Rand Capital : Conference Call Presentation FY 2023

FOURTH QUARTER AND

FULL YEAR 2023

FINANCIAL RESULTS

March 5, 2024

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 2024 objectives; the investment processes used by its external investment adviser, Rand Capital Management, LLC 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, 2023, 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.

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© 2023 Rand Capital Corporation

Nasdaq: RAND

STRONG EXECUTION

(Results compared with the prior-year period unless otherwise noted)

• Portfolio expansion centered on debt investments drove income growth
• • Q4 total investment income increased 11% to $1.9 million over the prior-year period
  • Full year 2023 total investment income grew 27% to $7.3 million
• Net asset value per share was $23.56 at year-end, up 5% from 20221
• Rand's portfolio had a fair value of $77.1 million at year-end, up 25% from year-end 2022
• Invested $20.3 million across nine transactions in 2023
• • Completed two follow-on investments in the fourth quarter
• Entered 2024 with a strong and flexible balance sheet, and a solid pipeline of opportunities
• • Total liquidity of ~$19.4 million at year-end2

1. Net asset value per share amounts based on weighted average shares outstanding
2. Consists of cash, value of publicly traded BDCs and ACV Auctions stock, and senior secured revolving credit facility availability

© 2023 Rand Capital Corporation

The Rand Building, Buffalo, NY

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Nasdaq: RAND

DELIVERING CASH DIVIDENDS

(Results compared with the prior-year period unless otherwise noted)

• Paid Q4 2023 dividends of $0.63 per share
• • Consisting of regular quarterly dividend of $0.25 per share and a special dividend of $0.38 per share
• During 2023, paid total dividends of $1.33 per share, an increase of 60% over 2022
• • Included one raise of our regular quarterly dividend earlier in the year and the special dividend
• On February 26, 2024, declared regular quarterly cash dividend distribution of $0.25 per share
• • To be paid on or about March 29, 2024, to shareholders of record as of March 13, 2024

© 2023 Rand Capital Corporation

Dividends Paid per Share

$1.33

$0.83

$0.44

2021

2022

2023

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Nasdaq: RAND

PORTFOLIO MIX

Fair Value Portfolio Mix

($ in millions)

	$77.1
$61.5	$7.3
$6.4	$20.5
$20.9
$34.2	$49.3
2022	2023

Portfolio Mix

(# of Companies)

2930

6	6
9	7

1417

20222023

	Debt		Equity		Publicly Traded Stock

© 2023 Rand Capital Corporation

Fair value increase reflects new and follow-on investments, and valuation adjustments on several portfolio companies

Mix at quarter-end, based on fair value:

64% Fixed-rate debt investments

27% Equity investments in private companies

9% Publicly traded equities (includes dividend paying BDCs and ACV Auctions stock)

Annualized weighted average yield of debt investments, which includes PIK interest, was 13.6%

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Nasdaq: RAND

PORTFOLIO ACTIVITY

Q4 2023 Investments

Provides design, distribution and installation services for commercial kitchens, renovations and new builds

Funded follow-on debt investment of

$2.2 million

Offers a wide range of high-quality,

affordable pet products

Funded follow-on equity investment of

$73,000

Notable Full Year Investments and Exits

Invested a total of $20.3 million across nine transactions, which largely consisted of interest yielding assets

© 2023 Rand Capital Corporation

DSD was sold in June 2023 - In total, RAND received $6.7 million of proceeds, which included a net gain of $2.5 million

Sold shares for a realized gain of $1.7 million

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Nasdaq: RAND

DIVERSIFIED PORTFOLIO

Investments by Industry Classification

December 31, 2023

Automotive

Public BDC 4%

Stocks 5%

Distribution

December 31, 2022

Public BDC

Stocks

Software 6%

6%

10%

Professional Services

Software 8%	Professional Services
	42%
Consumer Products
13%

Manufacturing

22%

Based on total investments at fair value of $77.1 million

© 2023 Rand Capital Corporation

Automotive31% 13%

Consumer
Products	Manufacturing
16%	23%

Based on total investments at fair value of $61.5 million

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Nasdaq: RAND

TOP FIVE PORTFOLIO INVESTMENTS

($ in millions)

Company	Investments at	Year	Industry	% of Total	Investment Type
Fair Value	Acquired	Portfolio
			Professional Services - Cellular		Equity -
Tilson	$10.6	2015	info systems, construction,	14%
paying dividend
			mgmt.
Food Service			Professional Services -		Term note
$7.4	2022	Services for commercial	10%	(12%)
Supply
		kitchens and new builds		Equity
					Term note
Seybert's	$6.0	2021	Consumer Product - Billiard	8%	(12% plus 2% PIK)
supplies
				Warrant
					Term note
SciAps, Inc.	$5.2	2013	Manufacturing -	7%	(12%)
Portable analytical instruments
				Equity
			Distribution - Stocking		Term note
INEA	$4.3	2023	distributor of alloys and	6%	(12% plus 2% PIK)
			electronic grade nickels		Equity
Total Top 5	$33.5			45%

All values as of December 31, 2023. Totals may not foot due to rounding.

$77.1 million portfolio fair value with 30 portfolio companies

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© 2023 Rand Capital Corporation

Nasdaq: RAND

FINANCIAL REVIEW

© 2023 Rand Capital Corporation

Nasdaq: RAND

FOURTH QUARTER FINANCIAL SUMMARY

($ in thousands, except per share data)

		Q4 2023		Q4 2022
Total investment income	$	1,930	$	1,733
Total expenses		1,014		371
Net investment income¹		962		1,230
Net investment income per share²	$	0.37	$	0.48
Adjusted net investment income per share³	$	0.40	$	0.41
Net realized and unrealized gain (loss)	$	127	$	(910)
on investments
Net increase in net assets from operations		1,089		320
Net increase in net assets from operations	$	0.42	$	0.12
per share²

Total investment income grew 11%

• Driven by a 47% increase in interest from portfolio companies

Total expenses increase reflects higher interest expense and change in accrued capital gains incentive fees

Excluding the capital gains incentive fees, adjusted expenses in Q4 23 were

$950,000 compared with $539,000 in Q4 22³

¹ Net of income tax expense

² Per share amounts based on weighted average shares outstanding of 2,581,021 in Q4 2023 and in Q4 2022.

• Adjusted Net Investment Income per share and Adjusted Expenses are non-GAAP financial measures. Please see supplemental slides for a description of these non-GAAP financial measures and reconciliation tables between GAAP and non-GAAP.

© 2023 Rand Capital Corporation

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Nasdaq: RAND