Rand Capital : January Investor Presentation

INVESTOR PRESENTATION

January 2023

Daniel P. Penberthy

President & CEO

Margaret W. Brechtel

EVP & CFO

© 2023 Rand Capital Corporation

Nasdaq: RAND

FORWARD LOOKING STATEMENTS

This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section

21E of the Securities Exchange Act of 1934, as amended. All statements, other than historical facts, including but not limited to statements regarding the expectations of Rand Capital Corporation ("Rand" or the "Company") to continue to be taxed as a regulated investment company ("RIC") for U.S. federal income tax purposes; the effectiveness of, and execution on, Rand's investment strategy and 2022 objectives; the investment processes to be used by Rand Capital Management under the investment advisory and management agreement with Rand, the competitive ability and position of Rand, the amount of the Company's dividend per share in future periods, and any assumptions underlying any of the foregoing, are forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts and are sometimes identified by the words "may," "will," "should," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "overestimate," "underestimate," "believe," "could," "project," "predict," "continue," "target" or other similar words or expressions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) the risk that Rand may be unable to continue to fulfill the conditions required in order to be treated as a RIC for U.S. federal income tax purposes; (2) evolving legal, regulatory and tax regimes; (3) changes in general economic and/or industry specific conditions; and (4) other risk factors as detailed from time to time in Rand's reports filed with the Securities and Exchange Commission ("SEC"), including Rand's annual report on Form 10-K for the year ended December 31, 2021, quarterly reports on Form 10-Q, the preliminary and definitive proxy statements and other documents filed with the SEC. Consequently, such forward-looking statements should be regarded as Rand's current plans, estimates and beliefs. Except as required by applicable law, Rand assumes no obligation to update the forward-looking information contained in this presentation.

The Company's investment activities are managed by its external investment adviser, Rand Capital Management, LLC. Additional information can be found at the Company's website where it regularly posts information: https://www.randcapital.com/.

All information contained herein is for informational purposes and should not be construed as investment advice. It does not constitute an offer, solicitation or recommendation to purchase any security. Past performance does not guarantee future results. Diversification does not guarantee a profit or protect against a loss.

© 2023 Rand Capital Corporation

Nasdaq: RAND

NASDAQ: RAND

Externally-managed Business Development Company (BDC)

Focusing our debt and related equity investments in privately-held, lower middle market companies with committed and experienced management teams in a broad variety of industries

Market Capitalization	$35.5 Million	Common Shares Outstanding	2.6 Million
52-Week Low/High	$13.04 / $18.80	Institution/Insider Ownership	11% / 67%
Recent Price	$13.76	Dividend Yield	5.8%

Market data as of January 3, 2023 [Source: S&P Capital IQ]

The Rand Building, Buffalo, NY

3

© 2023 Rand Capital Corporation

Nasdaq: RAND

TRANSFORMATION OF RAND CAPITAL

1969	1996-97	2001	2016	2019
Founded	New management	Elected to be a	Sold Gemcor for	Closed $25 million
	team replaces	Business	$15.2 million -	East Asset
	founders	Development	Largest exit in	Management
	transaction
		Company (BDC)	history
1971				Externalized
				investment
Founding				management and
member of				administration
Nasdaq, IPO

2020	2021	2022
Paid $1.62/share	Celebrated	Secured $25M
cash and stock	50 years on	senior secured
special dividend	Nasdaq	credit facility
1-for-9 reverse	Initiated
stock split	quarterly
Declared the 2020	dividends
cash dividend of
$1.33 per share in
December

Internally-managed, venture capital-oriented BDC

Externally-managed, dividend paying BDC that lends to lower middle market companies

4

© 2023 Rand Capital Corporation

Nasdaq: RAND

PORTFOLIO DISCIPLINE

Investment Criteria

Investment Structure

Investment Terms

© 2023 Rand Capital Corporation

• Revenue >$2 million and EBITDA $0 to $5 million
• Early to late-stage private businesses
• Sustainable, differentiated market-accepted product
• Skilled, motivated and invested management
• Broad, diverse industries with East, South or Midwest U.S. operations
• Subordinated debt with warrants or preferred equity
• For expansion capital, growth or ownership transition
• Co-investorwith institutional funds; minority owner
• Current interest combined with payment in kind instruments
• Initial target size of $2 million
• Typically $750,000 to $5 million investments
• Require board observation, informational rights or board seat
• Typically 5-year hold period

5

Nasdaq: RAND