<PAGE>
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q



[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934
For the quarter ended March 31, 2003

[ ] 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: 811-1825



                            RAND CAPITAL CORPORATION
             (Exact Name of Registrant as specified in its Charter)

                    NEW YORK                                   16-0961359
 (State or Other Jurisdiction of Incorporation               (IRS Employer
                Or organization)                           Identification No.)

         2200 RAND BUILDING, BUFFALO, NY                          14203
    (Address of Principal executive offices)                   (Zip Code)

                                 (716) 853-0802
                (Registrant's Telephone No. Including Area Code)




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 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 an accelerated filer (as
defined in Rule 12B-2 of the Exchange Act)
Yes:        No  X
     ----      ---

Number of shares outstanding of each of the issuer's classes of common stock, as
of the latest practicable date (May 5, 2003): 5,723,034



<PAGE>




RAND CAPITAL CORPORATION
TABLE OF CONTENTS FOR FORM 10-Q

PART I. - FINANCIAL INFORMATION

         ITEM 1. FINANCIAL STATEMENTS

               Condensed Consolidated Statements of Financial Position as of
               March 31, 2003 and December 31, 2002

               Condensed Consolidated Statements of Operations for the Three
               Months Ended March 31, 2003 and 2002

               Condensed Consolidated Statements of Cash Flows for the Three
               Months Ended March 31, 2003 and 2002

               Condensed Consolidated Statements of Changes in Net Assets for
               the Three Months Ended March 31, 2003 and 2002

               Consolidated Schedule of Portfolio Investments as of March 31,
               2003

               Notes to Condensed Consolidated Financial Statements

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

         ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

         ITEM 4. Controls and Procedures


PART II - OTHER INFORMATION

         ITEM 1. Legal Proceedings

         ITEM 2. Changes in Securities and Use of Proceeds

         ITEM 3. Defaults Upon Senior Securities

         ITEM 4. Submission of Matters To a Vote of Security Holders

         ITEM 5. Other Information

         ITEM 6. Exhibits and Reports on Form 8-K


<PAGE>


                                     PART I.
                              FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


             CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                   AS OF MARCH 31, 2003 AND DECEMBER 31, 2002
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               MARCH 31,         DECEMBER 31,
                                                                                  2003               2002
-------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                 <C>
ASSETS
Investments at fair value (identified cost:
     at 3/31/2003 - $6,575,453, at 12/31/2002 - $6,225,453)                   $ 6,398,077         $ 6,076,187
Cash and cash equivalents                                                       2,501,419           3,092,189
Interest receivable (net of allowance of $13,167
     at 3/31/2003 and 12/31/2002)                                                 353,267             275,672
Deferred tax asset                                                                162,000             112,000
Promissory notes receivable                                                       103,250             113,470
Income taxes receivable                                                             2,109                   -
Other assets                                                                       56,713              16,155
                                                                              -----------         -----------
TOTAL ASSETS                                                                  $ 9,576,835         $ 9,685,673
                                                                              ===========         ===========

LIABILITIES AND STOCKHOLDERS' EQUITY (NET ASSETS)

LIABILITIES:
Accounts payable and accrued expenses                                         $    35,453         $    42,384
Income taxes payable                                                                    -               1,989
Deferred revenue                                                                   38,408              36,666

              Total liabilities                                                    73,861              81,039
                                                                              -----------         -----------

STOCKHOLDERS' EQUITY (NET ASSETS)

Common stock, $.10 par - shares authorized 10,000,000;
     shares issued 5,763,034                                                      576,304             576,304
Capital in excess of par value                                                  6,973,454           6,973,454
Accumulated net investment (loss)                                              (4,464,623)         (4,354,719)
Undistributed net realized gain on investments                                  6,613,044           6,574,710
Net unrealized (depreciation) on investments                                     (155,855)           (139,411)
Treasury stock at cost, 37,000 and 24,400 shares at 3/31/2003
        and 12/31/2002                                                            (39,350)            (25,704)
                                                                              -----------         -----------

              Net assets (per share 3/31/2003-$1.66, 12/31/2002-$1.67)          9,502,974           9,604,634
                                                                              -----------         -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $ 9,576,835         $ 9,685,673
                                                                              ===========         ===========
</TABLE>

See notes to the condensed consolidated financial statements.



<PAGE>


                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                             THREE MONTHS        THREE MONTHS
                                                                 ENDED              ENDED
                                                            MARCH 31, 2003      MARCH 31, 2002
----------------------------------------------------------------------------------------------
<S>                                                           <C>                 <C>
INVESTMENT INCOME
     Interest from portfolio companies                        $   101,909         $    30,456
     Interest from other investments                                7,845              30,680
     Other investment income                                        2,259               5,540
                                                              -----------         -----------
                                                                  112,013              66,676
                                                              -----------         -----------

EXPENSES
     Salaries                                                     116,415             112,469
     Employee benefits                                             25,349              33,264
     Directors' fees                                                5,500               6,750
     Professional fees                                             20,786              12,940
     Stockholders and office operating                             25,479              31,154
     Insurance                                                     10,800              11,250
     Corporate development                                          9,307               7,731
     Other operating                                                4,287               4,686
                                                              -----------         -----------
                                                                  217,923             220,244

     Organizational costs                                               -              67,594
                                                              -----------         -----------
      Total expenses                                              217,923             287,838
                                                              -----------         -----------

INVESTMENT (LOSS) BEFORE INCOME TAXES                            (105,910)           (221,162)
     Income tax provision                                           3,994              53,197
     Deferred income tax (benefit) expense                        (38,334)            254,376
                                                              -----------         -----------

NET INVESTMENT (LOSS)                                             (71,570)           (528,735)
                                                              -----------         -----------

REALIZED AND UNREALIZED GAIN ON INVESTMENTS
     Net gain on sales and dispositions                                 -             947,889
                                                              -----------         -----------

UNREALIZED (DEPRECIATION) APPRECIATION ON INVESTMENTS
     Beginning of period                                         (149,266)            853,874
     End of period                                               (177,376)            205,704
                                                              -----------         -----------
     Change in unrealized (depreciation)
            appreciation before income taxes                      (28,110)           (648,170)
     Deferred income tax (benefit)                                (11,666)           (276,376)
                                                              -----------         -----------

NET DECREASE IN UNREALIZED DEPRECIATION                           (16,444)           (371,794)
                                                              -----------         -----------

NET REALIZED AND UNREALIZED (LOSS) GAIN ON INVESTMENTS            (16,444)            576,095
                                                              -----------         -----------

NET (DECREASE) INCREASE IN NET ASSETS FROM OPERATIONS         $   (88,014)        $    47,360
                                                              ===========         ===========
Weighted average shares outstanding                             5,729,901           5,763,034

Basic and diluted net (decrease) increase in
     net assets from operations per share                     $     (0.02)        $      0.00
</TABLE>

See notes to the condensed consolidated financial statements.




<PAGE>


             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    THREE MONTHS       THREE MONTHS
                                                                        ENDED              ENDED
                                                                   MARCH 31, 2003     MARCH 31, 2002
----------------------------------------------------------------------------------------------------
<S>                                                                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (decrease) increase in net assets from operations               $   (88,014)        $    47,360
                                                                    -----------         -----------

Adjustments to reconcile net increase (decrease) in net
assets to net cash used in operating activities:
     Depreciation and amortization                                        1,500               3,900
     Change in unrealized appreciation
         of investments                                                  28,110             648,170
     Change in deferred taxes                                           (50,000)            (22,000)
     Increase in deferred revenue                                         1,742                   -
     Net realized gain on portfolio investments
                                                                              -            (947,889)
Changes in operating assets and liabilities:
     (Increase) in interest receivable                                  (77,595)            (27,456)
     (Increase) in other assets                                         (44,167)            (29,282)
     (Decrease) increase in accounts payable and other
        accrued liabilities                                              (8,920)                185
                                                                    -----------         -----------

         Total adjustments                                             (149,330)           (374,372)
                                                                    -----------         -----------

         Net cash used in operating activities                         (237,344)           (327,012)
                                                                    -----------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from sale of portfolio investments                              -           1,086,730
     Proceeds from loan repayments                                       10,220              11,075
     New portfolio investments                                         (350,000)                  -
                                                                    -----------         -----------

         Net cash (used in) provided by investing activities           (339,780)          1,097,805

CASH FLOWS FROM FINANCING ACTIVITIES:
     Purchase of treasury shares                                        (13,646)                  -
                                                                    -----------         -----------

NET (DECREASE) INCREASE IN CASH AND
     CASH EQUIVALENTS                                                  (590,770)            770,793

CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                                              3,092,189           5,941,517
                                                                    -----------         -----------

CASH AND CASH EQUIVALENTS,
     END OF PERIOD                                                  $ 2,501,419         $ 6,712,310
                                                                    ===========         ===========
</TABLE>

See notes to condensed consolidated financial statements.




<PAGE>



           CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
           FOR THE FOR THE THREE-MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   THREE-MONTHS        THREE-MONTHS
                                                                       ENDED               ENDED
                                                                  MARCH 31, 2003      MARCH 31, 2002
----------------------------------------------------------------------------------------------------
<S>                                                               <C>                  <C>
Net assets at beginning of period                                 $  9,604,634         $ 10,058,284
                                                                  ------------         ------------

Net investment (loss)                                                  (71,570)            (528,735)

Net realized gain on investments                                             -              947,889

Net decrease in unrealized depreciation on investments                 (16,444)            (371,794)
                                                                  ------------         ------------

     Net (decrease) increase in net assets from operations             (88,014)              47,360
                                                                  ------------         ------------

Purchase of treasury shares                                            (13,646)                   -
                                                                  ------------         ------------

Net assets at end of period                                       $  9,502,974         $ 10,105,644
                                                                  ============         ============
</TABLE>

See notes the condensed consolidated financial statements.
<PAGE>


        Schedule of Portfolio Investments at March 31, 2003 (unaudited)

<TABLE>
<CAPTION>
                                                          (e)                             (a)         (b)                    (c)
                                                                                         DATE
COMPANY AND BUSINESS                               TYPE OF INVESTMENT                  ACQUIRED      EQUITY      COST       VALUE
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                                     <C>            <C>      <C>       <C>
CONTRACT STAFFING                               Series A 8% Cumulative                  11/8/99        10%      $100,000  $100,000
Buffalo, NY. PEO providing human resource       preferred stock - 10,000 shares
administration for small businesses.
www.contract-staffing.com

DATAVIEW, LLC                                   5% Membership interest                  10/1/98         5%      310,357    155,179
Mt. Kisco, NY. Designs, develops and markets
browser based software for investment
professionals.
www.marketgauge.com

G-TEC NATURAL GAS SYSTEMS                       41.67% Class A Membership               8/31/99        42%      300,000    300,000
Buffalo, NY. Manufactures and distributes       interest. 8% cumulative dividend
systems that allow natural gas to be used
as an alternative fuel to gases.
www.gas-tec.com

INRAD, INC. (OTC: INRD.OB) *                    Series B Preferred Stock -              10/31/00        2%      115,000    102,700
Northvale, NJ.  Develops and manufactures       100 shares. 10% dividend.
products for laser photonics industry.          Common stock - 6,000 shares
www.inrad.com

+KIONIX, INC.                                   Series A Preferred Stock,               5/17/02       2.2%      750,000    750,000
Ithaca, NY.  Develops innovative MEMS           882,352 shares.
based technology applications.
www.kionix.com

MINRAD, INC.                                    608,193 Common shares.                  8/4/97          5%      919,422    508,500
Buffalo, NY. Developer of laser guided medical  56,020 Preferred Series A shares.
devices.   www.minrad.com                       13,767 Preferred Series B
                                                Stock Option - 10,000 shares
                                                common

+RAMSCO (d)                                     Promissory Note $750,000 at             11/19/02      6.5%      750,000    750,000
Albany, NY. Distributor of water, sanitary      13% due November 18, 2007.
and storm sewer materials to the contractor,    Warrant to purchase common shares.
highway and municipal construction markets.
www.ramsco.com
                                                                                                   less than
SOMERSET GAS TRANSMISSION COMPANY, LLC          Convertible Promissory Note             7/10/02         1%      900,000  1,083,333
Buffalo, NY.  Natural gas transportation        $900,000 at 10%. Due on demand
company.                                        after January 15, 2003
                                                .89 Membership Units

+SYNACOR, INC.                                  Convertible Promissory Note             11/18/02      4.6%      350,000    350,000
Buffalo, NY.  Develops provisioning platforms   $350,000 at 10%. due
for aggregation and delivery of content         November 18, 2007.  Warrant
for broadband access providers.                 149,573 common shares.
www.synacor.com

ULTRA - SCAN CORPORATION                        504,596 Common shares,                  12/11/92        4%      709,353  1,042,247
Amherst, NY.  Biometrics application            142,276  warrants for Common
developer of ultrasonic fingerprint             shares.  $200,000 Promissory
technology.                                     Note at 22%. Due on demand
www.ultra-scan.com                              after May 31, 2003.

                                                                                                   less than
USTEC, INC. (d)                                 $100,000 Promissory Note at             12/17/98        1%      300,500    325,000
Victor, NY.  Markets digital wiring systems     5% due February 1, 2006
for new home construction.                      50,000 Common Shares.
www.ustecnet.com                                139,395 Warrants for Common Shares
                                                + $200,000 Senior Subordinated
                                                  Convertible Debenture at 6% due
                                                  February 2, 2008.

                                                                                                   less than
VANGUARD MODULAR BUILDING SYSTEMS               Preferred Units - 2,673 Units           12/16/99        1%      270,000    270,000
Philadelphia, PA. Leases and sells high-end     with warrants, 14% interest rate.
modular space solutions.
www.vanguardmodular.com

+WINEISIT.COM, CORP.                            Senior Subordinated Promissory          12/18/02        2%      500,000    500,000
Amherst, NY.  Marketing company specializing    Note $500,000 at 10%. due
in customer loyalty programs supporting         December 17, 2009.  Warrant
the wine and spirit industry.                   to purchase 100,000 shares
www.wineisit.com                                common stock.

Other Investments                               Other                                   Various         -       300,821    161,118
                                                                                                                -------    -------

                                                Total portfolio investments                                  $6,575,453 $6,398,077
                                                                                                             ========== ==========
</TABLE>


<PAGE>


NOTES TO SCHEDULE OF PORTFOLIO INVESTMENTS

(a)  The date acquired column indicates the year in which the Corporation
     acquired its first investment in the company or a predecessor company.

(b)  The equity percentages estimate the Corporation's ownership interest in the
     portfolio investment. The estimated ownership is calculated based on the
     percent of outstanding voting securities held by the Corporation or the
     potential percentage of voting securities held by the Corporation upon
     exercise of its warrants or conversion of debentures; or other available
     data. The symbol "less than 1%" indicates that the Corporation holds equity
     interest of less than one percent.

(c)  Under the valuation policy of the Corporation, unrestricted securities are
     valued at the closing price for publicly held securities for the last three
     days of the month. Restricted securities, including securities of
     publicly-owned companies, which are subject to restrictions on resale, are
     valued at fair value as determined by the Board of Directors. Fair value is
     considered to be the amount which the Corporation may reasonably expect to
     receive for portfolio securities if such securities were sold on the
     valuation date. Valuations as of any particular date, however, are not
     necessarily indicative of amounts which may ultimately be realized as a
     result of future sales or other dispositions of securities and these
     favorable or unfavorable differences could be material. Among the factors
     considered by the Board of Directors in determining the fair value of
     restricted securities are the financial condition and operating results,
     projected operations, and other analytical data relating to the investment.
     Also considered are the market prices for unrestricted securities of the
     same class (if applicable) and other matters which may have an impact on
     the value of the portfolio company.

(d)  These investments are income producing. All other investments are
     non-income producing.

(e)  Approximately 99% of the portfolio represents investments in private
     businesses. Therefore the securities are restricted and are subject to one
     or more restrictions on resale and are not freely marketable.

 *  Publicly-owned Company

+ Rand Capital SBIC, L.P. Investment, all other investments are held by the
  Parent, Rand Capital Corporation.

See notes to condensed consolidated financial statements.

<PAGE>




                            RAND CAPITAL CORPORATION
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (UNAUDITED)

1.       BASIS OF PRESENTATION

In Management's opinion, the accompanying condensed consolidated financial
statements include all adjustments necessary for a fair presentation of the
consolidated financial position, results of operations, and cash flows for the
interim periods presented. Certain information and note disclosures normally
included in audited annual financial statements prepared in accordance with
accounting principles generally accepted in the United States of America, have
been omitted; however, the Corporation believes that the disclosures made are
adequate to make the information presented not misleading. The interim results
for the three months ended March 31, 2003 are not necessarily indicative of the
results for the full year.

  These statements should be read in conjunction with the financial statements
  and the notes included in the Corporation's Annual Report on Form 10-K for the
  year ended December 31, 2002. Information contained in this filing should also
  be reviewed in conjunction with Rand Capital Corporation's related filings
  with the Securities and Exchange Commission ("SEC") during the period of time
  covered by this filing. These filings include, but are not limited to the
  following:

         N-30-B2/ARS    Quarterly & Annual Reports to Shareholders
         N-54A          Election to Adopt Business Development Company status
         DEF-14A        Definitive Proxy Statement submitted to shareholders
         Form 10-K      Annual Report on Form 10-K for the year ended
                        December 31, 2002
         Form 10-Q      Quarterly Report on Form 10-Q for the quarters ended
                        March 31, 2002, June 30, 2002, and September 30, 2002
         Form N-23C-1   Reports by closed-end investment companies of purchase
                        of their own securities

2.       THE ENTITY AND A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION - The condensed consolidated financial statements include
the accounts of Rand Capital Corporation ("Rand"), and Rand Capital SBIC, L.P.
("Rand SBIC") and Rand Management LLC (Rand Management) (collectively, the
"Corporation"). All significant intercompany balances and transactions have been
eliminated in consolidation. Prior to the formation of Rand SBIC and Rand
Management, Rand Capital Corporation was a stand-alone entity.

NATURE OF THE BUSINESS - Effective August 16, 2001, Rand made an election,
following a vote of the shareholders authorizing Rand to become a Business
Development Company, or "BDC." Generally, a BDC is a specialized type of
investment company that is primarily engaged in the business of furnishing
capital and managerial expertise to companies that do not have ready access to
capital through conventional finance channels. There was no impact on the
corporate structure as a result of the change to a BDC. Prior to this election,
Rand operated as a diversified closed-end management investment company
registered under the Investment Company Act of 1940. Rand continues to operate
as a publicly held venture capital company, listed on the NASDAQ Small Cap
Market under the symbol "RAND." Rand was founded in 1969 and is headquartered in
Buffalo, New York. Its investment strategy is to seek capital appreciation
through venture capital investments in small, unseasoned, developing companies,
primarily in Upstate New York.



<PAGE>

During the first quarter of 2002, Rand formed a wholly-owned subsidiary, Rand
SBIC for the purpose of operating it as a small business investment company. On
January 25, 2002, Rand transferred $5 million in cash to this subsidiary to
serve as "regulatory capital." On August 16, 2002, Rand received notification
that its Small Business Investment Company (SBIC) application had been approved
and licensed by the Small Business Administration (SBA). The approval will allow
Rand SBIC to obtain loans up to two times its initial $5,000,000 of "regulatory
capital" from the SBA for purposes of making new investment's in portfolio
companies.

INVESTMENTS - Investments are stated at fair value as determined in good faith
by the Corporation's management and both reviewed and approved on a quarterly
basis by the Board of Directors. In accordance with its valuation policy, the
Board of Directors has determined certain investment valuations in the absence
of readily ascertainable fair values. The estimated valuations are not
necessarily indicative of amounts which may ultimately be realized as a result
of future sales or other dispositions of securities, and these favorable or
unfavorable differences could be material. Amounts reported as realized gains
and losses are measured by the difference between the proceeds of sale or
exchange and the cost basis of the investment without regard to unrealized gains
or losses reported in prior periods. The cost of securities that have, in the
Board of Directors' judgment, become worthless, are written off and reported as
realized losses.

In April 2002, Rand SBIC adopted a model valuation policy as established by the
SBA. At the same time the Board of Directors of Rand also adopted a new
valuation policy that mirrored the Rand SBIC policy and is not materially
different from the prior Rand valuation policy.

CASH AND CASH EQUIVALENTS - Temporary cash investments having a maturity of
three months or less when purchased are considered to be cash equivalents.

INTEREST INCOME - Interest income generally is recorded on the accrual basis
except where the investment is valued at less than cost to reflect risk of loss.
In such cases, interest is recorded at the time of receipt. A reserve for
possible losses on interest receivable is maintained when appropriate.

NET ASSETS PER SHARE - Net assets per share are based on the number of shares of
common stock outstanding.

USE OF ESTIMATES - The preparation of the financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.


<PAGE>


INCOME TAXES - The Corporation has not elected pass-through tax treatment as a
regulated investment company under Subchapter M of the Internal Revenue Code for
Income tax purposes. Therefore, the Corporation is taxed as a corporation under
regulation C.

The tax effect of the major temporary difference and carry-forwards that give
rise to the Corporation's net deferred tax assets as of March 31, 2003 and
December 31, 2002 are as follows:

                                          March 31, 2003   December 31, 2002
                                          --------------   -----------------

      Operations                            $ (65,316)        $ (79,194)
      Investments                              73,611
                                                                 61,945
      Net operating loss carry-forwards       153,705                 -
      Capital loss carryforwards                    -           129,249
                                            ---------         ---------
      Deferred tax assets, net              $ 162,000         $ 112,000
                                            =========         =========

As of March 31, 2003, the Corporation had a federal net operating loss
carryforward of approximately $455,000 which expires commencing in 2019.

The deferred tax asset at March 31, 2003 was $162,000 and represented a $50,000
increase in this account from December 31, 2002

The Corporation's tax preparer has prepared and filed its Federal and New York
State tax returns for the Year ended December 31, 2002.

The Corporation is also required to file multi-state tax and information returns
due to the operations of one its portfolio holdings, Vanguard Modular Building
Systems (Vanguard) which is a limited liability corporation (LLC). Rand has
requested filing extensions for the 2002 year and has paid the required state
filing fees, totaling less than $2,700. The Vanguard related multi-state filings
for 2001 and 2000 have not yet been filed by the Corporation's tax preparer,
pending further research into Vanguard operational structure, and are expected
to be completed within six months.

STOCKHOLDERS EQUITY (NET ASSETS)

At March 31, 2003 and December 31, 2002, there were 500,000 shares of $10.00 par
value preferred stock authorized and unissued.

On October 18, 2001, the Board of Directors authorized the repurchase of up to
5% of Rand's outstanding stock through purchases on the open market during the
one-year period ending October 18, 2002. This buy-back was extended through
October 16, 2003 by the Board of Directors. During the three months ended March
31, 2003, 12,600 shares were repurchased for the treasury. During the period
April 1, 2003 through May 5, 2003, 3,000 shares were repurchased on the open
market.

STOCK OPTION PLANS

In July 2001, the shareholders of the Corporation authorized the establishment
of two stock option plans - the Employee Plan and the Non-Employee Director
Plan. The Plans provide for an aggregate of 200,000 and 100,000 shares,
respectively, to be awarded to eligible employees and non-officer directors. The
Employee Plan became effective in 2001, and the Director Plan will not take
effect, if at all, until a SEC exemption is obtained from restrictions under the
Investment Company Act of 1940. In 2002 the Corporation elected to place both
the Employee plan and the Non-Employee Director Plan on inactive status as it
developed a new profit sharing plan for the Corporation's employees in
conjunction with the establishment of its SBIC subsidiary. As of March 31, 2003,
no stock options have been awarded from either plan.


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

         You should read the following discussion and analysis of our financial
condition and results of operations in conjunction with our financial statements
and related notes included elsewhere in this report.

FORWARD LOOKING STATEMENTS

         Statements included in this Management's Discussion and Analysis of
Financial Condition and Results of Operations and elsewhere in this document
that do not relate to present or historical conditions are "forward-looking
statements" within the meaning of that term in Section 27A of the Securities Act
of 1933, and in Section 21F of the Securities Exchange Act of 1934. Additional
oral or written forward-looking statements may be made by the Corporation from
time to time, and those statements may be included in documents that are filed
with the Securities and Exchange Commission. Such forward-looking statements
involve risks and uncertainties that could cause results or outcomes to differ
materially from those expressed in the forward-looking statements.
Forward-looking statements may include, without limitation, statements relating
to the Corporation's plans, strategies, objectives, expectations and intentions
and are intended to be made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Words such as "believes,"
"forecasts," "intends," "possible," "expects," "estimates," "anticipates," or
"plans" and similar expressions are intended to identify forward-looking
statements. Among the important factors on which such statements are based are
assumptions concerning the state of the national economy and the local markets
in which the Corporation's portfolio companies operate, the state of the
securities markets in which the securities of the Corporation's portfolio
company trade or could be traded, liquidity within the national financial
markets, and inflation. Forward-looking statements are also subject to the risks
and uncertainties described under the caption "Risk Factors and Other
considerations" below.

OVERVIEW

         Rand Capital Corporation ("Rand") was incorporated under the law of New
York on February 24, 1969. Commencing in 1971, Rand operated as a publicly
traded, closed-end, diversified management company that was registered under
Section 8(b) of the Investment Company Act of 1940 (the "1940 Act"). On August
16, 2001, Rand filed an election to be treated as a business development company
("BDC") under the 1940 Act, which became effective on the date of filing. On
January 16, 2002, Rand formed a wholly-owned subsidiary, Rand Capital SBIC,
L.P., (Rand SBIC) for the purpose of operating it as a small business investment
company. At the same time, Rand organized another wholly owned subsidiary, Rand
Capital Management, LLC ("Rand Management"), as a Delaware limited liability
company, to act as the general partner of Rand SBIC. Rand transferred $5 million
in cash to Rand SBIC to serve as "regulatory capital" in January 2002 and on
August 16, 2002, Rand received notification that its Small Business Investment
Company (SBIC) application had been approved and licensed by the Small Business
Administration (SBA). The following discussion will include Rand, Rand SBIC and
Rand Management (collectively, the "Corporation").


FORMATION OF SBIC SUBSIDIARY

         On January 16, 2002, Rand formed two wholly-owned subsidiaries, Rand
SBIC and Rand Management. On August 16, 2002, Rand received notification that
its Small Business Investment Company (SBIC) application had been approved and
licensed by the Small Business Administration (SBA). The approval allows Rand
SBIC to obtain loans up to two times its initial $5 million of "regulatory
capital" from the SBA for purposes of making new investment's in

<PAGE>

portfolio companies. As of March 31, 2003 Rand Capital SBIC, LLC had not drawn
any leverage from the SBA.

         Rand formed Rand SBIC as a subsidiary for the purpose of causing it to
be licensed as a small business investment company ("SBIC") under the Small
Business Investment Act of 1958 (the "SBA Act") by the Small Business
Administration (the "SBA"), in order to have access to various forms of leverage
provided by the SBA to SBIC's. On May 28, 2002, the Corporation filed an
Exemption Application with the SEC seeking an order under Sections 6(c),
12(d)(1)(J), 57(c), and 57(i) of, and Rule 17d-1 under, the 1940 Act for
exemptions from the application of Sections 2(a)(3), 2(a)(19), 12(d)(1), 18(a),
21(b), 57(a)(1), (2), (3), and (4), and 61(a) of the 1940 Act to certain aspects
of its operations. The application also seeks an order under Section 12(h) of
the Securities Exchange Act of 1934 Act (the "Exchange Act") for an exemption
from separate reporting requirements under Section 13(a) of the Exchange Act. In
general, the Corporation applications seek orders that would permit:

         -        A BDC (Rand) to operate a BDC/small business investment
                  company (Rand SBIC) as its wholly owned subsidiary in limited
                  partnership form;

         -        Rand, Rand Management and Rand SBIC to engage in certain
                  transactions that the Corporation would otherwise be permitted
                  to engage in as a BDC if its component parts were organized as
                  a single corporation;

         -        Rand, as a BDC, and Rand SBIC, as its BDC/SBIC subsidiary, to
                  meet asset coverage requirements for senior securities on a
                  consolidated basis and;

         -        Rand SBIC, as a BDC/SBIC subsidiary of Rand as a BDC, to file
                  Exchange Act reports on a consolidated basis as part of Rand's
                  reports.

The Corporation has not identified from among the similar exemption applications
on file with the SEC an example of a specific grouping of all of the exemptions
requested by the Corporation in its application, but the SEC has commonly
granted applications to other companies for orders applicable to each of the
exemptions requested and for orders applicable to various combinations of those
exemptions, and the Corporation's applications do not appear to raise any
specific policy issues that have not also been raised by applications for which
exemptions have been granted.

         Rand operates Rand SBIC through Rand Management for the same investment
purposes, and with investments in similar kinds of securities, as Rand. Rand
SBIC's operations are consolidated with those of Rand for both financial
reporting and tax purposes.



<PAGE>


FINANCIAL CONDITION

         The Corporation's total assets decreased by ($108,838) or (1%) to
$9,576,835 and its net assets decreased by ($101,660) or (1%) to $9,502,974 at
March 31, 2003, versus $9,685,673 and $9,604,634 at December 31, 2002,
respectively. The decrease in net assets can be attributed to operating losses
and the repurchase of treasury shares during the three months ended March 31,
2003.

         The Corporation's financial condition is dependent on the success of
its holdings. The Corporation has invested a substantial portion of its assets
in early stage or start-up companies. These private businesses tend to be thinly
capitalized small companies that may lack experienced management. The following
summarizes the Corporation's investment portfolio at the periods indicated.


<TABLE>
<CAPTION>
                                                  MARCH 31, 2003     DECEMBER 31, 2002
--------------------------------------------------------------------------------------
<S>                                                <C>                 <C>
Investments at cost                                $ 6,575,453         $ 6,225,453
Unrealized (depreciation) appreciation, net           (177,376)           (149,266)
                                                   -----------         -----------
Investments at fair value                          $ 6,398,077         $ 6,076,187
                                                   ===========         ===========
</TABLE>

         The increase in investments is due to the effect of Rand SBIC's first
quarter investments in UStec, Inc. (UStec) of $200,000 and an additional
investment in Rexford Albany Municipal Supply Company Inc. (RAMSCO) of $150,000.
The Corporation's total investment in Ramsco is now $750,000.

         The decrease in unrealized (depreciation) of the investments is
primarily attributable to the devaluation of the UStec common shares. The
Corporation made an its original investment in UStec in December 1998 and
subsequently exercised warrants for 50,000 common shares, (valued by the
Corporation at $50,000). During the first quarter of 2003 UStec received a new
round of financing from an unrelated SBIC lead investor. Accordingly, Rand has
reduced the valuation of its common shares to $25,000 as per the Corporation's
valuation policy.

         The Corporation's total investments at fair value approximated 67% of
net assets at March 31, 2003 and 63% of net assets at December 31, 2002.

RESULTS OF OPERATIONS

INVESTMENT INCOME AND EXPENSES

         The Corporation's primary investment objective is to achieve long-term
capital appreciation on its portfolio investments. Therefore, a considerable
portion of the investment portfolio is structured to realize capital
appreciation over the long-term and not necessarily generate income in the form
of dividends or interest. The Corporation does earn interest income from
investing its idle funds in money market instruments.

         Total investment income for the three months ended March 31, 2003 and
2002 was $112,013 and $66,676 respectively, of which $101,909 (91%) and $30,456
(46%) consisted of interest from portfolio companies during the quarter. This
income includes investments that have interest accruals and often do not pay a
current yield. The portfolio interest income includes approximately $30,000 in
interest from the Somerset Gas Transmission Company, LLC (Somerset). The note
was due on January 15, 2003. The Corporation is working closely with Somerset as
it continues its fundraising efforts and the debenture is yielding a current
interest rate of 14%. The Corporation holds a senior interest in the assets of
Somerset.

         The remaining investment income is comprised of interest on idle cash
balances and other temporary short-term investments. The interest income for the
three months ending March

<PAGE>

31, 2003 was $7,845 versus $30,680 for the same period in 2002. This interest
income is lower for the three months ended March 31, 2003 due to a lower idle
cash balances.

         Operating expenses for the three months ended March 31, 2003 and 2002
were $217,923 and $287,838, respectively. The operating expenses predominately
consist of employee compensation and benefits, shareholder related costs, office
expenses, expenses related to identifying and reviewing investment opportunities
and professional fees. The operating expenses for the three month period ending
March 31, 2002 included $67,594 of organizational costs (consulting and advisory
fees) incurred for preparing an application for the Small Business
Administration (SBA) for participation in the SBIC program.

         Net investment (losses) from operations for the three month period
ended March 31, 2003 and 2002 were ($71,570) and ($528,735), respectively. The
investment income in the first quarter 2003 is higher due the portfolio interest
income associated with the Somerset transaction. The net investment loss for the
three months ended March 31, 2003 was lower than the same period in 2002 due to:
organizational cost of $67,594 in 2002, Income tax provision of $3,994 in 2003
versus $53,197 in 2002, and a deferred income tax (benefit) of ($38,334) in 2003
versus an expense of $254,376 for the three months ended March 31, 2002.

NET REALIZED GAINS AND LOSSES ON INVESTMENTS:

         During the three months ended March 31, 2003 the Corporation did not
have any realized gains or losses. During the three months ended March 31, 2002
the Corporation realized net gains of $947,889 on the sale of 61,051 shares of
its ADIC holdings.

NET (DECREASE) INCREASE IN NET ASSETS FROM OPERATIONS:

         The Corporation accounts for its operations under accounting principles
generally accepted in the United States of America for investment companies. The
principal measure of its financial performance is "net (decrease) increase in
net assets from operations" on its consolidated statements of operations. For
the three month period ending March 31, 2003, the net (decrease) in net assets
from operations was ($88,014) as compared to a net increase in net assets from
operations of $47,360 for the same period in 2002. The decrease in net assets
from operations was primarily attributable to the net investment loss of
($71,570) and the unrealized depreciation on investments of ($28,110). The
largest components of the unrealized depreciation were the following: UStec
($25,000) and American Tactile ($5,000). The net increase in net assets from
operations for the period ended March 31, 2002 was due primarily to the $938,399
net gain from the sale of 61,051 shares of Advanced Digital Information
Corporation ("ADIC") stock in January 2002 with a cost basis of $148,331.

LIQUIDITY AND CAPITAL RESOURCES

         The Corporation's principal objective is to achieve capital
appreciation. Therefore, a significant portion of the investment portfolio is
structured to maximize the potential for capital appreciation and certain
portfolio investments may be structured to provide little or no current yield in
the form of dividends or interest payments. The Corporation does earn interest
income on idle cash balances. It has historically relied on and continues to
rely to a large extent upon proceeds from sales of investments rather than
investment income to defray a significant portion of its operating expenses.
Because such sales cannot be predicted with certainty, the Corporation attempts
to maintain adequate working capital necessary for short-term needs.

         At March 31, 2003, 26% of the Corporation's net assets are held in cash
and cash equivalents, which compares to 32% at December 31, 2002.

<PAGE>

         As of March 31, 2003 and December 31, 2002, the Corporation's total
liquidity, consisting of cash and cash equivalents, was $2,501,419 and
$3,092,189, respectively. Included in the March 31, 2003 cash balance was
$1,987,645 of Rand SBIC, L.P. cash. Management believes that these cash and cash
equivalents will provide the Corporation with the liquidity necessary to fund
operations over the next twelve (12) months; however, an increase in the size or
quantity of new investment opportunities during this time may require the
corporation to draw down leverage from the SBA in order to fund such
investments.

RISK FACTORS AND OTHER CONSIDERATIONS

INVESTING IN THE CORPORATION'S STOCK IS HIGHLY SPECULATIVE AND AN INVESTOR COULD
LOSE SOME OR ALL OF THE AMOUNT INVESTED

         The value of the Corporation's common stock may decline and may be
affected by numerous market conditions, which could result in the loss of some
or the entire amount invested in the Corporation's shares. The securities
markets frequently experience extreme price and volume fluctuations, which
affect market prices for securities of companies generally, and technology and
very small capitalization companies in particular. General economic conditions,
and general conditions in the Internet and information technology, life
sciences, material sciences and other high technology industries, will also
affect the Corporation's stock price.

INVESTING IN THE CORPORATION'S SHARES MAY BE INAPPROPRIATE FOR THE INVESTOR'S
RISK TOLERANCE

         The Corporation's investments, in accordance with its investment
objective and principal strategies, result in a far above average amount of risk
and volatility and may well result in loss of principal. The Corporation's
investments in portfolio companies are highly speculative and aggressive and,
therefore, an investment in its shares may not be suitable for investors for
whom such risk is inappropriate.

COMPETITION

         The Corporation faces competition in its investing activities from
private venture capital funds, investment affiliates of large industrial,
technology, service and financial companies, small business investment
companies, wealthy individuals and foreign investors. As a regulated Business
Development Company ("BDC"), the Corporation is required to disclose quarterly
the name and business description of portfolio companies and value of any
portfolio securities. Most competitors are not subject to this disclosure
requirement and the Corporation's obligation to disclose this information could
hinder its ability to invest in certain portfolio companies. Additionally, other
regulations, current and future, may make the Corporation less attractive as a
potential investor to a given portfolio company than a private venture capital
fund.

RAND IS SUBJECT TO RISKS CREATED BY ITS REGULATED ENVIRONMENT

         The Corporation is subject to regulation as BDC's, and Rand SBIC is
also subject to regulation as an SBIC. The loans and other investments that the
Corporation makes, or is expected to make, in small business concerns are
extremely speculative. Substantially all of these concerns are and will be
privately held. Even if a public market for their securities later develops, the
debt obligations and other securities purchased by the Corporation are likely to
be restricted from sale or other transfer for significant periods of time. These
securities will be very illiquid.

         The Corporation's capital may include large amounts of debt securities
issued to the SBA, and all of the debentures issued to the SBA will have fixed
interest rates. Until and unless Rand SBIC is able to invest substantially all
of the proceeds from debentures that it sells to the SBA at annualized interest
or other rates of return that substantially exceed annualized interest

<PAGE>

rates that Rand SBIC must pay the SBA under debentures sold to it, the
Corporation's operating results will be adversely affected which may, in turn,
depress the market price of its common stock.

RAND IS DEPENDENT UPON KEY MANAGEMENT PERSONNEL FOR FUTURE SUCCESS

         The Corporation is dependent for the selection, structuring, closing
and monitoring of its investments on the diligence and skill of its two senior
officers, Allen F. Grum and Daniel P. Penberthy. The future success of the
Corporation depends to a significant extent on the continued service and
coordination of its senior management team. The departure of either of its
executive officers could materially adversely affect the Corporation's ability
to implement its business strategy. The Corporation does not maintain key man
life insurance on any of its officers or employees.

INVESTMENT IN SMALL, PRIVATE COMPANIES

         There are significant risks inherent in the venture capital business.
The Corporation typically invests a substantial portion of its assets in early
stage or start-up companies. These private businesses tend to be thinly
capitalized, small companies with risky technologies that lack management depth
and have not attained profitability or may have no history of operations.
Because of the speculative nature and the lack of a public market for these
investments, there is significantly greater risk of loss than is the case with
traditional investment securities. The Corporation expects that some of its
venture capital investments will be a complete loss or will be unprofitable and
that some will appear to be likely to become successful but never realize their
potential. The Corporation has been risk seeking rather than risk averse in its
approach to venture capital and other investments. Neither the Corporation's
investments nor an investment in the Corporation is intended to constitute a
balanced investment program. The Corporation has in the past relied, and
continues to rely to a large extent, upon proceeds from sales of investments
rather than investment income to defray a significant portion of its operating
expenses. Such sales are unpredictable and may not occur.

ILLIQUIDITY OF PORTFOLIO INVESTMENTS

         Most of the investments of the Corporation's are or will be either
equity securities acquired directly from small companies or below investment
grade subordinated debt securities. The Corporation's portfolio of equity
securities is and will usually be subject to restrictions on resale or otherwise
have no established trading market. The illiquidity of most of the Corporation's
portfolio may adversely affect the ability of the Corporation to dispose of such
securities at times when it may be advantageous to liquidate such investments.

         Even if the Corporation's portfolio companies are able to develop
commercially viable products, the market for new products and services is highly
competitive and rapidly changing. Commercial success is difficult to predict and
the marketing efforts of the portfolio companies may not be successful.

VALUATION OF PORTFOLIO INVESTMENTS

         There is typically no public market for equity securities of the small
privately held companies in which the Corporation invests. As a result, the
valuation of the equity securities in the portfolio are stated at fair value as
determined by the good faith estimate of the Board of Directors in accordance
with the Corporation's established valuation policies. In the absence of a
readily ascertainable market value, the estimated value of the portfolio of
securities may differ significantly, favorably or unfavorably, from the values
that would be placed on the portfolio if a ready market for the equity
securities existed. Any changes in estimated net asset value are recorded in the
statement of operations as "Change in unrealized appreciation on investments."

<PAGE>

FLUCTUATIONS OF QUARTERLY RESULTS

         The Corporation's quarterly operating results could fluctuate as a
result of a number of factors. These factors include, among others, variations
in and the timing of the recognition of realized and unrealized gains or losses,
the degree to which portfolio companies encounter competition in their markets
and general economic conditions. As a result of these factors, results for any
one-quarter should not be relied upon as being indicative of performance in
future quarters.


ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Corporation's investment activities contain elements of risk. The
portion of the investment portfolio consisting of equity and equity-linked debt
securities in private companies is subject to valuation risk. Because there is
typically no public market for the equity and equity-linked debt securities in
which the Corporation invests, the valuation of the equity interests in the
portfolio is stated at "fair value" as determined in good faith by the Board of
Directors in accordance with the Corporation's investment valuation policy. In
the absence of a readily ascertainable market value, the estimated value of the
Corporation's portfolio may differ significantly from the values that would be
placed on the portfolio if a ready market for the investments existed. Any
changes in valuation are recorded in the Corporation's statement of operations
as "Unrealized appreciation (depreciation) on investments."

         At times a portion of the Corporation's portfolio may include
marketable securities traded in the over-the-counter market. In addition, there
may be a portion of the Corporation's portfolio for which no regular trading
market exists. In order to realize the full value of a security, the market must
trade in an orderly fashion or a willing purchaser must be available when a sale
is to be made. Should an economic or other event occur that would not allow the
markets to trade in an orderly fashion, the Corporation may not be able to
realize the fair value of its marketable investments or other investments in a
timely manner.

         As of March 31, 2003, the Corporation did not have any off-balance
sheet investments or hedging investments.

ITEM 4.    EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. The Corporation's chief
executive officer and chief financial officer, after evaluating the
effectiveness of the Corporation's "disclosure controls and procedures" (as
defined in rule 13a-14(c) under the Securities Exchange Act of 1934) as of a
date (the "Evaluation Date") within 90 days before the filing date of this
quarterly report, concluded that as of the Evaluation Date the Corporation's
disclosure controls and procedures were effective to ensure that material
information relating to the Corporation was being made known to them by others
within the Corporation, particularly including during the period when this
quarterly report was being prepared.

(b) Changes in internal controls. There were no significant changes in the
Corporation's internal controls or, to the knowledge of the Corporation's chief
executive officer and chief financial officer, in other factors that could
significantly affect the Corporation's disclosure controls and procedures
subsequent to the Evaluation Date.



<PAGE>



                                    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

           The Company's chief executive officer and chief financial officer
           have furnished to the SEC the certification with respect to this Form
           10-Q that is required by Section 906 of the Sarbanes-Oxley Act of
           2002.



<PAGE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
                (a)    EXHIBITS
                       The following exhibits are filed with this report or
                       are incorporated herein by reference to a prior
                       filing, in accordance with Rule 12b-32 under the
                       Securities Exchange Act of 1934.
                       (2)       N/A
                       (3)(i)    Certificate of Incorporation of the
                                 Corporation, incorporated by reference to
                                 Exhibit (a)(1) of Form N-2 filed with the
                                 Securities Exchange Commission on April 22,
                                 1997.
                       (3)(ii)   By-laws of the Corporation incorporated by
                                 reference to Exhibit (b) of Form N-2 filed
                                 with the Securities Exchange Commission on
                                 April 22, 1997.
                       (4)       Specimen certificate of common stock
                                 certificate, incorporated by reference to
                                 Exhibit (b) of Form N-2 filed with the
                                 Securities Exchange Commission on April 22,
                                 1997.
                       (10.1)    Employee Stock Option Plan - incorporated by
                                 reference to Appendix B to the Corporation's
                                 definitive Proxy Statement filed on June 1,
                                 2002.*
                       (10.2)    Director Stock Option Plan - incorporated by
                                 reference to Appendix C to the Corporation's
                                 definitive Proxy Statement filed on June 1,
                                 2002.*
                        10.3)    Agreement of Limited Partnership for Rand
                                 Capital SBIC, L.P. - incorporated by
                                 reference to Exhibit 10.3 to the
                                 Corporation's Form 10-K filed for the year
                                 ended December 31, 2001.
                       (10.4)    Certificate of Limited Partnership of Rand
                                 Capital SBIC, L.P. - incorporated by
                                 reference to Exhibit 10.4 to the
                                 Corporation's Form 10-K filed for the year
                                 ended December 31, 2001.
                       (10.5)    Limited Liability Corporation Agreement of
                                 Rand Capital Management, LLC - incorporated
                                 by reference to Exhibit 10.5 to the
                                 Corporation's Form 10-K Report filed for the
                                 year ended December 31, 2001.
                       (10.6)    Certificate of Formation of Rand Capital
                                 Management, LLC- incorporated by reference
                                 to Exhibit 10.6 to the Corporation's Form
                                 10-K Report filed for the year ended
                                 December 31, 2001.
                       (10.7)    N/A
                       (10.8)    Profit Sharing Plan - incorporated by
                                 reference to Exhibit 10.8 to the
                                 Corporation's Form 10-K Report filed for the
                                 year ended December 31, 2002.*
                       (15)      N/A
                       (18)      N/A
                       (19)      N/A
                       (20)      N/A
                       (21)      Subsidiaries of the Corporation -
                                 incorporated by reference to Exhibit 21 to
                                 the Corporation's Form 10-K Report filed for
                                 the year ended December 31, 2001.
                       (22)      N/A
                       (23)      N/A
                       (24)      N/A
                       (99.1)    Certification Pursuant to Section 906 of the
                                 Sarbanes-Oxley Act of 2002 - Rand Capital
                                 Corporation - filed herewith
                       (99.2)   Certification Pursuant to Section 906 of the
                                Sarbanes-Oxley Act of 2002 - Rand Capital
                                SBIC, L.P. - filed herewith
                        *Management contract or compensatory plan.
                (b)     REPORTS ON FORM 8-K
                        No Form 8-K reports were filed during the quarter
                        ended March 31, 2003.


<PAGE>




                                   SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT
OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT ON FORM 10-Q TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.

Dated: May 14, 2003
                                       RAND CAPITAL CORPORATION



                                         By: /s/ Allen F. Grum
                                            ---------------------------------
                                            Allen F. Grum, President



                                         By: /s/ Daniel P. Penberthy
                                            ---------------------------------
                                            Daniel P. Penberthy, Treasurer

                                       RAND CAPITAL SBIC, L.P.

                                       By:  RAND CAPITAL MANAGEMENT LLC
                                                General Partner
                                       By:  RAND CAPITAL CORPORATION
                                                Member


                                         By: /s/ Allen F. Grum
                                            ---------------------------------
                                            Allen F. Grum, President




                                         By: /s/ Daniel P. Penberthy
                                            ---------------------------------
                                            Daniel P. Penberthy, Treasurer


<PAGE>

      I, Allen F. Grum, certify that:

      1. I have reviewed this quarterly report on Form 10-Q of Rand Capital
Corporation and Rand Capital SBIC, L.P.;

      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 officer and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

      a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant including its consolidating
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 officer 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.

      6. The registrant's other certifying officer 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.

    Dated: May 14, 2003

                                            /s/ Allen F. Grum
                                ---------------------------------------------
                                          Allen F. Grum, President
                                  (Chief Executive Officer of Rand Capital
                                    Corporation and equivalent of Chief
                                Executive Officer of Rand Capital SBIC, L.P.)



<PAGE>

      I, Daniel P. Penberthy, certify that:

      1. I have reviewed this quarterly report on Form 10-Q of Rand Capital
Corporation and Rand Capital SBIC, L.P.;

      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 officer and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

      a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant including its consolidating
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 officer 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.

      6. The registrant's other certifying officer 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.

         Dated: May 14, 2003

                                            /s/ Daniel P. Penberthy
                                 ---------------------------------------------
                                       Daniel P. Penberthy, Treasurer
                                  (Chief Financial Officer of Rand Capital
                                      Corporation and equivalent of Chief
                                 Financial Officer of Rand Capital SBIC, L.P.)