Provides a greater than 5.5 times return on invested capital and contributes to Rand’s SBIC achieving a 12-year return of over 20%
Rand Capital Corporation (Nasdaq:RAND), a business development company that makes venture capital investments in companies with emerging product, service or technology concepts, announced that it received $10.1 million in total proceeds from the recent sale of a portfolio company.
The portfolio company represented approximately 9% of Rand’s portfolio at the end of the third quarter. Rand had a 4% equity ownership in the company, in which it initially invested in 2011. Rand’s internal rate of return (IRR) for this asset was over 75%, representing a 5.5 times return on invested capital.
Allen F. Grum, President and Chief Executive Officer of Rand Capital, stated, “This recent sale demonstrates the success we have had with our investments, particularly over the last 12 years. Our success has been the result of Rand SBIC, which we established in 2002. It has enabled us to participate in the Small Business Administration’s (SBA) Small Business Investment Company (SBIC) program as a funding source.
“Over that time, the SBIC portfolio has achieved an approximate return of over 20%. Our focus remains on finding companies with strong management teams that need capital for early market entry or expansion in order to commercialize a new or unique product or service.”
Rand’s $30 million portfolio includes 27 active companies. In addition, Rand has approximately $13 million in cash, or approximately $2 per share, for future investments.
Rand Capital is a publicly held Business Development Company (BDC), and its wholly-owned subsidiary is licensed by the U.S. Small Business Administration (SBA) as a Small Business Investment Company (SBIC). Rand focuses its investments in early or expansion stage companies with strong leadership that are bringing to market new or unique products, technologies or services that have a high potential for growth.