EXHIBIT 99.2

Rand Capital Corporation
Model Valuation Policy

A. General

|1. |  | The Board of Directors has sole responsibility for determining the
      Asset Value of each of the Loans and Investments and of the portfolio in
      the aggregate.                                                                                                                                                         
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|2. |  | Loans and Investments will be valued individually and in the
      aggregate on a quarterly basis. Fiscal year-end valuations are audited as
      set forth in "Accounting Standards and Financial Reporting Requirements
      for Small Business Investment Companies" Section IV, Paragraph D.                             
|3. |  | This valuation Policy is intended to provide a consistent,
      conservative basis for establishing the Asset Value of the portfolio. The
      Policy presumes that Loans and Investments are acquired with the intent
      that they are to be held until maturity or disposed of in the ordinary
      course of business.

B. Interest-Bearing Securities

|1. |  | Loans will be valued in an amount not greater than cost, with
      Unrealized Depreciation being recognized when value is impaired. The
      valuation of loans and associated interest receivables on interest-bearing
      securities should reflect the portfolio concern's current and projected
      financial condition and operating results, its payment history and its
      ability to generate sufficient cash flow to make payments when due.                                                                                                                                                                                                                                                                                                                                                                                                                          
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|2. |  | When a valuation relies more heavily on an asset versus earnings
      approach, additional criteria should include the seniority of the debt,
      the nature of any pledged collateral, the extent to which the security
      interest is perfected, the net liquidation value of tangible business
      assets, and the personal integrity and overall financial standing of the
      owners of the business. In those instances where a loan valuation is based
      on an analysis of certain collateralized assets of a business or assets
      outside business, the valuation, should at a minimum consider the net
      liquidation value of the collateral after reasonable selling expenses.
      Under no circumstances, however, shall a valuation based on the underlying
      collateral be considered as justification for any type of loan
      appreciation.
|3. |  | Appropriate unrealized depreciation on past due interest which is
      converted into a security (or added to an existing security) should be
      recognized when collection is doubtful. Collection is presumed to be in
      doubt when one or both of the following conditions occur: (i) interest
      payments are more than 120 days past due; or (ii) the small company is in
      bankruptcy, insolvent, or there is substantial doubt about its ability to
      continue as a going concern.                                                                                                                                                                                                                                                                                                                                                                            
|4. |  | The carrying value on interest-bearing securities shall not be
      adjusted for changes in interest rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|5. |  | The valuation of convertible debt may be adjusted to reflect the
      value of the underlying equity security, net of the conversion price.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

C. Equity Securities - Private Companies

|1. |  | Investment cost is presumed to represent value except as indicated
      elsewhere in these guidelines.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|2. |  | Valuation should be reduced if a company's performance and potential
      have significantly deteriorated. If the factors which led to the reduction
      in valuation are overcome, the valuation may be restored.                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. |  | The anticipated pricing of a portfolio's concern future equity
      financing should be considered as a basis for recognizing Unrealized
      Depreciation, but not for Unrealized Appreciation. If it appears likely
      that equity will be sold in the foreseeable future at a price below the
      Licensee's current valuation, then that prospective offering price should
      be weighed in the valuation process.                                                                                                                                                                                                        
|4. |  | Valuation should be adjusted to a subsequent significant equity
      financing that includes a meaningful portion of the financing by a
      sophisticated, unrelated new investor. A subsequent significant equity
      financing that includes substantially the same group of investors as the
      prior financing should generally not be the basis for an adjustment in
      valuation. A financing at a lower price by a sophisticated new investor
      should cause a reduction in value of prior securities.                                                                                                            
|5. |  | If substantially all of a significant equity financing is invested
      by an investor whose objectives are in large part strategic, or if the
      financing is led by such an investor, it is generally presumed that no
      more than 50 percent of the increase in investment price compared to the
      prior significant equity financing is attributable to an increased
      valuation of the company.                                                                                                                                                                                                                    
|6. |  | Where a company has been self-financing and has had positive cash
      flow from operation for at least the past two fiscal years, Asset Value
      may be increased based on a very conservative financial measure regarding
      P/E ratios or cash flow multiples, or other appropriate financial measures
      of similar publicly-traded companies, discounted for illiquidity. Should
      the chosen valuation cease to be meaningful, the valuation may be restored
      to a cost basis, or in the event of significant deterioration in
      performance or potential, to a valuation below cost to reflect impairment.
|7. |  | With respect to portfolio companies that are
likely to face bankruptcy or discontinue operations for some other reason, liquidating value may be
      employed. This value may be determined by estimating the realizable value
      (often through professional appraisals or firm offers to purchase) of all
      assets and then subtracting all liabilities and all associated liquidation
      costs.                                                                                                                                                                                                                          
|8. |  | Warrants should be valued at the excess of the value of the underlying security over the exercise price.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

D. Equity Securities - Public Companies

|1. |  | Public securities should
      be valued as follows: (a) for over the counter stock, take the average of
      the bid price at the close for the valuation date and the preceding two
      days, and (b) for listed stocks, take the average of the bid price at the
      close for the valuation date and the preceding two days.                          
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|2. |  | The valuation of public
      securities that are restricted should be discounted appropriately until
      the securities may be freely traded. Such discounts typically range from
      10 percent to 40 percent, but the discounts can be more or less, depending
      upon the resale restrictions under securities laws or contractual
      agreements.
|3. |  | When the number of shares
      held is substantial in relation to the average daily trading volume, the
      valuation should be discounted by at least 10% and generally by more.