| Disruptive Innovation In addition to seeking out companies in key industries that are in the early stages of development, we seek to invest in companies that are truly entrepreneurial in the products they are developing. Disruptive innovation is a key principle that guides the investment decisions of Koch Genesis Company. Disruptive innovation can be defined as the process by which products or services are developed that are discontinuous or revolutionary in nature. This is opposed to an evolutionary innovation by which the product or service is only an incremental development. Rather than merely serving the needs of the current market through improvements of a current product or service, disruptive innovations transform demands in the market, often creating niches and altering the mainstream market. Disruptive innovations do just that – they disrupt the industry and they disrupt consumer purchasing patterns. Disruptive innovations, through the offering of completely new (as opposed to revamped) products or services, have a revolutionary impact on the marketplace. | 
