                       8
<PAGE>

Adjusted Paid-In Capital      (Begin Paid-In Capital + End Paid-In Capital) / 2.

Preferred Return              (Adjusted Paid-In Capital X 8%) + Preferred Return
                              Carryover (as defined below), if any.

Preferred Return Payment      The lesser of a fiscal year's (a) Total
                              Distribution or (b) Preferred Return.

Preferred Return Carryover    The greater of (a) zero or (b) Preferred Return
                              for the previous fiscal year - Preferred Return
                              Payment for the previous fiscal year.

Carryover Payment             The lesser of (a) Preferred Return Carryover, if
                              any, or (b) Total Distribution.

Cumulative Capital            The sum of all Capital from the first fiscal year 
Contributions                 in Contributionswhich the Fund first issues Shares
                              to subscribing shareholders through the end of the
                              fiscal year for which Cumulative Capital          
                              Contributions are being computed.                 

Cumulative Capital Payback    The sum of all Capital Paybacks (as defined below)
                              from the first fiscal year in which the Fund first
                              issues Shares to subscribing shareholders through
                              the end of the fiscal year prior to the fiscal
                              year for which Cumulative Capital Payback is being
                              computed.

Net Unreturned Capital        The greater of (a) zero or (b) Cumulative Capital
                              Contributions -Cumulative Capital Payback.

Capital Payback               The greater of (a) zero or (b) the lesser of (i)
                              Net Unreturned Capital or (ii) the amount
                              determined by solving the following algebraic
                              formula:

(Total Distribution - Carryover Payment) - ((2 X Begin Capital + Capital
Contributions - Capital Payback)/2 *.08) = Capital Payback


End Paid-In Capital           The greater of (a) zero or (b) Begin Paid-In
                              Capital + Capital Contribution - Capital Payback.

Excess Distribution           The greater of (a) zero or (b) Total Distribution
                              - Preferred Return Payment - Capital Payback.

Unrealized Loss               Gross long-term and short-term unrealized capital 
                              loss as of the 


                                       9
<PAGE>

                              end of the fiscal year.

Unrealized Loss Adjustment    (a) If Excess Distribution for the fiscal year is
                              zero, zero; (b) for the first fiscal year in which
                              Excess Distribution exceeds zero, Unrealized Loss
                              for that year; and (c) for subsequent fiscal
                              years, Unrealized Loss for that fiscal year -
                              Unrealized Loss for the previous fiscal year.


                                       10
<PAGE>

                                     ANNEX B
                                      -to-
                              Management Agreement
                                      -of-
                         Venture Lending & Leasing, Inc.

      Subject to the conditions set forth in the Management Agreement, if the
Management Agreement is terminated by the Fund for any reason prior to the
dissolution of the Fund and the final distribution in liquidation of all the
Fund's assets to shareholders, the Fund will pay the Managers an annual fee
("Post-Termination Fee"), in addition to any Management Fee and Incentive Fee
previously paid to or earned by the Managers, payable as promptly as practicable
after the end of the Fund's fiscal year and calculated as follows:

      1) The "Attributable Assets" of the Fund will be determined. Attributable
Assets shall be all securities or other assets held in the Fund's portfolio,
including securities receivable, as of the time of termination of the Management
Agreement, and any assets to which the Fund is or may become entitled under the
terms of any securities or other assets held in the Fund's portfolio, including
but not limited to warrants issuable under the terms of venture loans or leases,
and securities issuable upon exercise of any warrants, but excluding cash and
cash equivalents.

      2) The Post-Termination Fee shall be calculated and paid with respect to
the Attributable Assets of the Fund, in the same manner as the Incentive Fee is
calculated and paid, as though the entire Fund consisted of the Attributable
Assets as of the date of termination.

      3) Any Capital Contributions made by investors subsequent to the date of
termination shall be disregarded, and any amounts paid by the Fund to acquire
additional Attributable Assets, including but not limited to amounts paid to
fund venture loans or leases pursuant to commitments existing on the date of
termination and amounts paid on exercise of warrants, shall be treated as
additional Capital Contributions.

      4) All Total Distributions on or prior to the date of termination shall be
taken into account in calculating the Post-Termination Fee, and Total
Distributions as of the date of termination shall be deemed to include all cash
and cash equivalents held by the Fund on the date of termination.

      5) After the date of termination, Total Distributions shall be deemed to
consist of (i) the proceeds of any sale or other disposition of Attributable
Assets during the fiscal year that is recognized by the Fund for federal income
tax purposes, plus (ii) all income received or recognized in a fiscal year with
respect to Attributable Assets, including without limitation interest,
dividends, amortization of discount and accrual of residual payments, minus
(iii) an amount of the Fund's Allocable Expenses (as defined below) for the
fiscal year determined by multiplying such Allocable Expenses by a fraction, the
numerator of which is the average of 


                                       11
<PAGE>

the beginning and end values of Attributable Assets for that fiscal year and the
denominator of which is the average of the beginning and end values of the
Fund's total assets for that fiscal year. Allocable Expenses shall consist of
all Fund expenses other than accrual of the Post-Termination Fee, accrual of any
incentive fee paid to a successor manager and any management or advisory fee
paid to a successor manager to the extent any such management or advisory fee
exceeds 2.5% of the Fund's total assets less Attributable Assets.


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