Rand Capital Corp (NASDAQ: RAND)

Rand Capital Corporation is an externally managed closed end non diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. The firm focuses on providing higher yielding debt investments to privately held lower middle market companies across a broad range of industries.

Rand Capital Corporation generates revenue primarily from interest and dividend income on its debt and equity portfolio investments as well as from origination structuring commitment diligence and consulting fees received from portfolio companies. The external investment adviser Rand Capital Management LLC earns base management fees and potential incentive fees based on the fund’s performance which are paid by the corporation.

Within the business development company sector Rand Capital Corporation competes with other BDCs venture capital firms private equity and mezzanine funds. Its competitive advantages stem from the investment team’s extensive referral network long standing reputation in the lower middle market efficient investment analysis and decision making process and the ability to offer flexible investment terms. The firm’s focus on higher yielding debt and its status as a regulated investment company also differentiate it from many peers.

The corporation’s customers are the portfolio companies in which it invests principally privately held lower middle market enterprises seeking growth expansion or ownership transition financing. Specific customer names are not disclosed in the filing so the base is described as a diverse set of operating businesses across various industries with revenues exceeding ten million dollars and EBITDA above one point five million dollars.