##### Table of Contents





SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549





FORM 10-Q





(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | ----------------------------------------------------------------------------------------

For the quarterly period ended January 31, 2008

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- | -----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number 000-29665





EXCELSIOR VENTURE PARTNERS III, LLC

(Exact Name of Registrant as Specified in
Its Charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|DELAWARE                                                       |  | 13-4102528                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)



|                                         |  |           
|---------------------------------------- |  | ----------
|225 High Ridge Road, Stamford, CT        |  | 06905     
|(Address of Principal Executive Offices) |  | (Zip Code)

Registrants Telephone Number, Including Area Code (203) 352-4400



Former Name, Former Address and Former Fiscal Year, if Changed Since last Report.





Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈

Indicate by check mark whether the Registrant is a large accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large filer in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filer   ̈    Accelerated file   ̈    Non-accelerated filer  x

Indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ̈    No  x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12,13 or 15(d) of the Securities Exchange Act subsequent to the distribution of securities under a plan confirmed by a court.    Yes   ̈    No   ̈









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##### Table of Contents

EXCELSIOR VENTURE PARTNERS III, LLC

Excelsior Venture Partners III, LLCs (the Companys)
prospects, including the prospects of its underlying investments, are subject to certain uncertainties and risks. This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the federal securities laws that
also involve substantial uncertainties and risks. The future results of the Company and its underlying investments may differ materially from its historical results and actual results could differ materially from those projected in forward-looking
statements as a result of certain risk factors. Readers should pay particular attention to the considerations described in the section of this report entitled Managements Discussion and Analysis of Financial Conditions and Results of
Operations. Readers should also carefully review the risk factors described in the other documents the Company files, or has filed, from time to time with the Securities and Exchange Commission.



|         |  |                                                                                                       |  |         
|-------- |  | ----------------------------------------------------------------------------------------------------- |  | --------
|         |  |                                                                                                       |  | PAGE NO.
|         |  | INDEX                                                                                                 |  |         
|         |  |                                                                                                      
|PART I.  |  | FINANCIAL INFORMATION                                                                                 |  |         
|         |  |                                                                                                      
|Item 1.  |  | Financial Statements.                                                                                 |  | 1       
|         |  |                                                                                                      
|         |  | Portfolio of Investments at January 31, 2008 and October 31, 2007.                                    |  | 1       
|         |  |                                                                                                      
|         |  | Statements of Assets and Liabilities at January 31, 2008 and October 31, 2007.                        |  | 5       
|         |  |                                                                                                      
|         |  | Statements of Operations for the three months ended January 31, 2008 and January 31, 2007.            |  | 6       
|         |  |                                                                                                      
|         |  | Statements of Changes in Net Assets for the three months ended January 31, 2008 and January 31, 2007. |  | 7       
|         |  |                                                                                                      
|         |  | Statements of Cash Flows for the three months ended January 31, 2008 and January 31, 2007.            |  | 8       
|         |  |                                                                                                      
|         |  | Financial Highlights for the three months ended January 31, 2008 and January 31, 2007.                |  | 9       
|         |  |                                                                                                      
|         |  | Notes to Financial Statements.                                                                        |  | 10      
|         |  |                                                                                                      
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations.                |  | 20      
|         |  |                                                                                                      
|Item 3.  |  | Quantitative and Qualitative Disclosures about Market Risk.                                           |  | 22      
|         |  |                                                                                                      
|Item 4.  |  | Controls and Procedures.                                                                              |  | 22      
|         |  |                                                                                                      
|PART II. |  | OTHER INFORMATION                                                                                     |  | 23      
|         |  |                                                                                                      
|Item 1.  |  | Legal Proceedings.                                                                                    |  | 23      
|         |  |                                                                                                      
|Item 2.  |  | Changes in Securities and Use of Proceeds.                                                            |  | 23      
|         |  |                                                                                                      
|Item 3.  |  | Defaults Upon Senior Securities.                                                                      |  | 23      
|         |  |                                                                                                      
|Item 4.  |  | Submission of Matters to a Vote of Security Holders.                                                  |  | 23      
|         |  |                                                                                                      
|Item 5.  |  | Other Information.                                                                                    |  | 23      
|         |  |                                                                                                      
|Item 6.  |  | Exhibits and Reports on Form 8-K.                                                                     |  | 23      



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##### Table of Contents

Excelsior Venture Partners III, LLC

Portfolio of Investments January 31, 2008 (Unaudited)



|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|---------------------- |  | --------------------------------------------------- |  | ------------------ |  | ---------- |  | ------------------ |  | ------------------ | -
|PrincipalAmount/Shares |  |                                                     |  | AcquisitionDate ## |  | Cost       |  | FairValue (Note 1) |  | % of NetAssets *** |  
|                       |  | MONEY MARKET INSTRUMENTS                            |  |                    |  |            |  |                    |  |                    |  
|11,635,000             |  | Federal Home Loan Bank Discount Note 1.75%, 2/01/08 |  |                    |  | 11,634,434 |  | 11,634,434         |  | 15.52              | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | PUBLIC COMPANIES #                                  |  |                    |  |            |  |                    |  |                    |  
|                       |  | Common Stocks                                       |  |                    |  |            |  |                    |  |                    |  
|                       |  | Life Sciences **                                    |  |                    |  |            |  |                    |  |                    |  
|714,869                |  | Genoptix, Inc. (GXDX)                               |  | 07/03 - 05/05      |  | 3,124,453  |  | 20,705,754         |  | 27.63              | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | TOTAL COMMON STOCK - PUBLIC COMPANIES               |  |                    |  | 3,124,453  |  | 20,705,754         |  | 27.63              | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  |                                                     |  |                    | 
|                       |  | PRIVATE COMPANIES **                                |  |                    |  |            |  |                    |  |                    |  
|                       |  | Common Stocks #                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | Optical @                                           |  |                    |  |            |  |                    |  |                    |  
|6,025,313              |  | OpVista, Inc.                                       |  | 06/06 - 12/07      |  | 13,649,206 |  |                   |  | 0.00               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | TOTAL COMMON STOCK - PRIVATE COMPANIES              |  |                    |  | 13,649,206 |  |                   |  | 0.00               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | Preferred Stocks #                                  |  |                    |  |            |  |                    |  |                    |  
|                       |  | Enterprise Software @                               |  |                    |  |            |  |                    |  |                    |  
|8,940,298              |  | LogicLibrary, Inc., Series A                        |  | 01/02 - 11/07      |  | 4,087,685  |  | 4,087,685          |  | 5.45               | %
|3,080,464              |  | LogicLibrary, Inc., Series A-1                      |  | 08/03 - 05/04      |  | 1,408,450  |  | 1,408,450          |  | 1.88               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  |                                                     |  |                    |  | 5,496,135  |  | 5,496,135          |  | 7.33               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | Life Sciences                                       |  |                    |  |            |  |                    |  |                    |  
|1,999,999              |  | Archemix Corporation, Series A                      |  | 08/02 - 11/03      |  | 1,999,999  |  | 2,499,999          |  | 3.34               | %
|700,000                |  | Archemix Corporation, Series B                      |  | 03/04 - 12/05      |  | 700,000    |  | 875,000            |  | 1.17               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  |                                                     |  |                    |  | 2,699,999  |  | 3,374,999          |  | 4.51               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | Medical Technology @                                |  |                    |  |            |  |                    |  |                    |  
|4,166,667              |  | Tensys Medical, Inc., Series C                      |  | 03/02              |  | 5,000,000  |  | 438,397            |  | 0.58               | %
|1,187,500              |  | Tensys Medical, Inc., Series D                      |  | 05/04              |  | 1,425,000  |  | 124,943            |  | 0.17               | %
|318,845                |  | Tensys Medical, Inc., Series E                      |  | 07/06 - 12/07      |  | 403,364    |  | 1,147,842          |  | 1.53               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  |                                                     |  |                    |  | 6,828,364  |  | 1,711,182          |  | 2.28               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | Optical @                                           |  |                    |  |            |  |                    |  |                    |  
|1,674,078              |  | OpVista, Inc., Series AA                            |  | 06/06 - 01/07      |  | 966,605    |  | 626,896            |  | 0.84               | %
|132,200                |  | OpVista, Inc., Series BB                            |  | 03/07 - 04/07      |  | 94,426     |  | 49,505             |  | 0.07               | %
|3,418,748              |  | OpVista, Inc., Series CC                            |  | 12/07              |  | 683,075    |  | 1,025,624          |  | 1.37               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  |                                                     |  |                    |  | 1,744,106  |  | 1,702,025          |  | 2.28               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | Wireless @                                          |  |                    |  |            |  |                    |  |                    |  
|4,433,333              |  | Ethertronics, Inc. Series B                         |  | 06/01 - 05/04      |  | 6,650,000  |  | 6,650,000          |  | 8.87               | %
|1,697,957              |  | Ethertronics, Inc. Series C                         |  | 05/05 - 04/07      |  | 2,546,936  |  | 2,546,937          |  | 3.40               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  |                                                     |  |                    |  | 9,196,936  |  | 9,196,937          |  | 12.27              | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | TOTAL PREFERRED STOCKS - PRIVATE COMPANIES          |  |                    |  | 25,965,540 |  | 21,481,278         |  | 28.67              | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | Warrants #, @                                       |  |                    |  |            |  |                    |  |                    |  
|                       |  | Wireless                                            |  |                    |  |            |  |                    |  |                    |  
|271,247                |  | Ethertronics, Inc. Series C (expiration date 01/09) |  | 05/05 - 07/06      |  |           |  |                   |  | 0.00               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | Optical                                             |  |                    |  |            |  |                    |  |                    |  
|675,313                |  | OpVista, Inc., Series CC (expiration date 10/12)    |  |                    |  | 675        |  | 675                |  | 0.00               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | TOTAL WARRANTS - PRIVATE COMPANIES                  |  |                    |  | 675        |  | 675                |  | 0.00               | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  
|                       |  | TOTAL - PRIVATE COMPANIES                           |  |                    |  | 39,615,421 |  | 21,481,953         |  | 28.67              | %
|                       |  |                                                     |  |                    |  |            |  |                    |  |                    |  

The accompanying notes are an integral part of these Financial Statements.



1



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##### Table of Contents

Excelsior Venture Partners III, LLC

Portfolio of Investments January 31, 2008 (Unaudited)



|             |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|------------ |  | ------------------------------------------------------------ |  | ------------------ |  | ---------- |  | ------------------ | ---------- | ------------------ | ------ | -
|PercentOwned |  |                                                              |  | AcquisitionDate ## |  | Cost       |  | Fair Value(Note 1) |            | % of NetAssets *** |       
|             |  | PRIVATE INVESTMENT FUNDS **, #                               |  |                    |  |            |  |                    |            |                    |        |  
|0.39%        |  | Advanced Technology Ventures VII, L.P.                       |  | 08/01-01/08        |  | 1,785,404  |  |                    | 2,115,170  |                    | 2.82   | %
|1.58%        |  | Burrill Life Sciences Capital Fund                           |  | 12/02-12/07        |  | 1,963,009  |  |                    | 2,011,674  |                    | 2.69   | %
|1.35%        |  | CHL Medical Partners II, L.P.                                |  | 01/02-12/07        |  | 1,456,857  |  |                    | 1,459,661  |                    | 1.95   | %
|1.04%        |  | CMEA Ventures VI, L.P.                                       |  | 12/03-11/07        |  | 1,683,017  |  |                    | 2,783,547  |                    | 3.71   | %
|0.36%        |  | Morgenthaler Partners VII, L.P.                              |  | 07/01-10/07        |  | 1,733,167  |  |                    | 1,684,065  |                    | 2.25   | %
|0.58%        |  | Prospect Venture Partners II, L.P.                           |  | 06/01-12/07        |  | 1,354,274  |  |                    | 1,759,698  |                    | 2.35   | %
|0.98%        |  | Sevin Rosen Fund IX, L.P.                                    |  | 10/04-12/07        |  | 1,251,609  |  |                    | 1,404,074  |                    | 1.87   | %
|2.36%        |  | Tallwood II, L.P.                                            |  | 12/02-12/07        |  | 2,440,444  |  |                    | 1,823,691  |                    | 2.43   | %
|1.70%        |  | Valhalla Partners, L.P.                                      |  | 10/03-12/07        |  | 1,888,478  |  |                    | 2,169,150  |                    | 2.89   | %
|             |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|             |  | TOTAL PRIVATE INVESTMENT FUNDS                               |  |                    |  | 15,556,259 |  |                    | 17,210,730 |                    | 22.96  | %
|             |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|             |  |                                                              |  |                    | 
|Shares       |  |                                                              |  |                    |  |            |  |                    |            |                    |       
|             |  | INVESTMENT COMPANIES                                         |  |                    |  |            |  |                    |            |                    |        |  
|984,128      |  | Dreyfus Government Cash Management Fund Institutional Shares |  |                    |  | 984,128    |  |                    | 984,128    |                    | 1.31   | %
|             |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|             |  | TOTAL INVESTMENTS                                            |  |                    |  | 70,914,695 |  |                    | 72,016,999 |                    | 96.09  | %
|             |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|             |  | OTHER ASSETS & LIABILITIES (NET)                             |  |                    |  |            |  |                    | 2,932,600  |                    | 3.91   | %
|             |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|             |  | NET ASSETS                                                   |  |                    |  |            |  | $                  | 74,949,599 |                    | 100.00 | %
|             |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  



|** | Restricted as to public resale and illiquid securities. Total cost of restricted and illiquid securities at January 31, 2008 was $58,296,133. Total fair value of restricted and
illiquid securities owned at January 31, 2008 was $59,398,437 or 79.26% of net assets.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|# | Non-income producing securities.
|- | --------------------------------

|@ | At January 31, 2008, the Company owned 5% or more of the companys outstanding shares thereby making the company an affiliate as defined by the Investment Company Act of
1940, as amended (the Investment Company Act). Total fair value of affiliated securities owned at January 31, 2008 (including investments in controlled affiliates) was $18,106,954 or 24.16% of Net Assets.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|## | Disclosure is required for restricted securities only.
|-- | ------------------------------------------------------

|*** | Based on Fair Value.
|--- | --------------------

The accompanying notes are an
integral part of these Financial Statements.



2



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##### Table of Contents

Excelsior Venture Partners III, LLC

Portfolio of Investments October 31, 2007 (Audited)



|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|---------------------- |  | ---------------------------------------------------- |  | ------------------ |  | ---------- |  | ------------------ |  | ------------------ | -
|PrincipalAmount/Shares |  |                                                      |  | AcquisitionDate ## |  | Cost       |  | FairValue (Note 1) |  | % of NetAssets *** |  
|                       |  | MONEY MARKET INSTRUMENTS                             |  |                    |  |            |  |                    |  |                    |  
|10,385,000             |  | Federal Home Loan Bank Discount Note 4.40%, 11/01/07 |  |                    |  | 10,383,731 |  | 10,383,731         |  | 14.35              | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | PUBLIC COMPANIES #                                   |  |                    |  |            |  |                    |  |                    |  
|                       |  | Common Stocks                                        |  |                    |  |            |  |                    |  |                    |  
|                       |  | Wireless                                             |  |                    |  |            |  |                    |  |                    |  
|5,338                  |  | Citrix Systems, Inc. (CTXS)                          |  |                    |  | 226,011    |  | 229,481            |  | 0.32               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | Capital Equipment                                    |  |                    |  |            |  |                    |  |                    |  
|12,059                 |  | Acme Packet, Inc. (APKT)                             |  |                    |  | 160,803    |  | 173,168            |  | 0.24               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | Life Sciences **                                     |  |                    |  |            |  |                    |  |                    |  
|714,870                |  | Genoptix, Inc. (GXDX)                                |  | 07/03 - 05/05      |  | 3,124,453  |  | 10,594,373         |  | 14.64              | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | TOTAL - PUBLIC COMPANIES COMMON STOCK                |  |                    |  | 3,511,267  |  | 10,997,022         |  | 15.20              | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | PRIVATE COMPANIES **                                 |  |                    |  |            |  |                    |  |                    |  
|                       |  | Common Stocks #                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | Capital Equipment @                                  |  |                    |  |            |  |                    |  |                    |  
|157,396                |  | MIDAS Vision Systems, Inc.                           |  | 03/03              |  | 4,000,000  |  |                   |  | 0.00               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | Optical @                                            |  |                    |  |            |  |                    |  |                    |  
|1,079,541              |  | OpVista, Inc.                                        |  | 06/06              |  | 9,184,030  |  | 1,184,567          |  | 1.64               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | TOTAL COMMON STOCKS - PRIVATE COMPANIES              |  |                    |  | 13,184,030 |  | 1,184,567          |  | 1.64               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | Preferred Stocks #                                   |  |                    |  |            |  |                    |  |                    |  
|                       |  | Capital Equipment @                                  |  |                    |  |            |  |                    |  |                    |  
|933,593                |  | MIDAS Vision Systems, Inc., Series A-1               |  | 03/03              |  | 1,054,960  |  |                   |  | 0.00               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | Enterprise Software @                                |  |                    |  |            |  |                    |  |                    |  
|8,751,782              |  | LogicLibrary, Inc., Series A                         |  | 01/02 - 09/07      |  | 4,001,492  |  | 4,001,492          |  | 5.53               | %
|3,080,464              |  | LogicLibrary, Inc., Series A-1                       |  | 08/03 - 05/04      |  | 1,408,450  |  | 1,408,450          |  | 1.95               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  |                                                      |  |                    |  | 5,409,942  |  | 5,409,942          |  | 7.48               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | Life Sciences                                        |  |                    |  |            |  |                    |  |                    |  
|1,999,999              |  | Archemix Corporation, Series A                       |  | 08/02 - 11/03      |  | 1,999,999  |  | 2,999,999          |  | 4.15               | %
|700,000                |  | Archemix Corporation, Series B                       |  | 03/04 - 12/05      |  | 700,000    |  | 1,050,001          |  | 1.45               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  |                                                      |  |                    |  | 2,699,999  |  | 4,050,000          |  | 5.60               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | Medical Technology @                                 |  |                    |  |            |  |                    |  |                    |  
|4,166,667              |  | Tensys Medical, Inc., Series C                       |  | 03/02              |  | 5,000,000  |  | 534,026            |  | 0.74               | %
|1,187,500              |  | Tensys Medical, Inc., Series D                       |  | 05/04              |  | 1,425,000  |  | 152,197            |  | 0.21               | %
|96,629                 |  | Tensys Medical, Inc., Series E                       |  | 07/06 - 04/07      |  | 115,954    |  | 347,865            |  | 0.48               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  |                                                      |  |                    |  | 6,540,954  |  | 1,034,088          |  | 1.43               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | Optical @                                            |  |                    |  |            |  |                    |  |                    |  
|5,683,906              |  | OpVista, Inc., Series AA                             |  | 06/06 - 01/07      |  | 5,034,407  |  | 6,236,892          |  | 8.62               | %
|433,400                |  | OpVista, Inc., Series BB                             |  | 03/07 - 04/07      |  | 491,800    |  | 491,800            |  | 0.68               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  |                                                      |  |                    |  | 5,526,207  |  | 6,728,692          |  | 9.30               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | Wireless @                                           |  |                    |  |            |  |                    |  |                    |  
|4,433,333              |  | Ethertronics, Inc. Series B                          |  | 06/01 - 05/04      |  | 6,650,000  |  | 6,650,000          |  | 9.19               | %
|1,697,957              |  | Ethertronics, Inc. Series C                          |  | 05/05 - 04/07      |  | 2,546,936  |  | 2,546,937          |  | 3.52               | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  |                                                      |  |                    |  | 9,196,936  |  | 9,196,937          |  | 12.71              | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  
|                       |  | TOTAL PREFERRED STOCKS                               |  |                    |  | 30,428,998 |  | 26,419,659         |  | 36.52              | %
|                       |  |                                                      |  |                    |  |            |  |                    |  |                    |  

The accompanying notes are an integral part of these Financial Statements.



3



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##### Table of Contents

Excelsior Venture Partners III, LLC

Portfolio of Investments October 31, 2007 (Audited)



|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|---------------------- |  | ------------------------------------------------------------ |  | ------------------ |  | ---------- |  | ------------------ | ---------- | ------------------ | ------ | -
|PrincipalAmount/Shares |  |                                                              |  | AcquisitionDate ## |  | Cost       |  | FairValue (Note 1) |            | % of NetAssets *** |       
|                       |  | PRIVATE COMPANIES ** - (continued)                           |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | Notes @                                                      |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | Optical                                                      |  |                    |  |            |  |                    |            |                    |        |  
|237,321                |  | NanoOpto Corp, 10% Bridge Note, in default                   |  | 03/07              |  | 237,321    |  |                    | 160,000    |                    | 0.22   | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | Optical @                                                    |  |                    |  |            |  |                    |            |                    |        |  
|675,989                |  | OpVista, Inc., 8% Bridge Note, April 2008, #                 |  | 10/07              |  | 675,989    |  |                    | 1,351,978  |                    | 1.87   | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | TOTAL NOTES                                                  |  |                    |  | 913,310    |  |                    | 1,511,978  |                    | 2.09   | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | Warrants #, @                                                |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | Wireless                                                     |  |                    |  |            |  |                    |            |                    |        |  
|271,247                |  | Ethertronics, Inc. Series C (expiration date 01/09)          |  | 05/05 - 07/06      |  |           |  |                    |           |                    | 0.00   | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | Optical @                                                    |  |                    |  |            |  |                    |            |                    |        |  
|675,313                |  | OpVista, Inc., Series CC (expiration date 10/12)             |  |                    |  |           |  |                    |           |                    | 0.00   | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | TOTAL WARRANTS                                               |  |                    |  |           |  |                    |           |                    | 0.00   | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | TOTAL - PRIVATE COMPANIES                                    |  |                    |  | 44,526,338 |  |                    | 29,116,204 |                    | 40.25  | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  |                                                              |  |                    | 
|Percent Owned          |  |                                                              |  |                    |  |            |  |                    |            |                    |       
|                       |  | PRIVATE INVESTMENT FUNDS **, #                               |  |                    |  |            |  |                    |            |                    |        |  
|0.39%                  |  | Advanced Technology Ventures VII, L.P.                       |  | 08/01 - 09/07      |  | 1,650,405  |  |                    | 1,986,022  |                    | 2.75   | %
|1.58%                  |  | Burrill Life Sciences Capital Fund                           |  | 12/02 - 10/07      |  | 1,920,303  |  |                    | 1,722,901  |                    | 2.38   | %
|1.35%                  |  | CHL Medical Partners II, L.P.                                |  | 01/02 - 10/07      |  | 1,326,857  |  |                    | 1,432,494  |                    | 1.98   | %
|1.04%                  |  | CMEA Ventures VI, L.P.                                       |  | 12/03 - 06/07      |  | 1,563,017  |  |                    | 2,114,538  |                    | 2.92   | %
|0.36%                  |  | Morgenthaler Partners VII, L.P.                              |  | 07/01 - 10/07      |  | 1,749,476  |  |                    | 1,697,580  |                    | 2.35   | %
|0.58%                  |  | Prospect Venture Partners II, L.P.                           |  | 06/01 - 05/07      |  | 1,561,766  |  |                    | 2,194,662  |                    | 3.03   | %
|0.98%                  |  | Sevin Rosen Fund IX, L.P.                                    |  | 10/04 - 08/07      |  | 1,528,989  |  |                    | 1,734,616  |                    | 2.40   | %
|2.36%                  |  | Tallwood II, L.P.                                            |  | 12/02 - 08/07      |  | 2,290,443  |  |                    | 1,683,388  |                    | 2.33   | %
|1.70%                  |  | Valhalla Partners, L.P.                                      |  | 10/03 - 07/07      |  | 1,967,875  |  |                    | 1,990,649  |                    | 2.75   | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | TOTAL PRIVATE INVESTMENT FUNDS                               |  |                    |  | 15,559,131 |  |                    | 16,556,850 |                    | 22.89  | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  |                                                              |  |                    | 
|Shares                 |  |                                                              |  |                    |  |            |  |                    |            |                    |       
|                       |  | INVESTMENT COMPANIES                                         |  |                    |  |            |  |                    |            |                    |        |  
|984,128                |  | Dreyfus Government Cash Management Fund Institutional Shares |  |                    |  | 984,128    |  |                    | 984,128    |                    | 1.36   | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | TOTAL INVESTMENTS                                            |  |                    |  | 74,964,595 |  |                    | 68,037,935 |                    | 94.05  | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | OTHER ASSETS & LIABILITIES (NET)                             |  |                    |  |            |  |                    | 4,304,264  |                    | 5.95   | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  
|                       |  | NET ASSETS                                                   |  |                    |  |            |  | $                  | 72,342,199 |                    | 100.00 | %
|                       |  |                                                              |  |                    |  |            |  |                    |            |                    |        |  



|** | Restricted as to public resale and illiquid securities. Total cost of restricted and illiquid securities at October 31, 2007 was $63,209,922. Total fair value of restricted and
illiquid securities owned at October 31, 2007 was $56,267,427 or 77.78% of net assets.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|# | Non-income producing securities.
|- | --------------------------------

|@ | At October 31, 2007, the Company owned 5% or more of the companys outstanding shares thereby making the company an affiliate as defined by the Investment Company Act.
Total fair value of affiliated securities owned at October 31, 2007 (including investments in controlled affiliates) was $25,066,204 or 34.64% of Net Assets.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|## | Disclosure is required for restricted securities only.
|-- | ------------------------------------------------------

|*** | Based on Fair Value.
|--- | --------------------

The accompanying notes are an
integral part of these Financial Statements.



4



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##### Table of Contents

Excelsior Venture Partners III, LLC

Statements of Assets and Liabilities



|                                                                                                |  |                             |            |                           |   |            |  
|----------------------------------------------------------------------------------------------- |  | --------------------------- | ---------- | ------------------------- | - | ---------- | -
|                                                                                                |  | January 31, 2008(Unaudited) |            | October 31, 2007(Audited) |  
|ASSETS:                                                                                         |  |                             |            |                           |   |            |  
|Unaffiliated Issuers at fair value (Cost $33,999,273 and $33,138,256 respectively)              |  | $                           | 53,910,045 |                           | $ | 42,971,731 |  
|Non-Controlled Affiliated Issuers at fair value (Cost $36,915,422 and $41,826,339 respectively) |  |                             | 18,106,954 |                           |   | 25,066,204 |  
|                                                                                                |  |                             |            |                           |   |            |  
|Investments, at fair value (Cost $70,914,695 and $74,964,595 respectively) (Note 1)             |  |                             | 72,016,999 |                           |   | 68,037,935 |  
|                                                                                                |  |                             |            |                           |   |            |  
|Cash and cash equivalents (Note 1)                                                              |  |                             | 3,241      |                           |   | 26,240     |  
|Receivables from sale of investments                                                            |  |                             | 521,998    |                           |   | 2,275,482  |  
|Restricted cash (Note 1)                                                                        |  |                             | 2,834,984  |                           |   | 2,672,393  |  
|Interest receivable                                                                             |  |                             | 3,389      |                           |   | 4,019      |  
|Prepaid insurance                                                                               |  |                             | 18,764     |                           |   |           |  
|Other assets                                                                                    |  |                             | 1,945      |                           |   | 1,945      |  
|                                                                                                |  |                             |            |                           |   |            |  
|Total Assets                                                                                    |  |                             | 75,401,320 |                           |   | 73,018,014 |  
|                                                                                                |  |                             |            |                           |   |            |  
|LIABILITIES:                                                                                    |  |                             |            |                           |   |            |  
|Management fees payable (Note 2)                                                                |  |                             | 188,873    |                           |   | 182,802    |  
|Professional fees payable                                                                       |  |                             | 108,347    |                           |   | 153,475    |  
|Deferred income (Note 1)                                                                        |  |                             | 65,000     |                           |   | 258,809    |  
|Administration fees payable (Note 2)                                                            |  |                             | 28,750     |                           |   | 28,750     |  
|Board of Managers fees payable (Note 2)                                                        |  |                             | 27,500     |                           |   | 19,500     |  
|Custody fees payable (Note 2)                                                                   |  |                             | 15,290     |                           |   | 17,002     |  
|Other payables                                                                                  |  |                             | 17,961     |                           |   | 15,477     |  
|                                                                                                |  |                             |            |                           |   |            |  
|Total Liabilities                                                                               |  |                             | 451,721    |                           |   | 675,815    |  
|                                                                                                |  |                             |            |                           |   |            |  
|NET ASSETS                                                                                      |  | $                           | 74,949,599 |                           | $ | 72,342,199 |  
|                                                                                                |  |                             |            |                           |   |            |  
|NET ASSETS consist of:                                                                          |  |                             |            |                           |   |            |  
|Members Capital(1)                                                                             |  | $                           | 73,847,295 |                           | $ | 79,268,859 |  
|Accumulated unrealized appreciation/(depreciation) on investments                               |  |                             | 1,102,304  |                           |   | (6,926,660 | )
|                                                                                                |  |                             |            |                           |   |            |  
|Total Net Assets                                                                                |  | $                           | 74,949,599 |                           | $ | 72,342,199 |  
|                                                                                                |  |                             |            |                           |   |            |  
|Units of Membership Interest Outstanding                                                        |  |                             |            |                           |   |            |  
|(Unlimited Number of no par value units authorized)                                             |  |                             | 295,210    |                           |   | 295,210    |  
|NET ASSET VALUE PER UNIT                                                                        |  | $                           | 253.89     |                           | $ | 245.05     |  
|                                                                                                |  |                             |            |                           |   |            |  



|(1) | Members Capital includes the accumulated net investment (loss), realized losses, capital contributions and capital
distributions to Members.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of these Financial Statements.



5



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##### Table of Contents

Excelsior Venture Partners III, LLC

Statements of Operations (Unaudited)



|                                                                |  |                                |            |   |      |   |            |  
|--------------------------------------------------------------- |  | ------------------------------ | ---------- | - | ---- | - | ---------- | -
|                                                                |  | Three Months Ended January 31, |           
|                                                                |  | 2008                           |            |   | 2007 |  
|INVESTMENT INCOME:                                              |  |                                |            |   |      |   |            |  
|Interest income from unaffiliated investments(1)                |  | $                              | 115,447    |   |      | $ | 168,802    |  
|Interest income from affiliated investments                     |  |                                | 9,447      |   |      |   | 32,912     |  
|Dividend income from unaffiliated investments                   |  |                                | 10,473     |   |      |   | 13,435     |  
|                                                                |  |                                |            |   |      |   |            |  
|Total Investment Income                                         |  |                                | 135,367    |   |      |   | 215,149    |  
|                                                                |  |                                |            |   |      |   |            |  
|EXPENSES:                                                       |  |                                |            |   |      |   |            |  
|Management Investment Adviser fees (Note 2)                     |  |                                | 188,873    |   |      |   | 185,643    |  
|Professional fees                                               |  |                                | 83,606     |   |      |   | 112,146    |  
|Administration fees (Note 2)                                    |  |                                | 28,750     |   |      |   | 37,917     |  
|Board of Managers fees (Note 2)                                |  |                                | 22,000     |   |      |   | 22,000     |  
|Custodian fees (Note 2)                                         |  |                                | 7,500      |   |      |   | 7,500      |  
|Insurance expense                                               |  |                                | 6,300      |   |      |   | 7,906      |  
|Miscellaneous expenses                                          |  |                                | 8,934      |   |      |   | 7,500      |  
|                                                                |  |                                |            |   |      |   |            |  
|Total Expenses                                                  |  |                                | 345,963    |   |      |   | 380,612    |  
|                                                                |  |                                |            |   |      |   |            |  
|NET INVESTMENT (LOSS)                                           |  |                                | (210,596   | ) |      |   | (165,463   | )
|                                                                |  |                                |            |   |      |   |            |  
|NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:(Note 1) |  |                                |            |   |      |   |            |  
|Net realized (loss) on affiliated investments                   |  |                                | (5,005,088 | ) |      |   | (7,392,925 | )
|Net realized (loss) on unaffiliated investments                 |  |                                | (205,880   | ) |      |   | (8,775     | )
|Net change in unrealized appreciation on investments            |  |                                | 8,028,964  |   |      |   | 5,657,048  |  
|                                                                |  |                                |            |   |      |   |            |  
|NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS          |  |                                | 2,817,996  |   |      |   | (1,744,652 | )
|                                                                |  |                                |            |   |      |   |            |  
|NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |  | $                              | 2,607,400  |   |      | $ | (1,910,115 | )
|                                                                |  |                                |            |   |      |   |            |  



|(1) | Includes interest from short-term investments.
|--- | ----------------------------------------------

The accompanying notes are an integral part of these Financial Statements.



6



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##### Table of Contents

Excelsior Venture Partners III, LLC

Statements of Changes in Net Assets (Unaudited)



|                                                                |  |                                |            |   |      |   |            |  
|--------------------------------------------------------------- |  | ------------------------------ | ---------- | - | ---- | - | ---------- | -
|                                                                |  | Three Months Ended January 31, |           
|                                                                |  | 2008                           |            |   | 2007 |  
|OPERATIONS:                                                     |  |                                |            |   |      |   |            |  
|Net investment (loss)                                           |  | $                              | (210,596   | ) |      | $ | (165,463   | )
|Net realized (loss) on investments                              |  |                                | (5,210,968 | ) |      |   | (7,401,700 | )
|Net change in unrealized appreciation on investments            |  |                                | 8,028,964  |   |      |   | 5,657,048  |  
|                                                                |  |                                |            |   |      |   |            |  
|Net increase/(decrease) in net assets resulting from operations |  |                                | 2,607,400  |   |      |   | (1,910,115 | )
|                                                                |  |                                |            |   |      |   |            |  
|DISTRIBUTION TO MEMBERS:                                        |  |                                |            |   |      |   |            |  
|Distribution to Members                                         |  |                                |           |   |      |   |           |  
|                                                                |  |                                |            |   |      |   |            |  
|Total Distributions                                             |  |                                |           |   |      |   |           |  
|                                                                |  |                                |            |   |      |   |            |  
|Net increase/(decrease) in Net Assets                           |  |                                | 2,607,400  |   |      |   | (1,910,115 | )
|                                                                |  |                                |            |   |      |   |            |  
|NET ASSETS:                                                     |  |                                |            |   |      |   |            |  
|Beginning of period                                             |  |                                | 72,342,199 |   |      |   | 75,562,092 |  
|                                                                |  |                                |            |   |      |   |            |  
|End of period                                                   |  | $                              | 74,949,599 |   |      | $ | 73,651,977 |  
|                                                                |  |                                |            |   |      |   |            |  

The accompanying notes are an integral part of these Financial Statements.



7



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##### Table of Contents

Excelsior Venture Partners III, LLC

Statements of Cash Flows (Unaudited)



|                                                                                                                                     |  |                                |            |   |      |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------ | ---------- | - | ---- | - | ---------- | -
|                                                                                                                                     |  | Three Months Ended January 31, |           
|                                                                                                                                     |  | 2008                           |            |   | 2007 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                                |  |                                |            |   |      |   |            |  
|Net increase/(decrease) in net assets resulting from operations                                                                      |  | $                              | 2,607,400  |   |      | $ | (1,910,115 | )
|Adjustments to reconcile net increase/(decrease) in net assets resulting from operations to net cash (used in) operating
activities: |  |                                |            |   |      |   |            |  
|Net change in unrealized (appreciation) on investments                                                                               |  |                                | (8,028,964 | ) |      |   | (5,657,048 | )
|Purchase of investments                                                                                                              |  |                                | (1,236,876 | ) |      |   | (1,960,688 | )
|Proceeds received from the sale of investments and distributions received from private investment funds                              |  |                                | 1,326,511  |   |      |   | 1,380,088  |  
|Net realized loss on investments                                                                                                     |  |                                | 5,210,968  |   |      |   | 7,401,700  |  
|Change in short-term investments - Net                                                                                               |  |                                | (1,250,703 | ) |      |   | 1,576,740  |  
|(Increase) in restricted cash                                                                                                        |  |                                | (162,591   | ) |      |   |           |  
|Decrease/(increase) in receivables from sale of investments                                                                          |  |                                | 1,753,484  |   |      |   | (749,976   | )
|Decrease/(increase) in interest receivable                                                                                           |  |                                | 630        |   |      |   | (32,921    | )
|(Increase) in prepaid insurance                                                                                                      |  |                                | (18,764    | ) |      |   | (20,128    | )
|(Decrease) in deferred income                                                                                                        |  |                                | (193,809   | ) |      |   |           |  
|Increase/(decrease) in management fee payable                                                                                        |  |                                | 6,071      |   |      |   | (4,815     | )
|(Decrease)/increase in professional fee payable                                                                                      |  |                                | (45,128    | ) |      |   | (45,089    | )
|Increase in directors fees payable                                                                                                  |  |                                | 8,000      |   |      |   | 8,000      |  
|(Decrease) in custody fees payable                                                                                                   |  |                                | (1,712     | ) |      |   |           |  
|Increase in other payables                                                                                                           |  |                                | 2,484      |   |      |   | 13,066     |  
|                                                                                                                                     |  |                                |            |   |      |   |            |  
|Net cash (used in) operating activities                                                                                              |  |                                | (22,999    | ) |      |   | (1,186     | )
|                                                                                                                                     |  |                                |            |   |      |   |            |  
|CASH FLOWS FOR FINANCING ACTIVITIES                                                                                                  |  |                                |            |   |      |   |            |  
|Cash distributions to members                                                                                                        |  |                                |           |   |      |   |           |  
|                                                                                                                                     |  |                                |            |   |      |   |            |  
|Net cash (used in) financing activities                                                                                              |  |                                |           |   |      |   |           |  
|                                                                                                                                     |  |                                |            |   |      |   |            |  
|Net (decrease) in cash                                                                                                               |  |                                | (22,999    | ) |      |   | (1,186     | )
|                                                                                                                                     |  |                                |            |   |      |   |            |  
|Cash and cash equivalents at beginning of period                                                                                     |  |                                | 26,240     |   |      |   | 2,934      |  
|                                                                                                                                     |  |                                |            |   |      |   |            |  
|Cash and cash equivalents at end of period                                                                                           |  | $                              | 3,241      |   |      | $ | 1,748      |  
|                                                                                                                                     |  |                                |            |   |      |   |            |  
|SUPPLEMENTAL INFORMATION                                                                                                             |  |                                |            |   |      |   |            |  
|Non-cash distributions received from private investment funds (Note 1)                                                               |  | $                              | 563,864    |   |      | $ |           |  
|                                                                                                                                     |  |                                |            |   |      |   |            |  

The accompanying notes are an integral part of these Financial Statements.



8



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##### Table of Contents

Excelsior Venture Partners III, LLC

Financial Highlights (Unaudited)



|                                                                   |  |                                |        |    |      |   |        |   
|------------------------------------------------------------------ |  | ------------------------------ | ------ | -- | ---- | - | ------ | --
|                                                                   |  | Three Months Ended January 31, |       
|                                                                   |  | 2008                           |        |    | 2007 |  
|Per Unit Operating Performance: (1)                                |  |                                |        |    |      |   |        |   
|                                                                   |  |                               
|NET ASSET VALUE, BEGINNING OF PERIOD                               |  | $                              | 245.05 |    |      | $ | 255.96 |   
|INCOME FROM INVESTMENT OPERATIONS:                                 |  |                                |        |    |      |   |        |   
|Net investment (loss)                                              |  |                                | (0.71  | )  |      |   | (0.56  | ) 
|Net realized and unrealized gain/(loss) on investment transactions |  |                                | 9.55   |    |      |   | (5.91  | ) 
|                                                                   |  |                                |        |    |      |   |        |   
|Net increase/(decrease) in net assets resulting from operations    |  |                                | 8.84   |    |      |   | (6.47  | ) 
|                                                                   |  |                                |        |    |      |   |        |   
|Total Distributions to Members                                     |  |                                |       |    |      |   |       |   
|                                                                   |  |                                |        |    |      |   |        |   
|NET ASSET VALUE, END OF PERIOD                                     |  | $                              | 253.89 |    |      | $ | 249.49 |   
|                                                                   |  |                                |        |    |      |   |        |   
|TOTAL NET ASSET VALUE RETURN (2), (5)                              |  |                                | 3.60   | %  |      |   | (2.53  | )%
|                                                                   |  |                                |        |    |      |   |        |   
|RATIOS AND SUPPLEMENTAL DATA (3)                                   |  |                                |        |    |      |   |        |   
|Net Assets, End of Period (000s)                                  |  | $                              | 74,950 |    |      | $ | 73,652 |   
|Ratios to Average Net Assets: (4)                                  |  |                                |        |    |      |   |        |   
|Gross Expenses                                                     |  |                                | 1.89   | %  |      |   | 2.04   | % 
|Net Expenses (6)                                                   |  |                                | 1.89   | %  |      |   | 2.04   | % 
|Net Investment (loss)                                              |  |                                | (1.15  | )% |      |   | (0.89  | )%
|Portfolio Turnover Rate (5)                                        |  |                                | 2.13   | %  |      |   | 2.27   | % 



|(1) | Selected data for a unit of membership interest outstanding throughout each period.
|--- | -----------------------------------------------------------------------------------

|(2) | Total investment value return based on per unit net asset value reflects the effects of changes in net asset value based on the performance of the Company during the period, and
assumes dividends and distributions, if any, were reinvested. The Companys units were issued in a private placement and are not traded. Therefore, the market value of total investment return is not presented.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Income and expense ratios do not reflect the Companys proportionate share of net investment income/(loss) and expenses, including any performance-based fees, of the Private
Investment Funds.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Annualized for a period less than a year.
|--- | -----------------------------------------

|(5) | Not annualized for a period less than a year.
|--- | ---------------------------------------------

|(6) | The net expense ratio includes incentive fees allocable to the investment adviser, if any.
|--- | ------------------------------------------------------------------------------------------

The accompanying notes are an integral part of these Financial Statements.



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EXCELSIOR VENTURE PARTNERS III, LLC

NOTES TO FINANCIAL STATEMENTS

January 31, 2008

Note 1  Organization
and Significant Accounting Policies

Excelsior Venture Partners III, LLC (the Company) is a non-diversified, closed-end
management investment company which has elected to be treated as a business development company or BDC under the Investment Company Act of 1940, as amended (the Investment Company Act). The Company was established as a
Delaware limited liability company on February 18, 2000. The Company commenced operations on April 5, 2001. The duration of the Company is ten years (subject to two 2-year extensions) from the final subscription closing which occurred on
May 11, 2001, at which time the affairs of the Company will be wound up and its assets distributed pro rata to members as soon as is practicable.

As a BDC, the Company must be primarily engaged in the business of furnishing capital and making available managerial assistance to companies that generally do not have ready access to capital through conventional
financial channels. The Companys investment objective is to achieve long-term capital appreciation primarily by investing in domestic venture capital and other private companies and, to a lesser extent, domestic and international private
funds, negotiated private investments in public companies and international direct investments that the Investment Adviser (as defined below) believes offer significant long-term capital appreciation potential. Venture capital and private investment
companies are companies in which the equity is closely held by company founders, management and/or a limited number of institutional investors. The Company does not have the right to demand that such equity securities be registered.

Costs incurred in connection with the initial offering of units totaled $1,468,218. Each members pro rata share of these costs was deducted from
his, her or its initial capital contribution.

The following is a summary of the Companys significant accounting policies. Such
policies are in conformity with generally accepted accounting principles for investment companies and are consistently followed in the preparation of the financial statements. Generally accepted accounting principles in the United States require
management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates.

The interim financial data as of January 31, 2008 and for the three months ended January 31, 2008 and January 31, 2007 is unaudited;
however, in the opinion of the Company, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods.

A. Cash and Cash Equivalents:

Cash and cash equivalents consist of deposits with banks. All highly liquid investments are listed separately on the Portfolio of Investments.

B. Restricted Cash:

Restricted cash, if any, consisted of proceeds from the sales of
investments held by counterparties as collateral for certain contingent claims for a specified period of time.



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Note 1  Significant Accounting Policies (continued)



C. Investment Valuation:

The Company values portfolio securities quarterly and at such other times as, in the Companys Board of Managers (the
Board or Board of Managers) view, circumstances warrant. Securities for which market quotations are readily available generally will be valued at the last sale price on the date of valuation or, if no sale occurred, at the
mean of the latest bid and ask prices; provided that, as to such securities that may have legal, contractual or practical restrictions on transfer, a discount of 10% to 40% from the public market price will be applied.

Securities for which no public market exists and other assets will be valued at fair value as determined in good faith by the Investment
Adviser or a committee of the Board of Managers or both under the supervision of the Board of Managers pursuant to certain valuation procedures summarized below. Securities having remaining maturities of 60 days or less from the date of purchase are
valued at amortized cost.

The value for securities for which no public market exists is difficult to determine. Generally,
such investments will be valued on a going concern basis without giving effect to any disposition costs. There is a range of values that is reasonable for such investments at any particular time. Initially, direct investments are valued
based upon their original cost until developments provide a sufficient basis for use of a valuation other than cost. Upon the occurrence of developments providing a sufficient basis for a change in valuation, direct investments will be valued by the
private market or appraisal methods of valuation. The private market method shall only be used with respect to reliable third party transactions by sophisticated, independent investors. The appraisal method shall be based
upon such factors affecting the investee company such as earnings, net worth, reliable private sale prices of the investee companys securities, the market prices for similar securities of comparable companies, an assessment of the investee
companys future prospects or, if appropriate, liquidation value. The values for the investments referred to in this paragraph will be estimated regularly by the Investment Adviser or a committee of the Board under the supervision of the Board
of Managers and, in any event, not less frequently than quarterly. However, there can be no assurance that such value will represent the return that might ultimately be realized by the Company from the investments.

The valuation of the Companys Private Investment Funds is based upon its pro-rata share of the value of the net assets of the
Private Investment Fund as determined by such Private Investment Fund, in accordance with its partnership agreement, constitutional or other documents governing such valuation, on the valuation date. If such valuation with respect to the
Companys investments in Private Investment Funds is not available by reason of timing or other event on the valuation date, or is deemed to be unreliable by the Investment Adviser, the Investment Adviser, under supervision of the Board of
Managers, shall determine such value based on its judgment of fair value on the appropriate date, less applicable charges, if any.

At January 31, 2008 and October 31, 2007, market quotations were not readily available for the Companys portfolio of securities valued at $59,398,437 or 79.26% of net assets and $56,267,427 or 77.78% of net assets,
respectively. Such securities were valued by the Investment Adviser, under the supervision of the Board of Managers. Because of the inherent uncertainty of valuation, the estimated values may differ significantly from the values that would have been
used had a ready market for the securities existed, and the differences could be material.



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Note 1  Significant Accounting Policies (continued)



D. Security transactions and investment income:

Private and Public Companies

Security transactions are recorded on a trade date basis. Realized gains and losses on investments sold are recorded on the basis of identified cost. Interest income, adjusted for amortization of premiums and
discounts on fixed income investments, is earned from settlement date and is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date.

Private Investment Funds

Distributions from a Private Investment Fund are
recorded as a return of capital and serve to reduce the cost basis of the Private Investment Fund. Distributions received in excess of the cost basis are recognized as realized gains. Distributions are recorded when they are received from the
Private Investment Fund.

E. Income taxes:

Under current law and based on certain assumptions and representations, the Company intends to be treated as a partnership for federal,
state and local income tax purposes. By reason of this treatment, the Company will itself not be subject to income tax. Rather, each member, in computing income tax, will include his, her or its allocable share of Company items of income, gain,
loss, deduction and expense. The cost of the Private Investment Funds for federal tax purposes is based on amounts reported to the Company on Schedule K-1 from the Private Investment Funds. As of January 31, 2008, the Company has not received
information to determine the tax cost of the Private Investment Funds. At December 31, 2006 and December 31, 2005, the Private Investment Funds had a cost basis for tax purposes of $12,465,650 and $9,315,233, respectively. Based on values
of the Private Investment Funds as of January 31, 2008, and after adjustment for purchases and sales between December 31, 2006 and January 31, 2008, this results in net unrealized appreciation for tax purposes on the Private
Investment Funds of $3,338,596. The cost basis for federal tax purposes of the Companys other investments at January 31, 2008 is $57,348,989, and those investments had net depreciation on a tax basis at January 31, 2008 of
($2,542,720). The cost basis for federal tax purposes of the Companys other investments at October 31, 2007, was $61,405,464, and those investments had net depreciation on a tax basis at October 31, 2007 of $9,924,379.

F. Deferred income:

Deferred income represents certain amounts not received by the Company until a subsequent period due to contingencies relating to the sale of an investment. As of January 31, 2008, there was approximately $65,000 of proceeds not
released from an escrow account. As such, it is subject to certain risks and is merely an estimate of the potential claim against the escrow account. The end result of the legal matter may result in a claim against the escrow account greater than
the current accrual or it may result in a claim amount smaller than the current estimate.



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Note 2  Investment Advisory Fee, Administration Fee and Related Party Transactions

UST Advisers, Inc. (USTA or the Investment Adviser), which has its principal offices at 225 High Ridge Road, Stamford, Connecticut
06905, is a Delaware corporation and registered investment adviser. The Investment Adviser is an indirect wholly-owned subsidiary of, and controlled by, Bank of America Corporation (Bank of America), a bank holding and a financial
holding company which has its principal executive offices at 101 North Tryon Street, Charlotte, North Carolina 28255.

Prior to
July 1, 2007, the Investment Adviser was an indirect subsidiary of U.S. Trust Corporation (U.S. Trust Corp.), a registered financial holding company, which, in turn, was a wholly-owned subsidiary of The Charles Schwab Corporation
(Schwab).

Prior to December 16, 2005, U.S. Trust Company, N.A. (UST-NA), acting through its registered
investment advisory division, U.S. Trust Asset Management Division, served as the investment adviser to the Company (the former Investment Adviser) pursuant to an Investment Advisory Agreement (the Agreement). Effective
December 16, 2005, USTA assumed the duties of UST-NA.

Under the Agreement for the services provided, the Investment Adviser is
entitled to receive a management fee at an annual rate equal to 2.00% of the Companys end of the quarter net assets through the fifth anniversary of the first closing date of April 5, 2001, and 1.00% of net assets thereafter. Prior to
March 31, 2006 and pursuant to a sub-advisory agreement among the Company, the former Investment Adviser, and United States Trust Company of New York (U.S. Trust NY), U.S. Trust NY served as the investment sub-adviser to the Company
and received an investment management fee from the former Investment Adviser and Investment Adviser. As of January 31, 2008 and October 31, 2007, $188,873 and $182,802, respectively, were payable to the Investment Adviser.

Prior to March 31, 2006, USTA was a wholly-owned subsidiary of UST-NA, and USTNA and U.S. TrustNY were wholly-owned subsidiaries of U.S.
Trust Corp. Effective March 31, 2006, U.S. Trust NY converted into a national bank named United States Trust Company, National Association (U.S. Trust) and UST-NA merged into U.S. Trust. U.S Trust was the surviving entity and
remained a wholly-owned subsidiary of U.S. Trust Corp. U.S Trust, acting through its registered investment advisory division, U.S. Trust-New York Asset Management Division (the Investment Sub-Adviser), was also serving as investment
sub-adviser to the Company pursuant to an investment sub-advisory agreement.

On July 1, 2007, U.S. Trust Corp. and its subsidiaries,
including USTA, were acquired by Bank of America (the Sale). USTA continued to serve as the Investment Adviser to the Company after the Sale pursuant to a new investment advisory agreement with the Company (the New Advisory
Agreement) that was approved at a special meeting of members of the Company held on March 15, 2007. The New Advisory Agreement is identical in all material respects except for the term and the date of effectiveness to the Agreement. The
Investment Sub-Adviser ceased to serve as the investment sub-adviser to the Company after the Sale.

On February 22, 2008, U.S. Trust
merged into Bank of America, N.A., an indirect wholly-owned subsidiary of Bank of America.

In addition to the management fee, the
Investment Adviser is entitled to allocations and distributions equal to the Incentive Carried Interest. The Incentive Carried Interest is an amount equal to 20% of the excess, if any, of the Companys cumulative realized capital gains on
Direct Investments, over the sum of (a) cumulative realized capital losses on investments of any type (b) cumulative gross unrealized capital depreciation on investments of any type and (c) cumulative net expenses. Direct Investments
means Company investments in domestic and foreign companies in which the equity is closely held by company founders, management, and/or a limited number of institutional investors and negotiated private investments in public companies. As of
January 31, 2008 and October 31, 2007, there was no Incentive Carried Interest earned by the Investment Adviser.



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Note 2  Investment Advisory Fee, Administration Fee and Related Party Transactions (continued)

Pursuant to an Administration, Accounting and Investor Services Agreement, the Company retains PFPC Inc. (PFPC), a majority-owned
subsidiary of The PNC Financial Services Group, as administrator, accounting and investor services agent. In addition, PFPC Trust Company serves as the Companys custodian. In consideration for its services, the Company (i) pays PFPC a
variable fee between 0.105% and 0.07%, based on average quarterly net assets, payable monthly, subject to a minimum quarterly fee of approximately $30,000, (ii) pays annual fees of approximately $36,667 for taxation services and
(iii) reimburses PFPC for out-of-pocket expenses.

Charles Schwab & Co., Inc. (the Distributor), the principal
subsidiary of Schwab, served as the Companys distributor for the offering of units. The former Investment Adviser paid the Distributor from its own assets an amount equal to 0.02% of the total of all subscriptions received in the offering. The
Investment Adviser or an affiliate paid the Distributor an on-going fee for the sale of units and the provision of ongoing investor services in an amount equal to the annual rate of 0.45% of the average quarterly net asset value of all outstanding
units held by investors introduced to the Company by the Distributor through the fifth anniversary of the final subscription closing date and at the annual rate of 0.22% thereafter, subject to elimination upon all such fees totaling 6.5% of the
gross proceeds received by the Company from the offering.

Each member of the Board of Managers receives $10,000 as an annual retainer and
the Chairman of the Board receives an additional $1,000 annual retainer. Also, each member of the Board receives $2,000 per quarterly meeting attended. In addition, each Board member receives $500 per quarterly telephonic meeting and $500 for any
other telephonic special meeting. For each audit committee meeting attended, Board members receive $1,500, while the Chairman of the Audit Committee receives an additional $1,000 retainer. Each member of the Board is reimbursed for expenses incurred
for attending meetings. No person who is an officer, manager or employee of Bank of America, or its subsidiaries, who serves as an officer, manager or employee of the Company, receives any compensation from the Company.

As of January 31, 2008 and October 31, 2007, Excelsior Venture Investors III, LLC had an investment in the Company of $47,580,466 and
$45,925,203, respectively. This represents an ownership interest of 63.48% in the Company as of both dates.

Note 3  Purchases and Sales of
Securities

Excluding short-term investments, the Companys purchases and proceeds from sales of securities for the three months
ended January 31, 2008 and January 31, 2007 were as follows:



|                              |  |               |  |             
|----------------------------- |  | ------------- |  | ------------
|Three Months Ended January 31 |  | Purchases ($) |  | Proceeds ($)
|2008                          |  | 1,236,876     |  | 1,326,511   
|2007                          |  | 1,960,688     |  | 1,380,088   



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Note 4  Commitments

As of January 31, 2008, the Company had unfunded investment commitments to private investment funds totaling $5,564,963. The Company also had commitments from its investors of $148.8 million, of which $2.7
million remains uncalled.



|                                       |  |            |            |                    |   |          
|-------------------------------------- |  | ---------- | ---------- | ------------------ | - | ---------
|Private Investment Funds               |  | Commitment |            | UnfundedCommitment
|Advanced Technology Ventures VII, L.P. |  | $          | 2,700,000  |                    | $ | 256,500  
|                                       |  |           
|Burrill Life Sciences Capital Fund     |  | $          | 3,000,000  |                    | $ | 873,703  
|                                       |  |           
|CHL Medical Partners II, L.P.          |  | $          | 2,000,000  |                    | $ | 185,000  
|                                       |  |           
|CMEA Ventures VI, L.P.                 |  | $          | 3,000,000  |                    | $ | 1,260,000
|                                       |  |           
|Morgenthaler Partners VII, L.P.        |  | $          | 3,000,000  |                    | $ | 300,000  
|                                       |  |           
|Prospect Venture Partners II, L.P.     |  | $          | 3,000,000  |                    | $ | 495,000  
|                                       |  |           
|Sevin Rosen Fund IX, L.P.              |  | $          | 3,000,000  |                    | $ | 1,125,000
|                                       |  |           
|Tallwood II, L.P.                      |  | $          | 3,000,000  |                    | $ | 450,000  
|                                       |  |           
|Valhalla Partners, L.P.                |  | $          | 3,000,000  |                    | $ | 619,760  
|                                       |  |            |            |                    |   |          
|Total                                  |  | $          | 25,700,000 |                    | $ | 5,564,963
|                                       |  |            |            |                    |   |          



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Note 5  Transactions with Affiliated Companies

An affiliated company is a company in which the Company has ownership of more than 5% of the voting securities. The Company did not receive dividends from
affiliated companies during the three months ended January 31, 2008 and October 31, 2007. Transactions with companies, which are or were affiliates, were as follows:



|                                                 |  |                                                |                                                     |                           |            |                                 |   |            |                          |  |                  |        |                     |   |       |                                               |   |                                     |   |  |           |  |   |           
|------------------------------------------------ |  | ---------------------------------------------- | --------------------------------------------------- | ------------------------- | ---------- | ------------------------------- | - | ---------- | ------------------------ |  | ---------------- | ------ | ------------------- | - | ----- | --------------------------------------------- | - | ----------------------------------- | - |  | --------- |  | - | ----------
|                                                 |  |                                                | For Three Months Ended January 31, 2008 (Unaudited)
|Name of Investment                               |  | Shares/PrincipalAmount Held atOctober 31, 2007 |                                                     | October 31,2007 FairValue |            | Purchases/ConversionAcquisition |   |            | SalesProceeds/Conversion |  | InterestReceived |        | RealizedGain/(Loss) |   |       | Shares/PrincipalAmount Held atJanuary 31,2008 |   | January 31, 2008Fair Value (Note 1)
|Controlled Affiliates                            |  |                                                |                                                     |                           |            |                                 |   |            |                          |  |                  |        |                     |   |       |                                               |   |                                     |   |  |           |  |   |           
|Pilot Software Inc., Series A Preferred          |  |                                               |                                                     |                           |           |                                 |   |           |                          |  |                  |       |                     |   |      |                                               |   | 193,809                             |   |  |          |  |   |          
|                                                 |  |                                                |                                                     |                           |            |                                 |   |            |                          |  |                  |        |                     |   |       |                                               |   |                                     |   |  |           |  |   |           
|Total Controlled Affiliates                      |  |                                                |                                                     | $                         |           |                                 | $ |           |                          |  | $                |       |                     | $ |      |                                               | $ | 193,809                             |   |  |           |  | $ |          
|                                                 |  |                                                |                                                     |                           |            |                                 |   |           
|Non-Controlled Affiliates                        |  |                                                |                                                     |                           |            |                                 |   |            |                          |  |                  |        |                     |   |       |                                               |   |                                     |   |  |           |  |   |           
|Ethertronics, Inc., Series B Preferred           |  | 4,433,333                                      |                                                     |                           | 6,650,000  |                                 |   |           |                          |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 4,433,333 |  |   | 6,650,000 
|Ethertronics, Inc., Series C Warrants            |  | 271,247                                        |                                                     |                           |           |                                 |   |           |                          |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 271,247   |  |   |          
|Ethertronics, Inc., Series C Preferred           |  | 1,697,957                                      |                                                     |                           | 2,546,937  |                                 |   |           |                          |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 1,697,957 |  |   | 2,546,937 
|LogicLibrary, Inc., Series A Preferred           |  | 8,751,782                                      |                                                     |                           | 4,001,492  |                                 |   | 84,507     |                          |  |                  |       |                     |   | 1,686 |                                               |   |                                    |   |  | 8,940,298 |  |   | 4,087,685 
|LogicLibrary, Inc., Series A-1 Preferred         |  | 3,080,464                                      |                                                     |                           | 1,408,450  |                                 |   |           |                          |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 3,080,464 |  |   | 1,408,450 
|MIDAS Vision Systems, Inc., Series A-1 Preferred |  | 933,593                                        |                                                     |                           |           |                                 |   |           |                          |  |                  |       |                     |   |      |                                               |   | (1,054,960                          | ) |  |          |  |   |          
|MIDAS Vision Systems, Inc., Common Stock         |  | 157,396                                        |                                                     |                           |           |                                 |   |           |                          |  |                  |       |                     |   |      |                                               |   | (4,000,000                          | ) |  |          |  |   |          
|NanoOpto Corp., Bridge Note                      |  | 237,321                                        |                                                     |                           | 160,000    |                                 |   |           |                          |  |                  | 93,384 |                     |   |      |                                               |   | (143,937                            | ) |  |          |  |   |          
|OpVista, Inc., Series AA Preferred               |  | 5,683,906                                      |                                                     |                           | 6,236,892  |                                 |   | (4,067,801 | )                        |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 1,674,078 |  |   | 626,896   
|OpVista, Inc., Common Stock                      |  | 1,079,541                                      |                                                     |                           | 1,184,567  |                                 |   | 4,465,175  |                          |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 6,025,313 |  |   |          
|OpVista, Inc., Series BB Convertible Preferred   |  | 433,399                                        |                                                     |                           | 491,800    |                                 |   | (397,374   | )                        |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 132,200   |  |   | 49,505    
|                                                 |  |                                                |                                                     |                           |            |                                 |   |            |                          |  |                  |        |                     |   |       |                                               |   |                                     |   |  |           |  |   |           
|OpVista, Inc., Series CC Convertible Preferred   |  |                                               |                                                     |                           |           |                                 |   | 683,750    |                          |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 3,418,748 |  |   | 1,025,624 
|OpVista, Inc., Bridge Note                       |  | 675,989                                        |                                                     |                           | 1,351,978  |                                 |   | (683,750   | )                        |  |                  |       |                     |   | 7,761 |                                               |   |                                    |   |  |          |  |   |          
|OpVista, Inc., Series CC Warrants                |  | 675,313                                        |                                                     |                           |           |                                 |   |           |                          |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 675,313   |  |   | 675       
|Tensys Medical, Inc., Series C Preferred         |  | 4,166,667                                      |                                                     |                           | 534,026    |                                 |   |           |                          |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 4,166,667 |  |   | 438,397   
|Tensys Medical, Inc., Series D Preferred         |  | 1,187,500                                      |                                                     |                           | 152,197    |                                 |   |           |                          |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 1,187,500 |  |   | 124,943   
|Tensys Medical, Inc., Series E Preferred         |  | 96,629                                         |                                                     |                           | 347,865    |                                 |   | 287,410    |                          |  |                  |       |                     |   |      |                                               |   |                                    |   |  | 318,845   |  |   | 1,147,842 
|                                                 |  |                                                |                                                     |                           |            |                                 |   |            |                          |  |                  |        |                     |   |       |                                               |   |                                     |   |  |           |  |   |           
|Total Non-Controlled Affiliates                  |  |                                                |                                                     | $                         | 25,066,204 |                                 | $ | 371,917    |                          |  | $                | 93,384 |                     | $ | 9,447 |                                               | $ | (5,198,897                          | ) |  |           |  | $ | 18,106,954
|                                                 |  |                                                |                                                     |                           |            |                                 |   |            |                          |  |                  |        |                     |   |       |                                               |   |                                     |   |  |           |  |   |           
|Total Non-Controlled and Controlled Affiliates   |  |                                                |                                                     | $                         | 25,066,204 |                                 | $ | 371,917    |                          |  | $                | 93,384 |                     | $ | 9,447 |                                               | $ | (5,005,088                          | ) |  |           |  | $ | 18,106,954
|                                                 |  |                                                |                                                     |                           |            |                                 |   |            |                          |  |                  |        |                     |   |       |                                               |   |                                     |   |  |           |  |   |           



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|                                                 |  |                                                |                                               |                           |            |                                 |   |          |                          |  |   |                  |   |                     |   |        |                                                |   |                                     |   |  |   |           |  |   |           
|------------------------------------------------ |  | ---------------------------------------------- | --------------------------------------------- | ------------------------- | ---------- | ------------------------------- | - | -------- | ------------------------ |  | - | ---------------- | - | ------------------- | - | ------ | ---------------------------------------------- | - | ----------------------------------- | - |  | - | --------- |  | - | ----------
|                                                 |  |                                                | For the Year Ended October 31, 2007 (Audited)
|Name of Investment                               |  | Shares/PrincipalAmount Held atOctober 31, 2006 |                                               | October 31,2006 FairValue |            | Purchases/ConversionAcquisition |   |          | SalesProceeds/Conversion |  |   | InterestReceived |   | RealizedGain/(Loss) |   |        | Shares/PrincipalAmount Held atOctober 31, 2007 |   | October 31, 2007Fair Value (Note 1)
|Controlled Affiliates                            |  |                                                |                                               |                           |            |                                 |   |          |                          |  |   |                  |   |                     |   |        |                                                |   |                                     |   |  |   |           |  |   |           
|Pilot Software Inc., Series A Preferred          |  | 46,362,656                                     |                                               | $                         | 8,110,096  |                                 | $ |         |                          |  | $ | 9,942,786        |   |                     | $ |       |                                                | $ | 1,573,881                           |   |  | $ |          |  | $ |          
|Pilot Software Inc., Bridge Note, 9%             |  | 1,404,600                                      |                                               |                           | 1,404,600  |                                 |   |         |                          |  |   | 2,864,704        |   |                     |   | 36,712 |                                                |   | 1,403,907                           |   |  |   |          |  |   |          
|Cydelity Inc., Series A Preferred                |  | 19,995,000                                     |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | (3,999,000                          | ) |  |   |          |  |   |          
|Cydelity Inc., Series A-1 Preferred              |  | 19,702,277                                     |                                               |                           | 3,940,456  |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | (3,940,455                          | ) |  |   |          |  |   |          
|Cydelity Inc., Series A-2 Preferred              |  | 25,535,051                                     |                                               |                           | 2,500,009  |                                 |   |         |                          |  |   | 1,001,681        |   |                     |   |       |                                                |   | (1,498,327                          | ) |  |   |          |  |   |          
|Cydelity Inc., Common Stock                      |  | 1,000,000                                      |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | (1,000                              | ) |  |   |          |  |   |          
|                                                 |  |                                                |                                               |                           |            |                                 |   |          |                          |  |   |                  |   |                     |   |        |                                                |   |                                     |   |  |   |           |  |   |           
|Total Controlled Affiliates                      |  |                                                |                                               | $                         | 15,955,161 |                                 | $ |         |                          |  | $ | 13,809,171       |   |                     | $ | 36,712 |                                                | $ | (6,460,994                          | ) |  |   |           |  | $ |          
|                                                 |  |                                                |                                               |                           |            |                                 |   |         
|Non-Controlled Affiliates                        |  |                                                |                                               |                           |            |                                 |   |          |                          |  |   |                  |   |                     |   |        |                                                |   |                                     |   |  |   |           |  |   |           
|Chips & Systems, Inc., Series A Preferred        |  | 7,000,000                                      |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | (3,500,000                          | ) |  |   |          |  |   |          
|Chips & Systems, Inc. Bridge Note                |  | 1,441,133                                      |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | (1,441,133                          | ) |  |   |          |  |   |          
|Ethertronics, Inc., Series B Preferred           |  | 4,433,333                                      |                                               |                           | 6,650,000  |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 4,433,333 |  |   | 6,650,000 
|Ethertronics, Inc., Series B Warrants            |  | 281,667                                        |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   |          |  |   |          
|Ethertronics, Inc., Series C Warrants            |  | 214,073                                        |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 271,247   |  |   |          
|Ethertronics, Inc., Series C Preferred           |  | 1,316,793                                      |                                               |                           | 1,975,190  |                                 |   | 571,746  |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 1,697,957 |  |   | 2,546,937 
|Genoptix, Inc., Series 1-A Preferred             |  | 942,481                                        |                                               |                           | 950,822    |                                 |   | (950,822 | )                        |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   |          |  |   |          
|Genoptix, Inc., Series 1-B Preferred             |  | 1,403,696                                      |                                               |                           | 950,822    |                                 |   | (950,822 | )                        |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   |          |  |   |          
|Genoptix, Inc., Common Stock                     |  | 46,860                                         |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   |          |  |   |          
|Genoptix, Inc., Series 1-C Preferred             |  | 620,580                                        |                                               |                           | 554,178    |                                 |   | (554,178 | )                        |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   |          |  |   |          
|Genoptix, Inc., Series 1-D Preferred             |  | 728,413                                        |                                               |                           | 461,815    |                                 |   | (461,815 | )                        |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   |          |  |   |          
|LightConnect, Inc., Series C Preferred           |  |                                               |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | 168,484                             |   |  |   |          |  |   |          
|LogicLibrary, Inc., Series A Preferred           |  | 7,762,821                                      |                                               |                           | 3,549,296  |                                 |   | 452,196  |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 8,751,782 |  |   | 4,001,492 
|LogicLibrary, Inc., Series A-1 Preferred         |  | 3,080,464                                      |                                               |                           | 1,408,450  |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 3,080,464 |  |   | 1,408,450 
|MIDAS Vision Systems, Inc., Series A-1 Preferred |  | 933,593                                        |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 933,593   |  |   |          
|MIDAS Vision Systems, Inc., Common Stock         |  | 157,396                                        |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 157,396   |  |   |          
|NanoOpto Corp., Series A-1 Preferred             |  | 956,234                                        |                                               |                           | 840,912    |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | (2,231,212                          | ) |  |   |          |  |   |          
|NanoOpto Corp., Series B Preferred               |  | 3,023,399                                      |                                               |                           | 1,286,155  |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | (1,286,154                          | ) |  |   |          |  |   |          
|NanoOpto Corp., Series C Preferred               |  | 1,682,470                                      |                                               |                           | 733,389    |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | (733,389                            | ) |  |   |          |  |   |          
|NanoOpto Corp., Series C Warrants                |  | 229,410                                        |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   |          |  |   |          
|NanoOpto Corp., Series D Preferred               |  | 1,234,263                                      |                                               |                           | 382,622    |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | (382,622                            | ) |  |   |          |  |   |          
|NanoOpto Corp., Bridge Note                      |  |                                               |                                               |                           |           |                                 |   | 237,321  |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 237,321   |  |   | 160,000   
|OpVista, Inc., Series AA Preferred               |  | 5,089,790                                      |                                               |                           | 5,367,967  |                                 |   | 526,227  |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 5,683,906 |  |   | 6,236,892 
|OpVista, Inc., Common Stock                      |  | 1,079,541                                      |                                               |                           | 1,138,542  |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 1,079,541 |  |   | 1,184,567 
|OpVista, Inc., Series BB Convertible Preferred   |  |                                               |                                               |                           |           |                                 |   | 491,800  |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 433,399   |  |   | 491,800   
|OpVista, Inc., Bridge Note                       |  |                                               |                                               |                           |           |                                 |   | 675,989  |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 675,989   |  |   | 1,351,978 
|OpVista, Inc., Series CC Warrants                |  |                                               |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 675,313   |  |   |          
|Silverback Systems, Inc., Common                 |  | 40,026                                         |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | (4,759,081                          | ) |  |   |          |  |   |          
|Silverback Systems, Inc., Series B               |  | 559,993                                        |                                               |                           | 1,600,000  |                                 |   |         |                          |  |   | 749,976          |   |                     |   |       |                                                |   | (750,805                            | ) |  |   |          |  |   |          
|Silverback Systems, Inc., Series A-2 Preferred   |  | 772,503                                        |                                               |                           |           |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   | (2,070,310                          | ) |  |   |          |  |   |          
|Tensys Medical, Inc., Series C Preferred         |  | 4,166,667                                      |                                               |                           | 1,887,160  |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 4,166,667 |  |   | 534,026   
|Tensys Medical, Inc., Series D Preferred         |  | 1,187,500                                      |                                               |                           | 537,840    |                                 |   |         |                          |  |   |                 |   |                     |   |       |                                                |   |                                    |   |  |   | 1,187,500 |  |   | 152,197   
|Tensys Medical, Inc., Series E Preferred         |  |                                               |                                               |                           |           |                                 |   |         |                          |  |   | 115,954          |   |                     |   |       |                                                |   |                                    |   |  |   | 96,629    |  |   | 347,865   
|Tensys Medical, Inc., Bridge Note                |  | 52,017                                         |                                               |                           | 52,017     |                                 |   | 59,039   |                          |  |   | (115,954         | ) |                     |   | 4,898  |                                                |   |                                    |   |  |   |          |  |   |          
|                                                 |  |                                                |                                               |                           |            |                                 |   |          |                          |  |   |                  |   |                     |   |        |                                                |   |                                     |   |  |   |           |  |   |           
|Total Non-Controlled Affiliates                  |  |                                                |                                               | $                         | 30,327,177 |                                 | $ | 96,681   |                          |  | $ | 749,976          |   |                     | $ | 4,898  |                                                | $ | (16,986,222                         | ) |  |   |           |  | $ | 25,066,204
|                                                 |  |                                                |                                               |                           |            |                                 |   |          |                          |  |   |                  |   |                     |   |        |                                                |   |                                     |   |  |   |           |  |   |           
|Total Non-Controlled and Controlled Affiliates   |  |                                                |                                               | $                         | 46,282,338 |                                 | $ | 96,681   |                          |  | $ | 14,559,147       |   |                     | $ | 41,610 |                                                | $ | (23,447,216                         | ) |  |   |           |  | $ | 25,066,204
|                                                 |  |                                                |                                               |                           |            |                                 |   |          |                          |  |   |                  |   |                     |   |        |                                                |   |                                     |   |  |   |           |  |   |           



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Note 6  Pending Litigation

The former Investment Adviser, certain of its affiliates, including U.S. Trust, and others were named in four shareholder class action lawsuits and two derivative actions which allege that the former Investment
Adviser, certain of its affiliates and others allowed certain parties to engage in illegal and improper mutual fund trading practices, which allegedly caused financial injury to the shareholders of certain mutual funds managed by the former
Investment Adviser. Each seeks unspecified monetary damages and related equitable relief.

The class and derivative actions described above
were transferred to the United States District Court for the District of Maryland for coordinated and consolidated pre-trial proceedings. In November 2005, the Maryland court dismissed many of the plaintiffs claims in both the class action and
derivative lawsuits. Several affiliates of the former Investment Adviser and individual defendants have also been dismissed. Plaintiffs claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and under
Section 36(b) and 48(a) of the Investment Company Act, however, have not been dismissed.

While the ultimate outcome of these matters
cannot be predicted with any certainty at this time, based on currently available information and consultation with counsel, U.S. Trust believes that the likelihood is remote that the pending litigation will materially affect the Investment
Advisers ability to provide investment management services to the Company. Neither the Investment Adviser nor the Company is a party to the lawsuits described above.

Note 7  Guarantees

In the normal course of business, the Company enters into contracts that
provide general indemnifications. The Companys maximum exposure under these agreements is dependent on future claims that may be made against the Company, and therefore cannot be established; however, based on experience, the risk of loss from
such claims is considered remote.

Note 8  New Accounting Pronouncement

The Financial Accounting Standards Board (FASB) issued Interpretation 48 in July 2006, Accounting for Uncertainty in Income Taxes 
an interpretation of FASB Statement 109 (FIN 48). FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position must meet before being recognized in the financial statements. FIN
48 is effective for fiscal years beginning after December 15, 2006. The Company has evaluated FIN 48 and determined that it will have no material impact on these financial statements.

FASB issued Statement No. 157 in September 2006, Fair Value Measurements, which is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal years. This statement provides enhanced guidance for using fair value to measure assets and liabilities. It clarifies fair value, establishes a framework for
measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. The standard applies whenever other standards require (or permit) assets or liabilities to be measured at fair
value. The standard does not expand the use of fair value in any new circumstances. The Company is reviewing the statement and its impact on the financial statements.

FASB issued Statement No. 159 (SFAS 159) in February 2007. The Fair Value Option for Financial Assets and Financial Liabilities, which is effective for Financial Statements issued for
fiscal year beginning after November 15, 2007. SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value, with changes in fair value recognized in earnings. The Company is reviewing the
statement and its impact on the financial statements.



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##### Table of Contents

Note 8  New Accounting Pronouncement (continued)

FASB approved the issuance of Statement of Position (SOP) 07-01 in June of 2007, Clarification of the Scope of the Audit and Accounting
Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies, which was originally effective for fiscal year beginning on or after November 15, 2007. Subsequent to the
issuance of SOP 07-01, FASB issued FASB Staff Position (FSP) 07-01a, which proposes to indefinitely delay the effective date of SOP 07-01 and prohibits early adoption of SOP 07-01 until a final FSP is issued. The Company is reviewing SOP
07-01 and its impact on the financial statements.

Note 9  Subsequent Events

On February 22, 2008, U.S. Trust merged into Bank of America, N.A., an indirect wholly-owned subsidiary of Bank of America.

On February 28, 2008, an underwriting agreement became effective where by the Company was able to participate in a secondary offering. Pursuant to
the terms of such agreement, the Company sold approximately 122,359 shares of Genoptix, Inc. at a public offering price of $25.50 per share. The Company sold an additional 20,557 shares over the original allotment as a result of increased demand.
The net proceeds received by virtue of the sale, net of all customary fees and expenses, is $3,455,632.



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations. For the Three months ended January 31, 2008 as Compared to the Similar Periods in
2007
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Liquidity and Capital Resources

The Company focuses its investments in the securities of privately-held venture capital companies, and to a lesser extent in venture capital, buyout and other private equity funds managed by third parties. The Company
may offer managerial assistance to certain of such privately-held venture capital companies. The Company invests its available cash in short-term investments of marketable securities pending follow-on investments in portfolio companies and
distribution to investors.

At January 31, 2008, the Company held $3,241 in cash and cash equivalents and $12,618,562 short-term
investments, as compared to $26,240 in cash and cash equivalents and $11,367,859 in short-term investments, at October 31, 2007. The overall increase in cash and short-term investments was primarily due to cash received from realizations and
exceeded the new and follow-on investments. The Company during this period funded additional capital per its commitments to its private investment funds. In connection with the Companys total commitments to private funds in the amount of
$25,700,000 since inception, the Company, through January 31, 2008, has contributed $20,135,037 or 78.35% of the total capital committed to nine private investment funds. During the three months ended January 31, 2008, the Company also
participated in follow-on financing rounds for several of its private companies totaling $371,917.

The Company believes that its liquidity
and capital resources are adequate to satisfy its operational needs as well as the continuation of its investment program.

Results of Operations

Investment Income and Expenses

For the three months ended January 31, 2008, the Company had investment income of $135,367, primarily from investments in short-term securities, and net operating expenses of $345,963, resulting in a net investment loss of ($210,596).
For the three months ended January 31, 2007, the Company had investment income of $215,149, primarily from investments in short-term securities, and net operating expenses of $380,612, resulting in a net investment loss of ($165,463). The
decrease in investment income for the three months ended January 31, 2008 is due to decrease in interest income from investments in the private companies.

For the three months ended January 31, 2008 and 2007, the Investment Adviser earned $188,873 and $185,643 in management fees, respectively. Management fees recorded during the period ended January 31, 2008
and January 31, 2007 are at an annual rate of 1.00% of net assets. The Investment Adviser provides investment management and administrative services required for the operation of the Company. In consideration of the services rendered by the
Investment Adviser, the Company pays a management fee based upon a percentage of the net assets of the Company. This fee is determined and payable quarterly. Effective July 1, 2007, the Investment Sub-Adviser ceased to serve as investment
sub-adviser to the Company.

Net Assets

The Companys net assets were $74,949,599, or a net asset value per unit of $253.89, at January 31, 2008. This represents an increase of $2,607,400, or $8.84 per unit, from net assets of $72,342,199, or $245.05 per unit, at
October 31, 2007. The net increase resulted principally from a net increase in net assets from operations of $2,607,400 or $8.84 per unit.



20



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##### Table of Contents

Realized and Unrealized Gains and Losses from Portfolio Investments

The realized loss of ($5,210,968) for the three months ended January 31, 2008 is comprised of losses from Companys write off of Midas Vision
Systems, Inc., a private company investment, which resulted in a realized loss of ($5,054,960). This loss also includes a realized loss of ($82,047) from the Companys sale of stock of Hansen Medical, Inc. The remaining net loss of ($73,961) is
comprised of all other gains/(losses) of the remaining direct investments and private investment funds. For the three months ended January 31, 2007, the Company had a net realized gain/(loss) on security transactions of ($7,401,700). The net
realized (loss) for the three months ended January 31, 2007 was principally the result of the Companys sale of Silverback Systems, Inc, a private company investment, which resulted in a realized loss of ($7,580,196).

For the three months ended January 31, 2008 and 2007, the Company had a net change in unrealized appreciation on investments of $8,028,964 and
$5,657,048, respectively. The net change in unrealized appreciation for the three months ended January 31, 2008 was principally the combination of: i) the reversal of unrealized losses due to write off of Midas Vision of $5,054,960; ii)
appreciation on Genoptix, Inc. of $10,111,381; and iii) appreciation on Private Investment Funds of $656,752. This unrealized gain was partially offset by the unrealized loss on OpVista, Inc. of ($7,570,304). The net change in unrealized
depreciation for the period ended January 31, 2007 was principally the combination of: i) the sale of Silverback Systems Inc., a private company investment, which resulted in a decrease in unrealized depreciation of $6,730,172 due to the
reclassification from an unrealized depreciation to realized loss; ii) a decrease of ($4,840,465) due to the write-down of Cydelity, Inc., a private company investment; iii) an increase of $3,736,394 due to the write-up of Pilot Software, Inc., a
private company investment, and (iv) an overall decrease in the valuation of the Companys private investment funds.

Application of Critical
Accounting Policies

Under the supervision of the Valuation and Audit Committees of the Companys Board of Managers, consisting of
the Managers, who are not interested persons, as defined in Section 2(a)(19) of the Investment Company Act (the Independent Managers), of the Company, the Investment Adviser makes certain critical accounting estimates
with respect to the valuation of private portfolio investments. These estimates could have a material impact on the presentation of the Companys financial condition because in total, they currently represent 79.26% of the Companys net
assets at January 31, 2008. For the private investments held at January 31, 2008, changes to these estimates and realizations resulted in a $7.4 million increase in net asset value from October 31, 2007.

The value for securities for which no public market exists is difficult to determine. Generally speaking, such investments will be valued on a
going concern basis without giving effect to any disposition costs. There is a range of values that is reasonable for such investments at any particular time. Because of the inherent uncertainty of valuation, the estimated values may
differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material.

Initially, direct private company investments are valued based upon their original cost until developments provide a sufficient basis for use of a valuation other than cost. Upon the occurrence of developments
providing a sufficient basis for a change in valuation, direct private company investments will be valued by the private market or appraisal methods of valuation. The private market method shall only be used with respect to
reliable third party transactions by sophisticated, independent investors. The appraisal method shall be based upon such factors affecting the company such as earnings, net worth, reliable private sale prices of the companys securities, the
market prices for similar securities of comparable companies, an assessment of the companys future prospects or, if appropriate, liquidation value. The values for the investments referred to in this paragraph will be estimated regularly by the
Investment Adviser or a committee of the Board of Managers, or both, under the supervision of the Board, and, in any event, not less frequently than quarterly. However, there can be no assurance that such value will represent the return that might
ultimately be realized by the Company from the investments.



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##### Table of Contents

Application of Critical Accounting Policies (continued)

The valuation of the Companys private funds is based upon the its pro-rata share of the value of the assets of a private fund as determined by such
private fund, in accordance with its partnership agreement, constitutional or other documents governing such valuation, on the valuation date. If such valuation with respect to the Companys investments in private funds is not available by
reason of timing or other event on the valuation date, or deemed to be unreliable by the Investment Adviser, the Investment Adviser, under supervision of the Board, shall determine such value based on its judgment of fair value on the appropriate
date, less applicable charges, if any.

The Investment Adviser also makes estimates regarding discounts on market prices of publicly traded
securities where appropriate. For securities which have legal, contractual or practical restrictions on transfer, a discount of 10% to 40% from the public market price will be applied.



|Item 3. | Quantitative and Qualitative Disclosures about Market Risk.
|------- | -----------------------------------------------------------

Equity Price Risk

The Company anticipates that a majority of its investment portfolio will consist of securities in private
companies and private investment funds. As of January 31, 2008, 79.26% of the Companys net assets are not publicly traded. These investments are recorded at fair value as determined by the Investment Adviser in accordance with valuation
guidelines adopted by the Board of Managers. This method of valuation does not result in increases or decreases in the fair value of these securities in response to changes in market prices. Thus, these securities are not subject to equity price
risk normally associated with public equity markets, except that to the extent that the private investment funds hold underlying public securities, the Company is indirectly exposed to equity price risk associated with the public markets. At
January 31, 2008 and January 31, 2007, the Company was not subject to equity price risk normally associated with public equity markets, except to the extent that the private investment funds that the Company has invested in hold, from time
to time, interests in securities which may be publicly traded.



|Item 4. | Controls and Procedures.
|------- | ------------------------

(a) Evaluation of
Disclosure Controls and Procedures. As of January 31, 2008 (the end of the period covered by this report), the Companys principal executive officers and principal financial officer evaluated the effectiveness of the Companys
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and have concluded that, based on such evaluation, the Companys disclosure controls and procedures were adequate and effective to ensure that
material information relating to the Company was made known to them by others within those entities.

(b) Changes in Internal Controls.
There were no significant changes in the Companys internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, nor were there any significant
deficiencies or material weaknesses in the Companys internal controls over financial reporting. Accordingly, no corrective actions were required or undertaken.



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##### Table of Contents

PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------

None.



|Item 2. | Changes in Securities and Use of Proceeds.
|------- | ------------------------------------------

None.



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------

None.



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

None.



|Item 5. | Other Information.
|------- | ------------------

None.



|Item 6. | Exhibits and Reports on Form 8-K.
|------- | ---------------------------------



|(a) | Exhibits.
|--- | ---------



|     |  |                                                                                                                                                   
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|     | 
|31.2 |  | Certification of Treasurer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.              
|     | 
|32   |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                           



|(b) | Reports on Form 8-K.
|--- | --------------------

None.



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                     |  |                                     |  |                                      
|-------------------- |  | ----------------------------------- |  | -------------------------------------
|                     |  | EXCELSIOR VENTURE PARTNERS III, LLC
|                     |  |                                    
|Date: March 17, 2008 |  | By:                                 |  | /s/ David R. Bailin                  
|                     |  |                                     |  | David R. Bailin                      
|                     |  |                                     |  | Co-Chief Executive Officer           
|                     |  |                                    
|Date: March 17, 2008 |  | By:                                 |  | /s/ Raghav V. Nandagopal             
|                     |  |                                     |  | Raghav V. Nandagopal                 
|                     |  |                                     |  | Co-Chief Executive Officer           
|                     |  |                                    
|Date: March 17, 2008 |  | By:                                 |  | /s/ Steven L. Suss                   
|                     |  |                                     |  | Steven L. Suss                       
|                     |  |                                     |  | Treasurer and Chief Financial Officer



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