Tiny 102013

TRANSFORMING THE FUTURE

NASDAQ : TINY

FIRST. TRANSFORMATIVE. PROVEN.

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This presentation may contain statements of a forward-looking nature relating to future events. Statements contained in this presentation that are forward-looking 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 forward-looking statements to reflect new events or uncertainties.

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SAFE HARBOR STATEMENT

History

-  1983: Completed IPO

-  1992: Became an investment company

-  1995: Became a BDC

-  2002: Focused on nanotechnology

-  Today: Leading investor in transformative companies

Stock Highlights1

-  Symbol: NASDAQ:TINY

-  Shares Outstanding: 31.2 million

-  ADTV: 87,000 shares

-  Stock Price: $3.06

-  Market Capitalization: $95.7 million

Financial Highlights2

-  Net Assets: $132.0 million

-  Total Liquidity: $49.2 million3

-  Net Asset Value Per Share: $4.24

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.

CORPORATE HIGHLIGHTS

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

HIGHLIGHTS

$13.5

$36.4

$-

$10

$20

$30

$40

12/31/01 6/30/13

Mill

ion

s

Total Liquidity

$24.3

$135.3

$-

$50

$100

$150

12/31/01 6/30/13

Mill

ion

s

Net Assets

$2.75

$4.24

$-

$1.00

$2.00

$3.00

$4.00

$5.00

12/31/01 6/30/13

NAV / Share

0

5

10

15

20

25 TINY Stock Price History

HARRIS & HARRIS GROUP

Harris & Harris Group builds transformative companies

from disruptive science.

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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.

Invest

Build Value Return

BUSINESS MODEL

Our evergreen structure facilitates growth and is a competitive advantage.

•  NAV Growth •  Deemed Dividends

and Dividends

•  Company Building •  Board Involvement •  Partnerships

•  Early Stage •  BIOLOGY+


Our Four-Part Plan

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Realize Invest

Partner

Return


Our Four-Part Plan

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Realize Invest

Partner Return

BIOVEX (ACQ. BY AMGEN)

•  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

* Market size estimates by GlobalData

TINY recognized that BioVex would be the first to commercialize oncolyNc virus cancer therapy

BioVex engineered oncolytic viruses to preferentially attack tumor cells, leaving healthy cells unharmed

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Solazyme harnesses the power of microalgae to transform low-cost sugars into high-value renewable oils.

SOLAZYME (IPO IN 2011; NASDAQ:SZYM)

•  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*

* Market size estimates by Solazyme

TINY identified impact potential, invested, and grew the company from the earliest stage

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Xradia’s proprietary technology enables high-resolution, 3D imaging of samples of interest to multiple high-growth industries.

As 1st institutional investor, TINY helped position Xradia for future growth in new markets

XRADIA (ACQ. BY CARL ZEISS IN 2013)

•  Initial investment: Series D; First Institutional round of investment

•  Revenue @ initial investment: $7 million

•  Initial market focus: Electronics

•  Involvement: Board seat

Harris & Harris Group Contributions

•  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.

MARKET: X-Ray Microscopy

$1.2B in 2013*

Growth driven by Life sciences, materials, oil/gas, mining

Proprietary X-Ray Lenses

3D High Resolution Imaging Tools

Materials Science Life Sciences

Electronics Natural Resources

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Energy Life Sciences Electronics

Early Stage

ABSMaterials (2010) Contour Energy (2007)

Produced Water Absorbents (2011) Ultora (2010)

AgBiome (2012) Ancora (2007)

EchoPixel (2013) Enumeral (2009)

Senova (2011)

Mid Stage Cobalt (2008)

Laser Light Engines (2008) Mersana (2002) OpGen (2012)

Cambrios (2004) HzO (2011)

Kovio (2005) Nantero (2001) SiOnyx (2006)

Late Stage Bridgelux (2005) Nanosys (2003)

Champions Oncology (OTC:CSBR; 2011) Ensemble (2007)

Metabolon (2006)

Adesto (2007) D-Wave Systems (2006)

Molecular Imprints (2004)

WE HAVE A PIPELINE THAT INCLUDES HIGH-QUALITY INVESTMENTS

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.

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OVER THE NEXT THREE YEARS WE EXPECT TO REALIZE PROCEEDS FROM THE MAJORITY OF OUR MID STAGE AND LATE STAGE COMPANIES.

METABOLON INITIAL INVESTMENT: Q1 2006

•  Initial investment: Series B, lead investor

•  Initial market focus: Testing & service

•  Involvement: Board observer

•  Current Milestones: 2 Diagnostic tests released

Investors / Corporate Partners

Aurora

Syngenta Ventures

Fletcher Spaght

Sevin Rosen Funds

Charles River Discovery Services

Top 10 Pharma companies

DHMRI

Health Diagnostics Laboratory

TINY recognized metabolomics as the future of biological understanding

Metabolon is the leader in measuring biological pathways and is positioned to disrupt billion dollar diagnostic markets with its novel solutions.

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TINY Impact: Exit at 8-‐12% ownership

L-threonine

N H 2

O H O

O H

glucose

O H

O H

O H

O H

O

O H

cholesterol

MARKET: Diagnostics & Drug Discovery

Diabetes Diagnostics: $3 Billion & Growing

PSA Diagnostics: $12 Billion & Growing

$20 Million revenue in services

D-WAVE SYSTEMS INITIAL INVESTMENT: Q2 2006

•  Initial investment: Lead Series B

•  Target Market: High Performance Computing

•  Business Model: Quantum Cloud Computing

•  Initial involvement: Board Member


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

* Market size estimates by Gartner and Market Research Media

TINY recognized the criNcal importance of increased compuNng power to the Internet-‐age

D-Wave harnesses quantum mechanical phenomena to solve some of the most computationally intensive problems known to humankind

TINY Impact: Exit at 2.5-5% ownership

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•  Initial investment: Seed, 1st Institutional Investor

•  Initial market focus: Unknown – TINY helped develop the first focus

•  Involvement: Board Seat

•  Current Milestones: 2 Diagnostic tests released

SiOnyx Solu;on: Compe;;on:

Comparable Companies:

Image Sensors Omnivision (NASDAQ:OVTI)

Aptina, Pixim (Private)

Cameras & Camera Modules

FLIR Systems (NASDAQ:FLIR), Ambarella (NASDAQ:AMBA), Pelco (Sub. of Scheinder Elec.), Axis (STO:AXIS), Mobotix (ETR:MBQ)

Everfocus (TPE:5484)

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* Sources: SiOnyx estimates and IMS Research.

SIONYX INITIAL INVESTMENT: Q2 2006

TINY idenNfied the potenNal of the technology & helped found SiOnyx

SiOnyx is bringing disruptive performance and silicon economics to the multi-billion dollar night vision, security & surveillance, and gesture user interface markets

MARKET: Infrared Cameras

$7B in 2013 è $25B in 2017*

Growth driven by Security/Surveillance (Night Vision) and

Gesture User Interface (ex: Microsoft Kinect™)

HZO, INC. INITIAL INVESTMENT: Q3 2011

•  Initial investment: Lead Series A

•  Initial Market: Water protection for electronic devices


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

* Market size estimates by HzO, Inc.

TINY idenNfied submersion water protecNon as a criNcal feature in future electronic devices

HzO combines high-volume manufacturing with innovative coating technology to add critical submersion protection to electronic devices


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ADESTO INITIAL INVESTMENT: Q1 2007

•  Initial investment: Lead Series A

•  Target Market: Non-volatile memory


•  Acquisition: Atmel’s flash memory business


Arch Ventures Applied Ventures (Applied Materials)

ATA Ventures

AlNs Semiconductor Microchip Altera

MARKET: Nonvolatile Memory (NVM)

NVM: $80 Billion/year in 2013

* Market size estimates by Adesto

TINY idenNfied major scaling challenges in front of tradiNonal NVM computer memory

Adesto is addressing the need for ultra low-power, low-cost, high-speed, scalable non-volatile memory (NVM) for stand-alone and embedded applications

TINY Impact: Exit at 8-12% ownership

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GROWTH IN AVERAGE OWNERSHIP

5%

9%

14%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

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.

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Sources of Recent Returns

Sources of Future Returns


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Our Four-Part Plan

Realize

Invest Partner Return

(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.

EXPERIENCED EARLY-STAGE INVESTORS

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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) Solazyme (IPO in 2011)(2)

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)

EVOLUTION OF OUR INVESTMENT FOCUS

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BIOLOGY

Electronics

Life Sciences

Energy

Nanotechnology Opportunity Space

BIOLOGY

Electronics

Life Sciences

Energy

BIOLOGY

Electronics

Life Sciences

Energy

2002-2007 2008-2013 Future

We are Positioned to take Advantage of Many of the Exciting Trends in Growing Life Science Markets

Our interdisciplinary team has the ability to iden;fy and diligence cross-‐discipline deals.

OUR EXPERTISE IS INTERDISCIPLINARY

Physics

Biology

Materials Science

Engineering

Medicine

Chemistry

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5 Ph.D. level investment professionals: Chemistry, Physics, Biochemical Engineering, Gene;cs and Materials Science

Single Cell Analysis

Structural Varia;on

Molecular Engineering

Omics

Microbiome

Water

Molecular Diagnos;cs

Synthe;c Biology

Drug Delivery

3D Biology

Cancer Therapeu;cs

???

Separa;ons Solid-‐State Sensors

Quantum Compu;ng

Imaging and Visualiza;on

Vaccines

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This yields a unique and diversified life science porZolio at the intersec;on of biology and other disciplines.

H&H APPROACH YIELDS A UNIQUE PORTFOLIO

OUR DISTINCTIVE APPROACH

Interdisciplinary innovation is required to address these life science challenges.

LIFE SCIENCE SOLUTIONS BIOLOGY

Electronics

Physics

Materials Science

Chemistry

IT

Engineering

Mathematics

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EXAMPLES OF BIOLOGY

SEMICONDUCTORS

PHYSICS

INFORMATION TECHNOLOGY

3D NON-INVASIVE IMAGING AND DIAGNOSTICS

PERSONALIZED GENOMICS

NOVEL THERAPEUTIC TARGETS

DNA SEQUENCING

PROTEIN BIOCHEMISTRY

ONCOLOGY

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BIOLOGY ENABLES H&H PORTFOLIO COMPANY

Engineering Single Cell Analysis

Physics Non-Invasive, High-Resolution Imaging

Electronics Personal Genomics

IT Protein Structure Analysis

Mathematics High-Quality

Molecular Diagnostics

Material Science Targeted

Bio-Compatible Drug Delivery

A DECADE OF BIOLOGY INVESTMENTS

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OUR COMPETITIVE POSITION – EARLY STAGE AND DISRUPTIVE SCIENCE

Disrup

Nve

Science

Early-‐Stage, AcNve Involvement

Late-‐Stage Passive Involvement

Internet /

Social M

edia

GSVC

SFE

Harris & Harris Group Uniquely Addresses an Underserved Market Amongst Publicly Traded Equity-Focused Investment Companies

KIPO

SVVC

Liqu

id

Early-‐Stage, AcNve Involvement

Late-‐Stage Passive Involvement

Illiquid

Harris & Harris Group is a Liquid Vehicle for Early-Stage Investing

OUR COMPETITIVE POSITION – EARLY STAGE AND LIQUIDITY

GSVC

SFE

KIPO SVVC

Venrock

Polaris

Khosla

ARCH Ventures

KPCB


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Our Four-Part Plan

Realize Invest

Partner Return

R&D Seed Stage Early-‐Stage VC

Later-‐stage VC

Time

Return

Return

Cost

R&D Seed Stage Early-‐Stage VC

Later-‐stage VC

Time

Return

Return

Cost

PARTNERING TO INCREASE RETURNS

Corporate involvement is critical to providing scale and distribution. Understanding the optimal transition point is quintessential to build capital efficient businesses.

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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

$$

TIME

REVENUE GROWTH Introduction and Access to the

Market and Customers

Value Creation

Cumulative Cost

EARLY-STAGE EXPERTISE AND CORPORATE EXPERTISE IS CRITICAL FOR BRINGING NEW TECHNOLOGY TO MARKET

Technology Plaeorms

Company Building

Market Access

Scale & Manufacturing

Corporate Partner(s)

Opportunity Space

PARTNERING EARLY IS BENEFICIAL

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We believe the skillsets of Harris & Harris Group and corporate partners are highly complementary.

Technology Plaeorms

Company Building

Market Access

Scale & Manufacturing


OUR PARTNERING STRATEGY

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Corporations are an important part of Harris & Harris Group’s current and future strategies.

H&H Portfolio Companies

•  Investment •  Development Programs •  Commercialization/

Purchase Agreements •  Licensing •  Expertise

•  Investment •  Strategic Insights •  Management Fees and

Carried Interest


Our two paths to working with corporations.

CURRENT EXAMPLE OF OUR PARTNERING STRATEGY

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Corporations currently add value to Harris & Harris Group and our portfolio companies in multiple ways.

Three Large Corporate Partners

Investment in Initial Round of Funding +

Development Programs


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Our Four-Part Plan

Realize Invest

Partner

Return

RETURNING VALUE FOR SHAREHOLDERS

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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.


Harris & Harris Group builds transformative companies

from disruptive science.

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Economy & Finance

Tiny 102013