Rand Capital Increases Investments

In the past 90 days, Rand Capital (Buffalo, NY) (NASDAQ: RAND) and its wholly owned subsidiary Rand Capital SBIC, L.P., has made additional investments in three portfolio companies.

Rand invested $200,000 as part of a $2,000,000 preferred stock round in Ultra-Scan Corporation (Amherst, NY) (www.ultra-scan.com). The other funds were provided by a major shareholder. The money will be used to allow the Company to ramp up its marketing plan. "Ultra-Scan continues to expand its focus from a pure biometric technology company to an Identity Management Solutions provider that focuses on delivering turnkey Identity Management solutions for government, healthcare and the financial industries. Part of the proceeds raised with this financing will continue to enable us to expand our sales efforts in these markets," said Dr. John K. Schneider, President and co-founder of Ultra-Scan.

Rand participated in a follow-on round of financing in Synacor, Inc. (Buffalo, NY) (www.synacor.com) with a $400,000 equity investment. The financing round was led by Advantage Capital Partners (New York, NY) (www.advantagecap.com). Daniel P. Penberthy, Rand's Executive Vice President, stated, "Advantage's initial investment in Synacor occurred in October 2003, following an introduction by Rand Capital. Both Advantage and Rand have provided this additional funding based on Synacor's performance and future growth opportunities in the marketplace." Also recently announcing their participation in the follow-on financing was the Intel Digital Home Fund as well as Crystal Ventures and Walden International Investment Group. Synacor provides portals and technology to Internet Service Providers (ISPs) enabling them to easily bundle a wide variety of free and paid subscription-only entertainment, educational and other services into their Internet portals. The Company has integrated over 30 content and service providers into its product platform, Portelus™. Applying the cable TV business model to the Internet, Synacor offers ISPs one of the largest catalogs of subscription service providers available from one source today. Ron Frankel, Synacor's President, stated, "The continued support of Rand and other current investors has assisted us, both financially and strategically, during this period of rapid growth."

Rand also announced that it has funded $200,000 to Somerset Gas Transmission Company, LLC (Buffalo, NY) (www.somersetgas.com) in the form of a Term Note, as part of a financing round consisting of current investors. Somerset is engaged in the development and operation of natural gas pipelines serving wholesale markets in the U.S. The funds will be utilized to continue working with markets, producers, and local distribution companies to develop new infrastructure to serve the growing demand for natural gas. Somerset's pipeline assets allow natural gas users to access supply at the Chicago Hub, an aggregation point for virtually every gas producing basin in the U.S. and Western Canada, including the Gulf Coast, Rocky Mountain, Hugoton, Permian, Alberta and when developed; the North Slope Basins. This supply diversity combined with Somerset's low cost transportation route, via such pipelines as the North Coast Gas Transmission, LLC, will allow both current and future users to access competitively priced gas supply. Daniel P. Penberthy, Rand Capital's Executive Vice President, stated, "Rand has increased its investment into Somerset as it is positioned in a strong sector, and is led by an experienced management group which will allow it to continue to raise funds and expand its right of ways and pipeline capacity to provide potentially high returns for the investor group."

Information in this press release contains forward-looking statements and reflects the Corporation's current beliefs. Numerous factors could cause actual results to differ materially. See the Corporation's Securities and Exchange Commission filings for a discussion of risks and uncertainties associated with venture capital investing that could affect actual results. Rand Capital Corporation undertakes no obligation to revise these forward-looking statements for new events and uncertainties.

CONTACT:
Allen F. Grum
716-853-0802

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