<PAGE>

                       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 April 30, 2003
                               -------------------------------------------------

                                       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             (I.R.S. Employer Identification No.)
 Incorporation or Organization)

114 West 47th Street, New York, NY                      10036-1532
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                (Zip Code)

Registrant's Telephone Number, Including Area Code  (212) 852-1000
                                                    ----------------------------

--------------------------------------------------------------------------------
   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

<PAGE>

                       EXCELSIOR VENTURE PARTNERS III, LLC

     This Quarterly Report on Form 10-Q contains historical information and
forward-looking statements. Statements looking forward in time are included in
this Form 10-Q pursuant to the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. They involve known and unknown risks
and uncertainties that may cause Excelsior Venture Partners III, LLC's (the
"Company's") actual results to differ from future performance suggested herein.

     The interim financial statements contained in this quarterly report 10Q
have been reviewed by Ernst & Young LLP, the Company's independent public
accountants.

<TABLE>
<CAPTION>
                          INDEX                                                                           PAGE NO.
                          -----                                                                           --------
<S>                                                                                                       <C>
PART I.                   FINANCIAL INFORMATION

 Item 1.                  Financial Statements.                                                               1

                          Portfolio of Investments as of April 30, 2003.                                      1

                          Statement of Assets and Liabilities at April 30, 2003 and October 31, 2002.         4

                          Statement of Operations for the six-month periods ended April 30, 2003 and
                          April 30, 2002.                                                                     5

                          Statement of Operations for the three-month periods ended April 30, 2003
                          and April 30, 2002.                                                                 6

                          Statement of Changes in Net Assets for the six-month periods ended April
                          30, 2003 and April 30, 2002.                                                        7

                          Statement of Cash Flows for the six-month periods ended April 30, 2003 and
                          April 30, 2002.                                                                     8

                          Financial Highlights for the six-month periods ended April 30, 2003 and
                          April 30, 2002.                                                                     9

                          Notes to Financial Statements.                                                     10

                          Independent Accountant's Review Report.                                            13

 Item 2.                  Management's Discussion and Analysis of Financial Condition and Results of         14
                          Operations.

 Item 3.                  Quantitative and Qualitative Disclosures about Market Risk.                        16

 Item 4.                  Controls and Procedures.                                                           16

PART II.                  OTHER INFORMATION

 Item 1.                  Legal Proceedings.                                                                 17

 Item 2.                  Changes in Securities and Use of Proceeds.                                         17

 Item 3.                  Defaults Upon Senior Securities.                                                   17

 Item 4.                  Submission of Matters to a Vote of Security Holders.                               17
</TABLE>

<PAGE>

<TABLE>
<S>                                                                             <C>
Item 5.                   Other Information.                                    17

Item 6.                   Exhibits and Reports on Form 8-K.                     17

SIGNATURES                                                                      18

CERTIFICATIONS                                                                  18
</TABLE>

<PAGE>

PART I.   FINANCIAL INFORMATION

Item 1.  Financial Statements.


Excelsior Venture Partners III, LLC
Portfolio of Investments (Unaudited)
--------------------------------------------------------------------------------

                                                         April 30, 2003
                                                      --------------------

PORTFOLIO STRUCTURE
-------------------

    SHORT-TERM INVESTMENTS:

         AGENCY OBLIGATIONS                 $   70,977,734            55.09%
         INVESTMENT COMPANIES                    1,854,639             1.43%

    PRIVATE COMPANIES                           54,240,369            42.10%

    PRIVATE INVESTMENT FUNDS                     2,406,507             1.87%

                                            --------------   --------------

    TOTAL INVESTMENTS                          129,479,249           100.49%
      OTHER ASSETS & LIABILITIES (NET)            (630,856)           (0.49)%
                                            --------------   --------------

    NET ASSETS                              $  128,848,393           100.00%
                                            ==============   ==============

      Notes to Financial Statements are an integral part of these Financial
                                   Statements.

                                        1

<PAGE>

Excelsior Venture Partners III, LLC
Portfolio of Investments (Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                             April 30, 2003
                                                                                             --------------

  Principal                                                                          Acquisition          Value
Amount/Shares                                                                          Date ##          (Note 1)
-------------                                                                          -------          --------
<S>                                                                                <C>               <C>
    AGENCY OBLIGATIONS - 55.09%
    $50,000,000       Federal Home Loan Mortgage Discount Notes 1.155%, 5/13/03                      $   49,981,088
     21,000,000       Federal Farm Credit Bank Discount Notes 1.15%, 5/06/03                             20,996,646
                                                                                                     --------------
        Total - Agency Obligations (Cost $70,977,734)                                                    70,977,734
                                                                                                     --------------

    PRIVATE COMPANIES **, #, @ - 42.10%
     Preferred Stock - 42.10%
        647,948   Adeza Biomedical Corporation, Series 5 Preferred                 09/01                  3,000,000
      2,419,355   Ancile Pharmaceuticals, Inc., Series D Preferred                 11/01                          -
      1,314,285   Archemix Corporation, Series A Preferred                     08/02 & 01/03              1,314,285
     44,247,788   Cenquest, Inc., Series 1 Preferred                               07/01                          -
      3,099,999   Ethertronics, Inc., Series B Preferred                       06/01 & 09/02              4,650,000
      1,879,699   Genoptix, Inc., Series B Preferred                               12/01                  2,500,000
      1,523,810   Gyration, Inc., Series C2 Preferred                               3/03                  4,000,000
      4,330,504   LightConnect, Inc., Series B Preferred                           07/01                    948,562
     12,292,441   LightConnect, Inc., Series C Preferred                           01/03                    992,000
      4,374,256   LogicLibrary, Inc., Series A Preferred                           01/02                  2,000,000
     15,739,638   MIDAS Vision Systems, Inc., Series C Preferred                   12/01                    499,341
        933,593   MIDAS Vision Systems, Inc., Series A-1 Preferred                  3/03                  1,054,960
      7,089,552   Monterey Design Systems, Inc., Series 1 Preferred                12/01                  4,750,000
        956,234   NanoOpto Corporation, Series A-1 Preferred                   10/01 & 03/02              1,115,606
      1,538,461   NetLogic Microsystems, Inc., Series D Preferred                  08/01                  5,000,000
      5,333,333   OpVista, Inc., Series B Preferred                                07/01                  4,000,000
     16,000,000   Pilot Software Acquisition Corp., Series A Preferred          5/02 & 04/03              4,000,000
        517,260   Senomyx, Inc., Series E Preferred                                11/01                  1,500,000
      2,211,898   Silverback Systems, Inc., Series B Preferred                     02/02                  1,415,615
     15,463,918   Silverback Systems, Inc., Series C Preferred                     03/03                  1,500,000
      4,166,667   Tensys Medical, Inc., Series C Preferred                         03/02                  5,000,000
      3,096,551   Virtual Silicon Technology, Inc., Series C Preferred             12/01                  5,000,000
                                                                                                     --------------
                                                                                                         54,240,369

     Notes - 0.00%
        850,000       Ancile Pharmaceuticals, Inc., Bridge Note 6%                 10/02 & 01/03                  -
                                                                                                     --------------

     Warrants - 0.00%
              2       Ancile Pharmaceuticals, Inc., Warrant                        10/02 & 01/03                  -
        115,000       Ethertronics, Inc., Warrant                                      09/02                      -
                                                                                                     --------------
                                                                                                                  -

        Total - Private Companies (Cost $68,758,072)                                                     54,240,369
                                                                                                     --------------

    PRIVATE INVESTMENT FUNDS **, # - 1.87%
                      Advanced Technology Ventures VII, L.P.                        08/01-03/03             356,519
                      Burrill Life Sciences Capital Fund                               12/02                252,203
                      CHL Medical Partners II, L.P.                                 01/02-01/03             383,909
                      Morgenthaler Partners VII, L.P.                               07/01-04/03             616,367
                      Prospect Venture Partners II, L.P.                            06/01-04/03             540,109
                      Tallwood II, L.P                                              12/02-02/03             257,400
                                                                                                     --------------
        Total - Private Investment Funds (Cost $2,890,428)                                                2,406,507
                                                                                                     --------------
</TABLE>

      Notes to Financial Statements are an integral part of these Financial
                                  Statements.

                                       2

<PAGE>

    Excelsior Venture Partners III, LLC
    Portfolio of Investments (Unaudited) Continued
    ----------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                      April 30, 2003
                                                                                      --------------
    <S>                                                                               <C>
    INVESTMENT COMPANIES - 1.43%
       1,854,639   Dreyfus Government Cash Management Account (Cost $1,854,639)       $     1,854,639
                                                                                      ---------------

    TOTAL INVESTMENTS (Cost $144,480,873*) - 100.49%                                  $   129,479,249
    OTHER ASSETS & LIABILITIES (NET) - (0.49)%                                               (630,856)
                                                                                      ---------------
    NET ASSETS - 100.00%                                                              $   128,848,393
                                                                                      ===============
</TABLE>

*  Aggregate cost for federal tax and book purposes.
** Restricted as to public resale. Acquired between June 1, 2001 and April 30,
   2003. Total cost of restricted securities at April 30, 2003 aggregated
   $71,648,500. Total market value of restricted securities owned at April 30,
   2003 was $56,646,876 or 43.97% of net assets.
#  Non-income producing securities.
## Required disclosure for restricted securities only.
@  At April 30, 2003 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. Total market value of affiliated securities owned at
   April 30, 2003 was $54,240,369.

      Notes to Financial Statements are an integral part of these Financial
                                   Statements.

                                       3

<PAGE>

Excelsior Venture Partners III, LLC
Statement of Assets and Liabilities (Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                   April 30, 2003               October 31, 2002
                                                                 ------------------            ------------------
                                                                    (Unaudited)
<S>                                                              <C>                           <C>
ASSETS:

Investment Securities, at Cost                                   $      144,480,873            $      144,846,435
                                                                 ==================            ==================

Investment Securities, at Value                                  $      129,479,249            $      138,512,604

Cash and Cash Equivalents                                                   143,954                           ---
Receivables:
     Interest                                                                 1,316                         1,933
     Other Receivables                                                        1,945                       996,290
Prepaid Assets                                                               31,260                        64,783
                                                                 ------------------            ------------------

         Total Assets                                                   129,657,724                   139,575,610
                                                                 ------------------            ------------------

LIABILITIES:

Management Fees Payable (Note 2)                                            628,356                       697,027
Professional Fees Payable                                                    80,820                       202,991
Administration Fees Payable (Note 2)                                         44,890                        38,960
Board of Managers' Fees Payable (Note 2)                                     29,753                        60,000
Other Payables                                                               25,512                        81,617
                                                                 ------------------            ------------------

         Total Liabilities                                                  809,331                     1,080,595
                                                                 ------------------            ------------------

NET ASSETS                                                       $      128,848,393            $      138,495,015
                                                                 ==================            ==================

NET ASSETS consist of:

Accumulated Undistributed Net Investment Loss                    $       (2,294,112)           $       (1,315,299)
Accumulated Net Realized Gain on Investments                                  7,347                         7,363
Net Unrealized Depreciation on Investments                              (15,001,624)                   (6,333,831)
Paid in Capital                                                         146,136,782                   146,136,782
                                                                 ------------------            ------------------

         Total Net Assets                                        $      128,848,393            $      138,495,015
                                                                 ==================            ==================

Units of Membership Interest Outstanding                                    295,210                       295,210
                                                                 ------------------            ------------------

NET ASSET VALUE PER UNIT                                         $           436.46            $           469.14
                                                                 ==================            ==================
</TABLE>

      Notes to Financial Statements are an integral part of these Financial
                                  Statements.

                                       4

<PAGE>

Excelsior Venture Partners III, LLC
Statement of Operations (Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                        Six Months Ended April 30,

                                                                      2003                       2002
                                                             -----------------------     --------------------
<S>                                                          <C>                         <C>
INVESTMENT INCOME:

Interest Income                                              $               499,480     $            988,746
Dividend Income                                                                4,881                        -
                                                             -----------------------     --------------------
         Total Income                                                        504,361                  988,746
                                                             -----------------------     --------------------

EXPENSES:

Management Fees (Note 2)                                                   1,296,800                1,450,460
Organizational Expenses                                                            -                  (93,880)
Administration Fees (Note 2)                                                  75,394                   80,148
Insurance Expense                                                             33,523                   12,780
Board of Managers' Fees (Note 2)                                              29,753                   52,753
Professional Fees                                                             24,795                  142,464
Custodian Fees                                                                10,510                    8,926
Miscellaneous Fees                                                            12,399                   12,398
                                                             -----------------------     --------------------
         Total Expenses                                                    1,483,174                1,666,049

NET INVESTMENT LOSS                                                         (978,813)                (677,303)
                                                             -----------------------     --------------------

REALIZED AND UNREALIZED GAIN
  (LOSS) ON INVESTMENTS

Net Realized Gain (Loss) on Security Transactions                                (16)                     764

Change in Unrealized Depreciation on Investments                          (8,667,793)                 (72,842)
                                                             -----------------------     --------------------

NET REALIZED AND UNREALIZED
  LOSS ON INVESTMENTS                                                     (8,667,809)                 (72,078)
                                                             -----------------------     --------------------

NET DECREASE IN NET
  ASSETS RESULTING FROM OPERATIONS                           $            (9,646,622)    $           (749,381)
                                                             =======================     ====================
</TABLE>

           Notes to Financial Statements are an integral part of these
                              Financial Statements.

                                        5

<PAGE>

Excelsior Venture Partners III, LLC
Statement of Operations (Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                Three Months Ended April 30,

                                                                2003                    2002
                                                         ------------------     -------------------
<S>                                                      <C>                    <C>
INVESTMENT INCOME:

Interest Income                                          $          208,229     $           433,479
Dividend Income                                                       2,718                       -
                                                         ------------------     -------------------
         Total Income                                               210,947                 433,479
                                                         ------------------     -------------------

EXPENSES:

Management Fees (Note 2)                                            628,357                 712,339
Organizational Expenses                                                   -                 (93,880)
Administration Fees (Note 2)                                         36,415                  33,152
Insurance Expense                                                    16,269                   6,284
Board of Managers' Fees (Note 2)                                     14,630                  14,630
Professional Fees                                                    12,192                  92,053
Custodian Fees                                                        5,263                   4,389
Miscellaneous Fees                                                    6,096                   8,617
                                                         ------------------     -------------------
         Total Expenses                                             719,222                 777,584

NET INVESTMENT LOSS                                                (508,275)               (344,105)
                                                         ------------------     -------------------

REALIZED AND UNREALIZED GAIN
  (LOSS) ON INVESTMENTS

Net Realized Gain (Loss) on Security Transactions                       (20)                    165

Change in Unrealized Depreciation on Investments                 (3,242,135)                (54,148)
                                                         ------------------     -------------------

NET REALIZED AND UNREALIZED
  LOSS ON INVESTMENTS                                            (3,242,155)                (53,983)
                                                         ------------------     -------------------

NET DECREASE IN NET
  ASSETS RESULTING FROM OPERATIONS                       $       (3,750,430)    $          (398,088)
                                                         ==================     ===================
</TABLE>

           Notes to Financial Statements are an integral part of these
                              Financial Statements.

                                        6

<PAGE>

Excelsior Venture Partners III, LLC
Statement of Changes in Net Assets (Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                    Six Months Ended April 30,

                                                               2003                            2002
                                                      ----------------------          ----------------------
<S>                                                   <C>                             <C>
OPERATIONS:

Net Investment Loss                                   $             (978,813)         $             (677,303)
Net Realized Gain (Loss) on Investments                                  (16)                            764
Change in Unrealized
  Depreciation on Investments                                     (8,667,793)                        (72,842)
                                                      ----------------------          ----------------------
Net Decrease in Net Assets
  Resulting from Operations                                       (9,646,622)                       (749,381)
                                                      ----------------------          ----------------------

NET DECREASE IN NET ASSETS                                        (9,646,622)                       (749,381)

NET ASSETS:

Beginning of Period                                              138,495,015                     146,420,778
                                                      ----------------------          ----------------------

End of Period                                         $          128,848,393          $          145,671,397
                                                      ======================          ======================
</TABLE>

           Notes to Financial Statements are an integral part of these
                              Financial Statements.

                                        7

<PAGE>

Excelsior Venture Partners III, LLC
Statement of Cash Flows (Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                       Six Months Ended April  30,

                                                                                       2003                   2002
                                                                                 ----------------------------------------
   <S>                                                                           <C>                   <C>
   CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Decrease in Net Assets Resulting from Operations....................    $     (9,646,622)     $         (749,381)
   Adjustments to reconcile net decrease in net assets from
     operations to net cash provided by/ used in operating activities:
       Change in unrealized depreciation on investments......................           8,667,793                  72,842
       Purchase of investments...............................................         (10,572,673)            (30,076,827)
       Change in short-term investments......................................          10,938,235              25,824,595
       Decrease (increase) in interest receivable............................                 617                  (4,447)
       Decrease in other receivable..........................................             994,345                  50,000
       Decrease in prepaid insurance.........................................              33,523                  12,779
       Decrease in expenses payable..........................................            (271,264)               (862,683)
                                                                                 ----------------      ------------------

         Net cash provided by/ used in operating activities..................             143,954              (5,733,122)
                                                                                 ----------------      ------------------

         Net change in cash..................................................             143,954              (5,733,122)
                                                                                 ----------------      ------------------

           Cash at beginning of period.......................................                  --               8,433,122
                                                                                 ----------------      ------------------
           Cash at end of period.............................................    $        143,954      $        2,700,000
                                                                                 ================      ==================
</TABLE>

           Notes to Financial Statements are an integral part of these
                              Financial Statements.

                                        8

<PAGE>

Excelsior Venture Partners III, LLC
Financial Highlights (Unaudited)
--------------------------------------------------------------------------------

Per Unit Operating Performance:  (1)

<TABLE>
<CAPTION>
                                                                             Six Months Ended April 30,

                                                                        2003                          2002
                                                                 ------------------            ------------------
<S>                                                              <C>                           <C>
   NET ASSET VALUE, BEGINNING OF PERIOD .......................  $           469.14            $           495.99

   INCOME FROM INVESTMENT OPERATIONS:
     Net investment loss ......................................               (3.32)                        (2.29)
     Net realized and unrealized loss on investment
      transactions. ...........................................              (29.36)                        (0.25)
                                                                 ------------------            ------------------
       Total from investment operations .......................              (32.68)                        (2.54)
                                                                 ------------------            ------------------

   NET ASSET VALUE, END OF PERIOD .............................  $           436.46            $           493.45
   TOTAL NET ASSET VALUE RETURN (3), (4) ......................               (6.97)%                       (0.51)%
                                                                 ==================            ==================

   RATIOS AND SUPPLEMENTAL DATA:
     Net assets, end of period (000's) ........................  $          128,848            $          145,671
     Ratios to average net assets: (2)
       Net expenses ...........................................                2.23%                         2.28%
       Net investment loss ....................................               (1.47)%                       (0.93)%
     Portfolio Turnover Rate ..................................                0.00%                         0.00%
</TABLE>

(1)  Selected data for a unit of membership interest outstanding through each
     period.
(2)  Annualized
(3)  Not annualized
(4)  Total investment 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 total investment return is
     not calculated.

      Notes to Financial Statements are an integral part of these Financial
                                  Statements.

                                       9

<PAGE>

                       Excelsior Venture Partners III, LLC

                    Notes to Financial Statements (Unaudited)

                                 April 30, 2003

Note 1 -- 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 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, two-year extensions) from
the final subscription closing, 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.

     Certain costs incurred in connection with the initial offering of units
totaled $1,468,218. Each member's 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 financial information for the Company as of April 30, 2003 and 2002 and
for the three and six-month periods then ended is unaudited, but includes all
adjustments (consisting only of normal recurring accruals) which, in the opinion
of management are necessary in order to make the financial statements not
misleading at such dates and for those periods. These financial statements have
been prepared in accordance with the instructions for Form 10-Q and, therefore,
do not include all information and footnotes required by accounting principles
generally accepted in the United States. These financial statements should be
read in conjunction with the audited financial statements and related notes
included in the Company's Form 10-K for the year ended October 31, 2002.
Operating results for the three or six months ended April 30, 2003 are not
necessarily indicative of the results that may be expected for the entire year.

     A. Investment Valuation:

          The Company values portfolio securities quarterly and at such other
     times as, in the 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
     Advisers (as defined below) or a committee of the Board under the
     supervision of the Board pursuant to certain valuation procedures
     summarized below. Securities having remaining maturities of 60 days or less
     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" method 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

                                       10

<PAGE>

     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 Advisers
     or a committee 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.

          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 are deemed to be unreliable by the Investment Advisers,
     the Investment Advisers, 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.

          At April 30, 2003, market quotations were not readily available for
     securities valued at $56,646,876. Such securities were valued by the
     Investment Advisers, 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.

     B. Security transactions and investment income:

          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 investments, is earned from settlement date and is recorded on
     the accrual basis. Dividend income is recorded on the ex-dividend date.

     C. 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.

          At April 30, 2003, the cost of investment for Federal income tax
     purposes was $144,480,873. At April 30, 2003, the net and gross unrealized
     depreciation amounted to ($15,001,624).

     D. Dividends to members:

          The Company will distribute all cash that the Investment Adviser does
     not expect to use in the operation of the Company. Due to the nature of the
     Company's investments, investors should not expect distributions of cash or
     property during the first several years of the Company's operations.

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

     U.S. Trust Company served during the reporting period as the Investment
Adviser to the Company pursuant to an Investment Advisory Agreement with the
Company. 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 average quarterly net assets through the fifth anniversary of the
first closing date and 1.00% of net assets thereafter. Pursuant to sub-advisory
agreements among the Company, U.S. Trust Company, United States Trust Company of
New York ("U.S. Trust NY") and U.S. Trust Company, N.A., U.S. Trust NY and U.S.
Trust Company, N.A. served during the reporting period as the investment
sub-advisers to the Company and received an investment management fee from the
Investment Adviser.

                                       11

<PAGE>

     In addition to the management fee, U.S. Trust Company is entitled to
allocations and distributions equal to the Incentive Carried Interest. The
Incentive Carried Interest is an amount equal to 20% of the Company's cumulative
realized capital gains on Direct Investments, net of cumulative realized capital
losses and current net unrealized capital depreciation on all of the Company's
investments and cumulative net expenses of the Company. 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.
The Incentive Carried Interest will be determined annually as of the end of each
calendar year.

     U.S. Trust NY is a New York state-chartered bank and trust company and a
member of the Federal Reserve System. Effective June 1, 2003, U.S. Trust Company
merged into U.S. Trust Company, N.A., a nationally chartered bank. As a result,
U.S. Trust Company, N.A., acting through its registered investment advisory
division, U.S. Trust Company, N.A. Asset Management Division, will serve as
Investment Adviser to the Company. Pursuant to an assumption agreement dated
June 1, 2003, U.S. Trust Company, N.A. has assumed the duties and obligations of
U.S. Trust Company under the Agreement. The merger will have no impact on the
management or operations of the investment advisory functions performed for the
Company and does not constitute a change in control. U.S. Trust NY and U.S.
Trust Company, N.A. are each a wholly-owned subsidiary of U.S. Trust
Corporation, a registered bank holding company. U.S. Trust Corporation is an
indirect wholly-owned subsidiary of The Charles Schwab Corporation ("Schwab").

     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 $15,000 for taxation services and (iii) reimburses PFPC
for out-of-pocket expenses.

     Charles Schwab & Co., Inc. (the "Distributor"), the principal subsidiary of
Schwab, serves as the Company's distributor for the offering of units. U.S.
Trust Company paid the Distributor from its own assets an amount equal to 0.02%
of the total of all subscriptions received in this offering. U.S. Trust Company
or an affiliate will pay 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 this offering.

     Each member of the Board of Managers receives $7,000 annually, $2,000 per
meeting attended and is reimbursed for expenses incurred for attending meetings.
No person who is an officer, manager or employee of U.S. Trust Corporation, or
its subsidiaries, who serves as an officer, manager or employee of the Company
receives any compensation from the Company.

     As of April 30, 2003, Excelsior Venture Investors III, LLC had an
investment in the Company of $81,797,190. This represents an ownership interest
of 63.48% in the Company.

Note 3 -- Purchases and Sales of Securities:

     Excluding short-term investments, the Company had $10,572,673 in purchases
and $0 in sales of securities for the six-month period ended April 30, 2003.
Excluding short-term investments, the Company had $30,076,827 in purchases and
$0 in sales of securities for the six-month period ended April 30, 2002.

Note 4 -- Commitments

     As of April 30, 2003, the Company had outstanding investment commitments
totaling $14,109,571.

                                       12

<PAGE>


Note 5 -- Transactions with Affiliated Portfolio Companies


     An affiliated company is a company in which the Company has ownership of at
least 5% of the voting securities. The Company did not receive dividend or
interest income from affiliated companies during the period ended April 30,
2003. Transactions with companies, which are or were affiliates were as follows:


<TABLE>
<CAPTION>
                                                                        For the Six Month Period Ended April 30, 2003
                                                                       ------------------------------------------------

                                                                                                                       Cumulative
                                                        October 31,                     Sale/Merger      Realized         Value
Affiliate                                               2002 Value       Purchases        Proceeds      Gain (Loss)      (Note 1)
------------------------------------------------      --------------   -------------  --------------  --------------  ------------
<S>                                                   <C>              <C>            <C>             <C>             <C>
Archemix Corporation, Series A
   Preferred                                          $    628,571     $   685,714           --             --        $  1,314,285
Ancile Pharmaceuticals, Inc., Bridge Notes 6%              600,000         250,000           --             --                  --
Ancile Pharmaceuticals, Inc.,Warrant                            --              --           --             --                  --
Gyration, Inc., Series C2 Preferred                             --       4,000,000           --             --           4,000,000
LightConnect, Inc., Series B Preferred                     948,562              --           --             --             948,562
LightConnect, Inc., Series C Preferred                          --         992,000           --             --             992,000
MIDAS Vision Systems, Inc., Series A-1 Preferred                --       1,054,960           --             --           1,054,960
MIDAS Vision Systems, Inc., Series C Preferred           4,000,000              --           --             --             499,341
Pilot Software Acquisition Corp.,  Series A
   Preferred                                             3,000,000       1,000,000           --             --           4,000,000
Silverback Systems, Inc., Series B Preferred             1,415,614              --           --             --           1,415,615
Silverback Systems, Inc., Series C Preferred                    --       1,500,000           --             --           1,500,000
                                                      ------------     -----------    --------------  -------------   ------------
       Total                                          $ 10,592,747     $ 9,482,674           --             --        $ 15,724,763
                                                      ------------     -----------    --------------  -------------   ------------
</TABLE>


                     Independent Accountant's Review Report

To the Members and Board of Managers of
Excelsior Venture Partners III, LLC

We have reviewed the accompanying statement of assets and liabilities of
Excelsior Venture Partners III, LLC ("the Fund"), including the portfolio of
investments, as of April 30, 2003, the related statements of operations for the
three-month and six-month periods ended April 30, 2003 and 2002, and the
statement of changes in net assets, the statement of cash flows, and the
financial highlights for the six-month periods ended April 30, 2003 and 2002.
These financial statements and financial highlights are the responsibility of
the Fund's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data, and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States, which will be
performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements and financial highlights
referred to above for them to be in conformity with accounting principles
generally accepted in the United States.

We have previously audited, in accordance with auditing standards generally
accepted in the United States, the statement of assets and liabilities,
including the portfolio of investments, as of October 31, 2002, the related
statements of

                                       13

<PAGE>

operations and cash flows for the year then ended, the statement of changes in
net assets and the financial highlights for the period from April 5, 2001
(commencement of operations) to October 31, 2002 (not presented herein) and in
our report dated December 17, 2002, we expressed an unqualified opinion on such
financial statements and financial highlights.

                                ERNST & YOUNG LLP

Boston, Massachusetts
June 11, 2003

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

Six-month Period Ended April 30, 2003 as Compared to the Similar Period in 2002

Realized and Unrealized Gains and Losses from Portfolio Investments

         For the six-month periods ended April 30, 2003 and 2002, the Company
had a net realized gain/(loss) on security transactions of ($16) and $764,
respectively. For the six-month periods ended April 30, 2003 and 2002, the
Company had a net change in unrealized depreciation on investments of
($8,667,793) and ($72,842), respectively. The realized gains/(losses) were
principally the result of the Company's sale of short-term investments during
these periods. The change in unrealized depreciation was principally the result
of write-downs taken during the period ended April 30, 2003. For the period
ended April 30, 2002, the change in unrealized depreciation was principally the
result of a decline in the value of short-term investments.

Investment Income and Expenses

         For the six-month period ended April 30, 2003, the Company had
investment income of $504,361 and net operating expenses of $1,483,174,
resulting in a net investment loss of ($978,813). In comparison, for the similar
period ended April 30, 2002, the Company had investment income of $988,746 and
net operating expenses of $1,666,049, resulting in a net investment loss of
($677,303). This decrease in net investment income resulted from the negative
impact of the decline in short-term interest rates, along with a decrease in
assets invested in short-term instruments. The decrease in operating expenses
was due to a decline in management fees as a result of reduced net assets during
the period.

         For the three-month period ended April 30, 2003, the Company had
investment income of $210,947 and net operating expenses of $719,222, resulting
in a net investment loss of ($508,275). In comparison, for the similar period
ended April 30, 2002, the Company had investment income of $433,479 and net
operating expenses of $777,584, resulting in a net investment loss of
($344,105). This decrease in net investment income also resulted from the
negative impact of the decline in short-term interest rates, along with a
decrease in assets invested in short-term instruments. The decrease in operating
expenses was also due to a decline in management fees as a result of reduced net
assets during the period.

         U.S. Trust Company (the "Investment Adviser") and United States Trust
Company of New York and U.S. Trust Company, N.A. (each an "Investment
Sub-Adviser" and together with U.S. Trust Company, the "Investment Advisers")
provide investment management and administrative services required for the
operation of the Company. In consideration of the services rendered by the
Investment Advisers, the Company pays a management fee based upon a percentage
of the net assets of the Company invested or committed to be invested in certain
types of investments and an incentive fee based in part on a percentage of
realized capital gains of the Company. Such fee is determined and payable
quarterly. For the six-month periods ended April 30, 2003 and 2002, the
Investment Advisers earned $1,296,800 and $1,450,460 in management fees,
respectively. Management fees declined over the period ended April 30, 2003 due
to the decline in net assets.

                                       14

<PAGE>

Net Assets

     At April 30, 2003, the Company's net assets were $128,848,393, or a net
asset value per unit of membership interest of $436.46. This represents a
decrease of ($9,646,622) from net assets of $138,495,015, or a net asset value
per unit of membership interest of $469.14, at October 31, 2002. The decrease
resulted from (i) a $3,850,000 write-down of Ancile Pharmaceuticals, Inc., a
private company investment, (ii) a $3,550,658 write-down of MIDAS Vision
Systems, Inc., (iii) a $1,115,606 write-down of NanoOpto Corporation, a private
company investment, and (iv) operating expenses exceeding investment income
during the period primarily due to a decline in net investment income and the
management fee accrual

Liquidity and Capital Resources

     The Company will focus 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 companies. The Company invests its available cash in short-term
investments of marketable securities pending distribution to investors.

     At April 30, 2003, the Company held $143,954 in cash and $72,832,373 in
short-term investments as compared to $0 in cash and $83,770,608 in investments
at October 31, 2002. The decrease in short-term investments from October 31,
2002 was due to follow-on investments in private companies as wells as capital
calls for private investment funds. The Company, during this period funded
additional capital per its commitments to Advanced Technology Ventures VII,
L.P., Burrill Life Sciences Capital Fund, CHL Medical Partners II, L.P.,
Morgenthaler Partners VII, L.P., Prospect Venture Partners II, L.P., and
Tallwood Venture Partners II, L.P., each a private investment fund. In
connection with the Company's total commitments to private funds in the amount
of $17,000,000 since inception, the Company, through April 30, 2003, has
contributed $2,890,429 or 17% of the total capital committed thus far. The
Company participated in follow-on financing rounds for six of its private
companies: 1) LightConnect, Inc. for $992,000, 2) Ancile Pharmaceuticals for
$250,000, 3) Archemix Corporation for $685,714, 4) MIDAS Vision Systems Series
A-1 Preferred for $1,054,960, 5) Pilot Software Series A Preferred for
$1,000,000, and 6) Silverback Systems Series C Preferred for $1,500,000. The
Company also closed and funded one new private company investment in Gyration,
Inc. Series C2 Preferred for $4,000,000.

     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.

Application of Critical Accounting Policies

     Under the supervision of the Company's Valuation and Audit Committees,
consisting of the independent Managers of the Company, the Investment Advisers
make 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 44.0% of the Company's net assets. During the six-month
period ended April 30, 2003, changes to these estimates, i.e. changes in the
valuations of private investments, resulted in an $8.7 million decrease in net
asset value.

     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

                                       15

<PAGE>

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 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 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 are deemed to be
unreliable by the Investment Advisers, the Investment Advisers, 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 Advisers also make 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,
currently representing 44.0% of net assets, which are not publicly traded. These
investments are recorded at fair value as determined by the Investment Advisers
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. As of April 30, 2003, the Company
directly held no investments in the securities of public companies.

Item 4. Controls and Procedures.

     (a) The Company has established and maintained disclosure controls and
procedures which are designed to provide reasonable assurance that material
information relating to the Company is made known to its Co-Chief Executive
Officers and its Treasurer. The Company has established a Disclosure Committee,
which is made up of several key management employees of the Investment Adviser
and its affiliates, that report directly to the Company's Co-Chief Executive
Officers and Treasurer. The Disclosure Committee monitors and evaluates these
disclosure controls and procedures. The Co-Chief Executive Officers and
Treasurer have evaluated the effectiveness of the Company's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
report. Based on this evaluation, the Co-Chief Executive Officers and Treasurer
have concluded that the Company's disclosure controls and procedures were
effective in providing reasonable assurance that material information relating
to the Company was made known to them during the period covered in this report.
However, at the time the evaluation occurred, it was noted that the quarterly
reports of the Company filed on Form 10-Q for the fiscal quarters ended April
30, 2001 and 2002 and July 31, 2001 and 2002 did not include Statements of
Operations for the three- month periods then ended and for the corresponding
periods of the prior years. Such information is included in this Quarterly
Report on Form 10-Q, and the Company will file appropriate amendments to its
prior Reports.

     (b) Changes in Internal Controls. There were no significant changes in the
Company's internal controls 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. Accordingly, no corrective actions were required or undertaken.

PART II. OTHER INFORMATION

                                       16

<PAGE>


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.

         15 Independent Accountant's Acknowledgement Letter

         99.1 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.

                                       17

<PAGE>

                                   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:  June 16, 2003                By: /s/ David I. Fann
                                        --------------------------------
                                            David I. Fann
                                            Co-Chief Executive Officer

Date:  June 16, 2003                By: /s/ Douglas A. Lindgren
                                        --------------------------------
                                            Douglas A. Lindgren
                                            Co-Chief Executive Officer

Date:  June 16, 2003                By: /s/ Robert F. Aufenanger
                                        --------------------------------
                                            Robert F. Aufenanger
                                            Treasurer
                                            (Principal Financial Officer)

                   CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

I, David I. Fann, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Excelsior Venture
Partners III, LLC;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

                                       18

<PAGE>

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: June 16, 2003

/s/ David I. Fann
----------------------
David I. Fann, Co-Chief Executive Officer

                   CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

I, Douglas A. Lindgren, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Excelsior Venture
Partners III, LLC;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

                                       19

<PAGE>


6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: June 16, 2003

/s/ Douglas A. Lindgren
--------------------------
Douglas A. Lindgren, Co-Chief Executive Officer

                           CERTIFICATION OF TREASURER

I, Robert F. Aufenanger, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Excelsior Venture
Partners III, LLC;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: June 16, 2003

/s/ Robert F. Aufenanger
------------------------
Robert F. Aufenanger, Treasurer

                                       20