FIRST. TRANSFORMATIVE. PROVEN.

TRANSFORMING THE FUTURE
NASDAQ : TINY

1	
  
SAFE HARBOR STATEMENT

This presentation may contain statements of a forward-looking nature relating to
future events. Sta...
CORPORATE HIGHLIGHTS
History


-  1983: Completed IPO

-  1992: Became an investment company
-  1995: Became a BDC
-  2002...
HIGHLIGHTS
NAV / Share
$135.3

$150 
$100 
$50 

$24.3

$- 
12/31/01

25
20
15
10
5
0

6/30/13

$5.00 
$4.00 
$3.00 
$2.00...
HARRIS & HARRIS GROUP

Harris & Harris Group 
builds transformative companies
from disruptive science.
	
  

5	
  
HARRIS & HARRIS GROUP HIGHLIGHTS

•  We have significant equity stakes in companies

bringing transformative products to t...
BUSINESS MODEL

Invest

•  NAV	
  Growth	
  
•  Deemed	
  Dividends	
  
and	
  Dividends	
  

Return

•  Early	
  Stage	
 ...
HARRIS & HARRIS GROUP

Our Four-Part Plan


Realize
Invest
Partner
Return

8	
  
HARRIS & HARRIS GROUP

Our Four-Part Plan


Realize
Invest
Partner
Return

9	
  
BIOVEX (ACQ. BY AMGEN)
TINY	
  recognized	
  that	
  BioVex	
  would	
  be	
  the	
  first	
  to	
  commercialize	
  oncoly...
SOLAZYME (IPO IN 2011; NASDAQ:SZYM)
TINY identified impact potential, invested, and grew the company from the earliest sta...
XRADIA (ACQ. BY CARL ZEISS IN 2013)
As 1st institutional investor, TINY helped position Xradia for future growth in new ma...
WE HAVE A PIPELINE THAT
INCLUDES HIGH-QUALITY INVESTMENTS
OVER THE NEXT THREE YEARS WE EXPECT TO REALIZE PROCEEDS FROM
THE...
METABOLON


INITIAL INVESTMENT: Q1 2006

TINY	
  recognized	
  metabolomics	
  as	
  the	
  future	
  of	
  biological	
  ...
D-WAVE SYSTEMS


INITIAL INVESTMENT: Q2 2006

TINY	
  recognized	
  the	
  criNcal	
  importance	
  of	
  increased	
  com...
SIONYX


INITIAL INVESTMENT: Q2 2006

TINY	
  idenNfied	
  the	
  potenNal	
  of	
  the	
  technology	
  &	
  helped	
  fou...
HZO, INC. 
INITIAL INVESTMENT: Q3 2011
TINY	
  idenNfied	
  submersion	
  water	
  protecNon	
  as	
  a	
  criNcal	
  featu...
ADESTO


INITIAL INVESTMENT: Q1 2007

TINY	
  idenNfied	
  major	
  scaling	
  challenges	
  in	
  front	
  of	
  tradiNona...
GROWTH IN AVERAGE OWNERSHIP
Sources of 
Future Returns

Sources of 
Recent Returns
16.00%

14%

14.00%
12.00%
10.00%

9%

...
HARRIS & HARRIS GROUP

Our Four-Part Plan


Realize

Invest
Partner
Return

20	
  
EXPERIENCED EARLY-STAGE INVESTORS

First Institutional Investor or Part of First Institutional Syndicate(1)
•  ABSMaterial...
EVOLUTION OF OUR INVESTMENT FOCUS
Nanotechnology
Opportunity Space

Energy

Electronics

Electronics
Energy

Electronics
B...
OUR EXPERTISE IS INTERDISCIPLINARY
Our	
  interdisciplinary	
  team	
  has	
  the	
  ability	
  	
  
to	
  iden;fy	
  and	...
H&H APPROACH YIELDS A UNIQUE PORTFOLIO

???	
  
Quantum	
  Compu;ng	
  
Imaging	
  and	
  Visualiza;on	
  
Synthe;c	
  Bio...
OUR DISTINCTIVE APPROACH
Interdisciplinary innovation is required to address
these life science challenges. 

BIOLOGY

Ele...
EXAMPLES OF BIOLOGY 

DNA SEQUENCING

SEMICONDUCTORS

PERSONALIZED 
GENOMICS

PROTEIN 
BIOCHEMISTRY

INFORMATION 
TECHNOLO...
A DECADE OF BIOLOGY
BIOLOGY

INVESTMENTS

ENABLES

Engineering

Single Cell Analysis

Physics

Non-Invasive, HighResolutio...
DisrupNve	
  
Science	
  

OUR COMPETITIVE POSITION – 
EARLY STAGE AND DISRUPTIVE SCIENCE

SFE	
  

Internet	
  /	
  	
  
...
Liquid	
  

OUR COMPETITIVE POSITION – 
EARLY STAGE AND LIQUIDITY

GSVC	
  

SVVC	
   KIPO	
  
SFE	
  

KPCB	
  

Illiquid...
HARRIS & HARRIS GROUP

Our Four-Part Plan


Realize
Invest

Partner
Return

30	
  
PARTNERING TO INCREASE RETURNS

Return	
  

Return	
  

Return	
  

Cost	
  

Cost	
  

R&D	
  

Seed	
  Stage	
  

Early-...
EARLY-STAGE EXPERTISE AND CORPORATE EXPERTISE IS 
CRITICAL FOR BRINGING NEW TECHNOLOGY TO MARKET
	
  	
  
EARLY-STAGE
DEVE...
PARTNERING EARLY IS BENEFICIAL

Corporate	
  Partner(s)	
  
Scale	
  &	
  
Manufacturing	
  
Technology	
  	
  
Plaeorms	
...
OUR PARTNERING STRATEGY
Our two paths to working with corporations.
Corporate	
  Partner(s)	
  

• 
• 
• 
• 
• 

Investmen...
CURRENT EXAMPLE OF OUR PARTNERING STRATEGY
Three Large Corporate Partners

Investment in Initial Round of Funding
+
Develo...
HARRIS & HARRIS GROUP

Our Four-Part Plan


Realize
Invest
Partner

Return
36	
  
RETURNING VALUE FOR SHAREHOLDERS
We seek to create value for shareholders by: 
•  Increasing net asset value per share (NA...
HARRIS & HARRIS GROUP

Harris & Harris Group 
builds transformative companies
from disruptive science.
	
  

38	
  
39	
  
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Tiny 102013

  1. 1. FIRST. TRANSFORMATIVE. PROVEN. TRANSFORMING THE FUTURE NASDAQ : TINY 1  
  2. 2. SAFE HARBOR STATEMENT This presentation may contain statements of a forward-looking nature relating to future events. Statements contained in this presentation that are forwardlooking statements are intended to be made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect the Company’s current beliefs, and a number of important factors could cause actual results to differ materially from those expressed herein. Please see the Company’s Annual Report on Form 10-K, as well as subsequent filings, filed with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the Company’s business, including but not limited to the risks and uncertainties associated with venture capital investing and other significant factors that could affect the Company’s actual results. Except as otherwise required by Federal securities laws, Harris & Harris Group, Inc. undertakes no obligation to update or revise these forwardlooking statements to reflect new events or uncertainties. 2  
  3. 3. CORPORATE HIGHLIGHTS History -  1983: Completed IPO -  1992: Became an investment company -  1995: Became a BDC -  2002: Focused on nanotechnology -  Today: Leading investor in transformative companies Financial Highlights2 -  Net Assets: $132.0 million -  Total Liquidity: $49.2 million3 -  Net Asset Value Per Share: $4.24 Stock Highlights1 -  Symbol: NASDAQ:TINY -  Shares Outstanding: 31.2 million -  ADTV: 87,000 shares -  Stock Price: $3.06 -  Market Capitalization: $95.7 million Portfolio Highlights -  Recent liquidity events generated net gains on invested capital. -  26 current portfolio companies, a portion of which could drive near-term growth. -  Robust pipeline of new investment opportunities to drive long-term growth. 1) Data as of September 10, 2013. 2) Data as of June 30, 2013. 3) Total liquidity is amount as of June 30, 2013, plus $12.8 million in cash received in July 2013, from the sale of Xradia to Carl Zeiss. 3  
  4. 4. HIGHLIGHTS NAV / Share $135.3 $150 $100 $50 $24.3 $- 12/31/01 25 20 15 10 5 0 6/30/13 $5.00 $4.00 $3.00 $2.00 $1.00 $- Total Liquidity $4.24 $2.75 Millions Millions Net Assets $36.4 $40 $30 $20 $13.5 $10 $- 12/31/01 6/30/13 TINY Stock Price History 12/31/01 6/30/13
  5. 5. HARRIS & HARRIS GROUP Harris & Harris Group builds transformative companies from disruptive science.   5  
  6. 6. HARRIS & HARRIS GROUP HIGHLIGHTS •  We have significant equity stakes in companies bringing transformative products to the market. •  The value in our portfolio has not yet been realized. •  We have refined our strategy. •  We have a strong interdisciplinary team. •  We have the resources necessary to execute.
  7. 7. BUSINESS MODEL Invest •  NAV  Growth   •  Deemed  Dividends   and  Dividends   Return •  Early  Stage   •  BIOLOGY+   Build Value •  Company  Building   •  Board  Involvement   •  Partnerships   Our evergreen structure facilitates growth and is a competitive advantage.
  8. 8. HARRIS & HARRIS GROUP Our Four-Part Plan Realize Invest Partner Return 8  
  9. 9. HARRIS & HARRIS GROUP Our Four-Part Plan Realize Invest Partner Return 9  
  10. 10. BIOVEX (ACQ. BY AMGEN) TINY  recognized  that  BioVex  would  be  the  first  to  commercialize  oncolyNc  virus  cancer  therapy   •  Initial investment: At first signs of clinical efficacy (Series E) •  Initial Market: Melanoma with plans for other solid tumors •  Initial involvement: Board Observer Acquired by Amgen in 2011 $1  Billion  in  total  payouts   Acquired  at  Start  of  Phase  3  Trials   MARKET: Solid Tumor Cancer Therapy Melanoma Therapeutics: $1.4Billion by 2017 Head & Neck Therapeutics: $1.7Billion by 2016 BioVex engineered oncolytic viruses to preferentially attack tumor cells, leaving healthy cells unharmed * Market size estimates by GlobalData 10  
  11. 11. SOLAZYME (IPO IN 2011; NASDAQ:SZYM) TINY identified impact potential, invested, and grew the company from the earliest stage •  Initial investment: Seed round •  Employees @ initial investment: 2 •  Initial involvement: Board seat Investors / Corporate Partners Since Our Initial Investment Roda  Group   Braemar  Energy  Ventures   Morgan  Stanley   Lightspeed   VantagePoint   Chevron   Unilever   Mitsui   Sephora   Bunge   San-­‐Ei  Gen   MARKET: Tailored Oils Chemicals and Fuels: $1 Trillion* Nutrition: $100 Billion* Skin & Personal Care: $50 Billion* Solazyme harnesses the power of microalgae to transform low-cost sugars into high-value renewable oils. * Market size estimates by Solazyme 11  
  12. 12. XRADIA (ACQ. BY CARL ZEISS IN 2013) As 1st institutional investor, TINY helped position Xradia for future growth in new markets •  Initial investment: Series D; First Institutional round of investment •  Revenue @ initial investment: $7 million •  Initial market focus: Electronics •  Involvement: Board seat •  Recruited new management team and members of board of directors. •  Helped build business strategy for expansion into new growth markets. •  Active involvement in sale process. Proprietary X-Ray Lenses Life Sciences Electronics Harris & Harris Group Contributions Materials Science Natural Resources 3D High Resolution Imaging Tools MARKET: X-Ray Microscopy $1.2B in 2013* Growth driven by Life sciences, materials, oil/gas, mining Xradia’s proprietary technology enables high-resolution, 3D imaging of samples of interest to multiple high-growth industries. 12  
  13. 13. WE HAVE A PIPELINE THAT INCLUDES HIGH-QUALITY INVESTMENTS OVER THE NEXT THREE YEARS WE EXPECT TO REALIZE PROCEEDS FROM THE MAJORITY OF OUR MID STAGE AND LATE STAGE COMPANIES. Energy Early Stage Mid Stage Late Stage Life Sciences ABSMaterials (2010) Contour Energy (2007) Produced Water Absorbents (2011) Ultora (2010) Electronics AgBiome (2012) Ancora (2007) EchoPixel (2013) Enumeral (2009) Senova (2011) Cobalt (2008) Laser Light Engines (2008) Mersana (2002) OpGen (2012) Cambrios (2004) HzO (2011) Kovio (2005) Nantero (2001) SiOnyx (2006) Bridgelux (2005) Nanosys (2003) Champions Oncology (OTC:CSBR; 2011) Ensemble (2007) Metabolon (2006) Adesto (2007) D-Wave Systems (2006) Molecular Imprints (2004) Note: Equity-focused portfolio companies, year of first investment and stage classifications as of June 30, 2013, not including 1) our publicly traded shares of Solazyme, 2) the recently acquired portfolio company Xradia; and 3) our rights to milestone payments from Amgen, Inc. associated with the acquisition of BioVex Group, Inc. and Laird Technologies, Inc. associated with the acquisition of Nextreme Thermal Solutions, Inc. 13  
  14. 14. METABOLON INITIAL INVESTMENT: Q1 2006 TINY  recognized  metabolomics  as  the  future  of  biological  understanding   •  Initial investment: Series B, lead investor O H O •  Current Milestones: 2 Diagnostic tests released Investors / Corporate Partners Aurora Charles River Discovery Services Syngenta Ventures Top 10 Pharma companies Fletcher Spaght DHMRI Sevin Rosen Funds Health Diagnostics Laboratory O H N H 2 O H glucose •  Involvement: Board observer               O H O H O •  Initial market focus: Testing & service O H O H cholesterol L-threonine MARKET: Diagnostics & Drug Discovery Diabetes Diagnostics: $3 Billion & Growing PSA Diagnostics: $12 Billion & Growing $20 Million revenue in services TINY  Impact:  Exit  at  8-­‐12%  ownership   Metabolon is the leader in measuring biological pathways and is positioned to disrupt billion dollar diagnostic markets with its novel solutions. 14
  15. 15. D-WAVE SYSTEMS INITIAL INVESTMENT: Q2 2006 TINY  recognized  the  criNcal  importance  of  increased  compuNng  power  to  the  Internet-­‐age   •  Initial investment: Lead Series B •  Target Market: High Performance Computing •  Business Model: Quantum Cloud Computing •  Initial involvement: Board Member Investors / Corporate Partners Bezos  ExpediNons   In-­‐Q-­‐Tel   Draper  Fisher  Jurvetson   Goldman  Sachs   Google   NASA  Ames   Lockheed  MarNn   MARKET: High Performance Computing High Performance Computing: $44 Billion by 2020 Cloud Computing: $33 Billion by 2016 TINY Impact: Exit at 2.5-5% ownership D-Wave harnesses quantum mechanical phenomena to solve some of the most computationally intensive problems known to humankind * Market size estimates by Gartner and Market Research Media 15  
  16. 16. SIONYX INITIAL INVESTMENT: Q2 2006 TINY  idenNfied  the  potenNal  of  the  technology  &  helped  found  SiOnyx   •  Initial investment: Seed, 1st Institutional Investor •  Initial market focus: Unknown – TINY helped develop the first focus •  Involvement: Board Seat •             SiOnyx  Solu;on:                            Compe;;on:   Current Milestones: 2 Diagnostic tests released Comparable Companies: Image Sensors Cameras & Camera Modules Omnivision (NASDAQ:OVTI) Aptina, Pixim (Private) FLIR Systems (NASDAQ:FLIR), Ambarella (NASDAQ:AMBA), Pelco (Sub. of Scheinder Elec.), Axis (STO:AXIS), Mobotix (ETR:MBQ) Everfocus (TPE:5484)               MARKET: Infrared Cameras $7B in 2013 è $25B in 2017* Growth driven by Security/Surveillance (Night Vision) and Gesture User Interface (ex: Microsoft Kinect™) TINY  Impact:    Exit  at  10-­‐20%    ownership   SiOnyx is bringing disruptive performance and silicon economics to the multi-billion dollar night vision, security & surveillance, and gesture user interface markets * Sources: SiOnyx estimates and IMS Research. 16
  17. 17. HZO, INC. INITIAL INVESTMENT: Q3 2011 TINY  idenNfied  submersion  water  protecNon  as  a  criNcal  feature  in  future  electronic  devices   •  Initial investment: Lead Series A •  Initial Market: Water protection for electronic devices •  Initial involvement: Board Member TINY’s Contribution •  Established  an  experienced  management  team   •  Seeded  company  with  outside  experNse   •  Connected  company  to  strategic  partners  and   customers   MARKET: Electronic Device Market Consumer Electronics: $3.3 Billion Life Sciences: $3.1 Billion Industrial Electronics: $0.7 Billion TINY  Impact:    Exit  at  15-­‐20%    ownership   HzO combines high-volume manufacturing with innovative coating technology to add critical submersion protection to electronic devices * Market size estimates by HzO, Inc. 17  
  18. 18. ADESTO INITIAL INVESTMENT: Q1 2007 TINY  idenNfied  major  scaling  challenges  in  front  of  tradiNonal  NVM  computer  memory     •  Initial investment: Lead Series A •  Target Market: Non-volatile memory •  Initial involvement: Board Member •  Acquisition: Atmel’s flash memory business Investors / Corporate Partners Arch  Ventures   Applied  Ventures   (Applied  Materials)   ATA  Ventures   AlNs  Semiconductor   Microchip   Altera   MARKET: Nonvolatile Memory (NVM) NVM: $80 Billion/year in 2013 TINY Impact: Exit at 8-12% ownership Adesto is addressing the need for ultra low-power, low-cost, high-speed, scalable non-volatile memory (NVM) for stand-alone and embedded applications * Market size estimates by Adesto 18  
  19. 19. GROWTH IN AVERAGE OWNERSHIP Sources of Future Returns Sources of Recent Returns 16.00% 14% 14.00% 12.00% 10.00% 9% 8.00% 6.00% 5% 4.00% 2.00% 0.00% 2001-2004 2005-2008 2009-2013 Notes: Average ownership data includes investment-weighted ownership percentages on a fully diluted basis as of June 30, 2013, for unrealized investments. Many of our current portfolio companies may raise additional capital, and depending on many factors our ownership could increase or decrease in these companies as a result of these financings. The data for 2005-2008 does not include ownership in Ancora Pharmaceuticals Inc. If this investment was included, the investment-weighted average ownership would be 15 percent. 19  
  20. 20. HARRIS & HARRIS GROUP Our Four-Part Plan Realize Invest Partner Return 20  
  21. 21. EXPERIENCED EARLY-STAGE INVESTORS First Institutional Investor or Part of First Institutional Syndicate(1) •  ABSMaterials •  Adesto •  AgBiome •  Ancora •  Bridgelux •  Contour Energy •  Enumeral •  HzO •  Laser Light Eng. •  Mersana •  Nantero •  PWA •  Senova •  SiOnyx •  Ultora Adaptive Web Tech. (Exited Position in 2001) Ag Services of America (Exited Position in 1993) Agile Materials (Exited Position in 2005) Alliance Pharmaceutical (Exited Position in 1990) American Equine Prod. (Exited Position in 1990) Chlorogen (Exited Position in 2008) CMA Group (Exited Position in 1995) CORDEX Petroleums (Exited Position in 1998) Crystal IS (Exited Position in 2011) Cswitch (Exited Position in 2009) Dynecology (Exited Position in 1997) Evolved Nanomater. Sci. (Exited Position in 2008) Experion Systems (Exited Position in 2005) Exponential (Exited Position in 2009) Genomica (Exited Position in 2001) Harber Brothers (Exited Position in 1997) Harris Newco (Exited Position in 2001) Highline Capital (Exited Position in 1997) Informio (Exited Position in 2002) Molten Metal Tech. (Exited Position in 1993) MultiTarget (Exited Position in 1998) NanoGram (Exited Position in 2010) NanoGram Devices (Exited Position in 2005) Nassim & Nicolovius (Exited Position in 1994) NBX (Exited Position in 1999) NeoPhotonics (Exited Position in 2012) NeuroMetrix (Exited Position in 2005) Nextreme (Exited Position in 2013) nFX (Exited Position in 1997) Pharm. Peptides (Exited Position in 1993) Phoenix Molecular (Exited Position in 2008) PHZ Capital Partners (Exited Position in 2003) Princeton Video Image (Exited Position in 1999) Questech (Exited Position in 2011) Re Capital (Exited Position in 1989) SciQuest (Exited Position in 2000) InSite Marketing (Exited Position in 2001) Siluria (Exited Position in 2011) (2) Solazyme (IPO in 2011) Sonex (Exited Position in 1996) Starfire Systems (Exited Position in 2009) Sundial Marketplace (Exited Position in 2001) Voice Control Systems (Exited Position in 1999) Xradia (Exited Position in 2013) Zia Laser (Exited Position in 2008) (1)  Includes initial investments made prior to 2002. The first member of the current investment team joined Harris & Harris Group in 2002. (2)  A portion of our shares of Solazyme remained unrealized as of June 30, 2013. 21  
  22. 22. EVOLUTION OF OUR INVESTMENT FOCUS Nanotechnology Opportunity Space Energy Electronics Electronics Energy Electronics BIOLOGY Life Sciences 2002-2007 Energy BIOLOGY Life Sciences BIOLOGY Life Sciences 2008-2013 Future We are Positioned to take Advantage of Many of the Exciting Trends in Growing Life Science Markets 22  
  23. 23. OUR EXPERTISE IS INTERDISCIPLINARY Our  interdisciplinary  team  has  the  ability     to  iden;fy  and  diligence  cross-­‐discipline  deals.     Physics   Engineering   Materials   Science   Medicine   Biology   Chemistry   5  Ph.D.  level  investment  professionals:     Chemistry,  Physics,  Biochemical  Engineering,  Gene;cs  and  Materials  Science   23  
  24. 24. H&H APPROACH YIELDS A UNIQUE PORTFOLIO ???   Quantum  Compu;ng   Imaging  and  Visualiza;on   Synthe;c  Biology   Cancer  Therapeu;cs   Separa;ons   Solid-­‐State  Sensors   Single  Cell  Analysis   Molecular  Engineering   3D  Biology   Omics   Molecular  Diagnos;cs   Structural  Varia;on   Drug  Delivery   Vaccines   Water   Microbiome   This  yields  a  unique  and  diversified  life  science  porZolio  at  the   intersec;on  of  biology  and  other  disciplines.   24  
  25. 25. OUR DISTINCTIVE APPROACH Interdisciplinary innovation is required to address these life science challenges. BIOLOGY Electronics Physics Materials Science Chemistry IT Engineering LIFE SCIENCE SOLUTIONS Mathematics 25  
  26. 26. EXAMPLES OF BIOLOGY DNA SEQUENCING SEMICONDUCTORS PERSONALIZED GENOMICS PROTEIN BIOCHEMISTRY INFORMATION TECHNOLOGY NOVEL THERAPEUTIC TARGETS ONCOLOGY PHYSICS 3D NON-INVASIVE IMAGING AND DIAGNOSTICS 26  
  27. 27. A DECADE OF BIOLOGY BIOLOGY INVESTMENTS ENABLES Engineering Single Cell Analysis Physics Non-Invasive, HighResolution Imaging Electronics Personal Genomics IT Protein Structure Analysis Mathematics High-Quality Molecular Diagnostics Material Science H&H PORTFOLIO COMPANY Targeted Bio-Compatible Drug Delivery 27  
  28. 28. DisrupNve   Science   OUR COMPETITIVE POSITION – EARLY STAGE AND DISRUPTIVE SCIENCE SFE   Internet  /     Social  Media   KIPO   GSVC   SVVC   Late-­‐Stage   Passive  Involvement   Early-­‐Stage,   AcNve  Involvement   Harris & Harris Group Uniquely Addresses an Underserved Market Amongst Publicly Traded Equity-Focused Investment Companies
  29. 29. Liquid   OUR COMPETITIVE POSITION – EARLY STAGE AND LIQUIDITY GSVC   SVVC   KIPO   SFE   KPCB   Illiquid   Venrock   Polaris   Khosla   ARCH  Ventures   Late-­‐Stage   Passive  Involvement   Early-­‐Stage,   AcNve  Involvement   Harris & Harris Group is a Liquid Vehicle for Early-Stage Investing
  30. 30. HARRIS & HARRIS GROUP Our Four-Part Plan Realize Invest Partner Return 30  
  31. 31. PARTNERING TO INCREASE RETURNS Return   Return   Return   Cost   Cost   R&D   Seed  Stage   Early-­‐Stage   Later-­‐stage   VC   VC   Time   Return   R&D   Seed  Stage   Early-­‐Stage   Later-­‐stage   VC   VC   Time  
  32. 32. EARLY-STAGE EXPERTISE AND CORPORATE EXPERTISE IS CRITICAL FOR BRINGING NEW TECHNOLOGY TO MARKET     EARLY-STAGE DEVELOPMENT Company formation, Management Team Identification, University IP Negotiation, Initial Funding and Performance Metrics SCALE AND MANUFACTURING Manufacturing Scale, Factory Integration, Pilot Facilities, Clinical Trials Value Creation $$ Cumulative Cost REVENUE GROWTH Introduction and Access to the Market and Customers TIME Corporate involvement is critical to providing scale and distribution. Understanding the optimal transition point is quintessential to build capital efficient businesses. 32  
  33. 33. PARTNERING EARLY IS BENEFICIAL Corporate  Partner(s)   Scale  &   Manufacturing   Technology     Plaeorms   Company   Building   Market   Access   Corporate  Partner(s)   Scale  &   Manufacturing   Market   Access   Technology     Plaeorms   Company   Building   Opportunity  Space   We believe the skillsets of Harris & Harris Group and corporate partners are highly complementary. 33  
  34. 34. OUR PARTNERING STRATEGY Our two paths to working with corporations. Corporate  Partner(s)   •  •  •  •  •  Investment Development Programs Commercialization/ Purchase Agreements Licensing Expertise •  •  •  Investment Strategic Insights Management Fees and Carried Interest H&H Portfolio Companies Corporations are an important part of Harris & Harris Group’s current and future strategies. 34  
  35. 35. CURRENT EXAMPLE OF OUR PARTNERING STRATEGY Three Large Corporate Partners Investment in Initial Round of Funding + Development Programs Corporations currently add value to Harris & Harris Group and our portfolio companies in multiple ways. 35  
  36. 36. HARRIS & HARRIS GROUP Our Four-Part Plan Realize Invest Partner Return 36  
  37. 37. RETURNING VALUE FOR SHAREHOLDERS We seek to create value for shareholders by: •  Increasing net asset value per share (NAV) through: -  Gains on our investments -  Reduction of number of shares outstanding •  Distributing a portion of net capital gains on investments to shareholders through: -  Present: deemed dividends -  Future: deemed and actual dividends We believe execution on our four-part plan will generate meaningful returns to shareholders. 37  
  38. 38. HARRIS & HARRIS GROUP Harris & Harris Group builds transformative companies from disruptive science.   38  
  39. 39. 39  

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