~~Table~~SECURITIES ofAND ~~Contents~~EXCHANGE COMMISSION

~~SECURITIES~~WASHINGTON, ~~AND~~DC ~~EXCHANGE~~20549 ~~COMMISSION~~

~~WASHINGTON,~~FORM DC10-Q ~~20549~~

~~FORM~~(Mark ~~10-Q~~One)

~~(Mark~~x ~~One~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

xFor ~~QUARTERLY~~the ~~REPORT~~quarterly ~~PURSUANT~~period TOended ~~SECTION~~July 31, 132007 ~~OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.~~

~~For~~OR ~~the quarterly period ended April 30, 2007~~

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

¨For ~~TRANSITION~~the ~~REPORT~~transition ~~PURSUANT~~period ~~TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.~~from to

~~For~~Commission file ~~the~~number ~~transition~~000-29665 ~~period from to~~

~~Commission~~EXCELSIOR ~~file~~VENTURE ~~number~~PARTNERS ~~000-29665~~III, LLC

~~EXCELSIOR~~(Exact ~~VENTURE~~Name ~~PARTNERS~~of ~~III, LLC~~Registrant as Specified in Its Charter)

(Exact Name of Registrant as Specified in Its Charter)


DELAWARE		13-4102528
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

225 High Ridge Road, Stamford, CT		06905
(Address of Principal Executive Offices)		(Zip Code)

DELAWARE		13-4102528
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
225 High Ridge Road, Stamford, CT		06905
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code (203) 352-4400

~~Registrant’s~~Former ~~Telephone~~Name, ~~Number~~Former Address and Former Fiscal Year, ~~Including~~if ~~Area~~Changed ~~Code~~Since ~~(203) 352-4400~~last Report.

~~Former~~Indicate ~~Name,~~by ~~Former~~check ~~Address~~mark ~~and~~whether ~~Former~~the ~~Fiscal~~registrant: ~~Year~~(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), ifand ~~Changed~~(2) has ~~Since~~been ~~last~~subject ~~Report.~~to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the ~~registrant:~~Registrant ~~(1) has~~is ~~filed~~a ~~all~~large ~~reports~~accelerated ~~required~~filer, ~~to be filed by Section 13~~ or ~~15(d)~~a ofnon-accelerated ~~the~~filer. See ~~Securities~~definition ~~Exchange Act~~ of ~~1934~~“accelerated ~~during~~filer ~~the~~and ~~preceding~~large 12filer ~~months~~in ~~(or~~Rule ~~for~~12b-2 ~~such~~of ~~shorter period that~~ the ~~registrant~~ ~~was~~Exchange ~~required~~Act. to(check ~~file such reports~~one),: ~~and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨~~

~~Indicate~~Large ~~by check mark whether the Registrant is a large~~ accelerated ~~filer, or a non-accelerated filer. See definition of~~ ~~“accelerated~~ filer ~~and large filer in Rule 12b-2 of the Exchange Act. (check one): Large accelerated filer~~ ¨ Accelerated ~~file~~filer ¨ Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12,13 or 15(d) of the Securities Exchange Act subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

AsEXCELSIOR ofVENTURE ~~April 30,~~PARTNERS ~~2007~~III, ~~there~~LLC ~~were 295,210 shares of the Registrant’s Common Stock, $.01 par value per share, outstanding.~~

~~Table~~Excelsior Venture Partners III, LLC’s (the “Company’s”) prospects, including the prospects of ~~Contents~~its underlying investments, are subject to certain uncertainties and risks. This Quarterly Report on Form10-Q contains certain forward-looking statements within the meaning of the federal securities laws that also involve substantial uncertainties and risks. The future results of the Company and its underlying investments may differ materially from its historical results and actual results could differ materially from those projected in forward-looking statements as a result of certain risk factors. Readers should pay particular attention to the considerations described in the section of this report entitled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations.” Readers should also carefully review the risk factors described in the other documents the Company files, or has filed, from time to time with the Securities and Exchange Commission.

EXCELSIOR VENTURE PARTNERS III, LLC


	INDEX	PAGE NO.
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Portfolio of Investments at July 31, 2007 and October 31, 2006	1

	Statements of Assets and Liabilities at July 31, 2007 and October 31, 2006	7

	Statements of Operations for the nine months ended July 31, 2007 and July 31, 2006	8

	Statements of Operations for the three months ended July 31, 2007 and July 31, 2006	9

	Statements of Changes in Net Assets for the nine months ended July 31, 2007 and July 31, 2006	10

	Statements of Cash Flows for the nine months ended July 31, 2007 and July 31, 2006	11

	Financial Highlights for the nine months ended July 31, 2007 and July 31, 2006	12

	Notes to Financial Statements	13

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23

Item 4.	Controls and Procedures	23

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 2.	Changes in Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	Submission of Matters to a Vote of Security Holders	24

Item 5.	Other Information	24

Item 6.	Exhibits and Reports on Form 8-K	24

Excelsior Venture Partners III, LLC’s (the “Company’s”) prospects, including the prospects of its underlying investments, are subject to certain uncertainties and risks. This Quarterly Report on Form10-Q contains certain forward-looking statements within the meaning of the federal securities laws that also involve substantial uncertainties and risks. The future results of the Company and its underlying investments may differ materially from its historical results and actual results could differ materially from those projected in forward-looking statements as a result of certain risk factors. Readers should pay particular attention to the considerations described in the section of this report entitled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations.” Readers should also carefully review the risk factors described in the other documents the Company files, or has filed, from time to time with the Securities and Exchange Commission.

	INDEX	PAGE NO.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements.	1
	Portfolio of Investments as of April 30, 2007 and October 31, 2006.	2
	Statements of Assets and Liabilities at April 30, 2007 and October 31, 2006.	8
	Statements of Operations for the six months period ended April 30, 2007 and April 30, 2006.	9
	Statements of Operations for the three months period ended April 30, 2007 and April 30, 2006.	10
	Statements of Changes in Net Assets for the six months period ended April 30, 2007 and April 30, 2006.	11
	Statements of Cash Flows for the six months period ended April 30, 2007 and April 30, 2006.	12
	Financial Highlights for the six months period ended April 30, 2007 and April 30, 2006.	13
	Notes to Financial Statements.	14
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	23
Item 4.	Controls and Procedures.	23
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings.	24
Item 2.	Changes in Securities and Use of Proceeds.	24
Item 3.	Defaults Upon Senior Securities.	24
Item 4.	Submission of Matters to a Vote of Security Holders.	24
Item 5.	Other Information.	24
Item 6.	Exhibits and Reports on Form 8-K.	24

Portfolio of Investments July 31, 2007 (Unaudited)


Principal Amount/Shares		Acquisition Date ##	Cost	Fair Value (Note 1)	% of Net Assets ****
	MONEY MARKET INSTRUMENTS
9,825,000	Federal Home Loan Bank Discount Note 5.16%, 08/01/07		9,823,611	9,823,611	15.42	%

	PUBLIC COMPANIES
	Common Stocks
345	Akamai Tech, Inc. (AKAM)		6,465	11,716	0.02	%
5,346	Hansen Medical, Inc. (HNSN)		21,384	108,470	0.17	%
3,808	Acme Packet, Inc. (APKT)		5,293	42,078	0.07	%

	TOTAL - PUBLIC COMPANIES		33,142	162,264	0.26	%

	PRIVATE COMPANIES **
	Common Stocks #, @
	Capital Equipment
157,396	MIDAS Vision Systems, Inc.	03/03	4,000,000	—	0.00	%

	Enterprise Software
1,000,000	*** Cydelity, Inc.	08/03	1,000	—	0.00	%

	Life Sciences
46,860	Genoptix, Inc.	07/03	1,246,500	10,768	0.02	%

	Optical
1,079,541	OpVista, Inc.	06/06	9,184,031	1,280,541	2.01	%

	TOTAL COMMON STOCKS		14,431,531	1,291,309	2.03	%

	Preferred Stocks #
	Capital Equipment @
933,593	MIDAS Vision Systems, Inc., Series A-1	03/03	1,054,960	—	0.00	%

	Enterprise Software @
19,995,000	*** Cydelity, Inc. Series A	01/04	3,999,000	—	0.00	%
19,702,277	*** Cydelity, Inc. Series A-1	12/04	3,940,456	—	0.00	%
25,535,051	*** Cydelity, Inc. Series A-2	05/06	2,500,009	982,000	1.54	%
8,443,815	LogicLibrary, Inc., Series A	01/02-05/07	3,860,646	3,860,646	6.06	%
3,080,464	LogicLibrary, Inc., Series A-1	08/03-05/04	1,408,450	1,408,450	2.21	%

			15,708,561	6,251,096	9.81	%

	Life Sciences
1,999,999	Archemix Corporation, Series A	08/02-11/03	1,999,999	2,999,999	4.71	%
700,000	Archemix Corporation, Series B	03/04-12/05	700,000	1,050,001	1.65	%
942,481	Genoptix, Inc., Series 1-A @	08/04	1,253,500	1,471,285	2.31	%
1,403,696	Genoptix, Inc., Series 1-B @	08/04	1,253,500	1,576,424	2.47	%
620,580	Genoptix, Inc., Series 1-C @	08/04-01/05	554,178	696,778	1.09	%
728,413	Genoptix, Inc., Series 1-D @	05/05	461,814	631,446	0.99	%

			6,222,991	8,425,933	13.22	%

	Medical Technology @
4,166,667	Tensys Medical, Inc., Series C	03/02	5,000,000	534,354	0.84	%
1,187,500	Tensys Medical, Inc., Series D	05/04	1,425,000	152,291	0.24	%
96,629	Tensys Medical, Inc., Series E	07/06-03/07	115,955	333,166	0.52	%

			6,540,955	1,019,811	1.60	%

	Optical @
956,234	NanoOpto Corporation, Series A-1	10/01-03/02	2,231,212	—	0.00	%
3,023,399	NanoOpto Corporation, Series B	09/03-07/04	1,286,155	—	0.00	%
1,682,470	NanoOpto Corporation, Series C	03/05	733,389	—	0.00	%
1,234,263	NanoOpto Corporation, Series D	05/06	382,622	—	0.00	%
5,683,906	OpVista, Inc., Series AA	06/06-01/07	5,034,406	6,742,193	10.58	%
433,399	OpVista, Inc., Series BB	03/07	491,800	514,094	0.81	%

			10,159,584	7,256,287	11.39	%

	Semi Conductor @
7,000,000	Chips & Systems, Inc., Series A	03/04	3,500,000	—	0.00	%

	Wireless @
4,433,333	Ethertronics, Inc. Series B	06/01-05/04	6,650,000	6,650,000	10.44	%
1,697,957	Ethertronics, Inc. Series C	05/05-07/06	2,546,936	2,546,936	4.00	%

			9,196,936	9,196,936	14.44	%

	TOTAL PREFERRED STOCKS		52,383,987	32,150,063	50.46	%

~~PART~~The I.accompanying ~~FINANCIAL~~notes ~~INFORMATION~~are an integral part of these Financial Statements.

~~Item~~ 1. ~~Financial Statements.~~

Excelsior Venture Partners III, LLC

Portfolio of Investments July 31, 2007 (Unaudited)

	April 30, 2007
PrincipalAmount/Shares			AcquisitionDate ##		Cost	FairValue(Note 1)		% of NetAssets ****
PORTFOLIO STRUCTURE	Value			% of Net Assets
	PRIVATE COMPANIES **, - (continued)
SHORT-TERM INVESTMENTS:
	Notes @
MONEY MARKET INSTRUMENTS	$	10,162,187		15.26	%
	Optical
INVESTMENT COMPANIES		984,128		1.48	%
237,321	NanoOpto Corp, Bridge Note				237,320		160,000	0.25	%
PRIVATE COMPANIES		36,203,149		54.36	%
	Semi-Conductor
PRIVATE INVESTMENT FUNDS		14,826,431		22.26	%
1,441,133	Chips & Systems, Inc., 6.00% Bridge Note, March 2005 #		11/04-02/05		1,441,133		—	0.00	%
TOTAL INVESTMENTS		62,175,895		93.36	%
	TOTAL NOTES				1,678,453		160,000	0.25	%
OTHER ASSETS & LIABILITIES (NET)		4,427,323		6.64	%
	Warrants #, @
NET ASSETS	$	66,603,218		100.00	%
	Optical
229,410	NanoOpto Corp. Series C (expiration date 12/09)		12/04		—		—	0.00	%
	Wireless
281,667	Ethertronics, Inc. Series B (expiration date 09/07)		09/02-08/03		—		—	0.00	%
214,073	Ethertronics, Inc. Series C (expiration date 01/09)		05/05-07/06		—		—	0.00	%
					—		—	0.00	%
	TOTAL WARRANTS				—		—	0.00	%
	TOTAL - PRIVATE COMPANIES				68,493,971		33,601,372	52.75	%
	PRIVATE INVESTMENT FUNDS **, #
	Advanced Technology Ventures VII, L.P.		08/01-05/07		1,704,664		1,801,658	2.83	%
	Burrill Life Sciences Capital Fund		12/02-06/07		1,895,106		1,629,459	2.56	%
	CHL Medical Partners II, L.P.		01/02-05/07		1,286,856		1,258,316	1.98	%
	CMEA Ventures VI, L.P.		12/03-06/07		1,620,000		2,186,514	3.43	%
	Morgenthaler Partners VII, L.P.		07/01-07/07		1,689,654		1,576,620	2.47	%
	Prosepect Venture Partners II, L.P.		06/01-05/07		1,647,365		2,020,641	3.17	%
	Sevin Rosen Fund IX, L.P.		10/04-06/07		1,680,000		1,359,101	2.13	%
	Tallwood II, L.P.		12/02-06/07		2,140,443		1,578,720	2.49	%
	Valhalla Partners, L.P.		10/03-07/07		2,284,016		1,732,150	2.72	%
	TOTAL PRIVATE INVESTMENT FUNDS				15,948,104		15,143,179	23.78	%
	INVESTMENT COMPANIES
	Dreyfus Government Cash Management Fund Institutional Shares				984,128		984,128	1.53	%
	TOTAL INVESTMENTS				95,282,956		59,714,554	93.74	%
	OTHER ASSETS & LIABILITIES (NET)						3,989,414	6.26	%
	NET ASSETS					$	63,703,968	100.00	%

~~Excelsior~~** ~~Venture~~Restricted ~~Partners~~as ~~III~~to public resale. Total cost of restricted securities at July 31, ~~LLC~~2007 aggregated $84,442,077. Total fair value of restricted securities owned at July 31, 2007 was $48,744,551 or 76.52% of net assets.

~~Portfolio~~# ofNon-income ~~Investments~~producing ~~(Audited)~~ securities.

	October 31, 2006
PORTFOLIO STRUCTURE	Value			% of Net Assets
SHORT-TERM INVESTMENTS:
MONEY MARKET INSTRUMENTS	$	13,378,310		17.71	%
INVESTMENT COMPANIES		1,044,128		1.38	%
PRIVATE COMPANIES		48,982,337		64.82	%
PRIVATE INVESTMENT FUNDS		12,484,040		16.52	%
TOTAL INVESTMENTS		75,888,815		100.43	%
OTHER ASSETS & LIABILITIES (NET)		(326,723	)	(0.43	)%
NET ASSETS	$	75,562,092		100.00	%

At July 31, 2007, the Company owned 5% or more of the company’s outstanding shares thereby making the company an affiliate as defined by the Investment Company Act of 1940, as amended. Total fair value of affiliated securities owned at July 31, 2007 (including investments in controlled affiliates) was $29,551,372.

~~The~~*** ~~accompanying~~At ~~notes~~July ~~are~~31, an2007, ~~integral~~the ~~part~~Company owned 25% or more of ~~these~~the ~~Financial~~company’s ~~Statements~~outstanding shares thereby making the company a controlled affiliate as defined by the Investment Company Act of 1940, as amended. Total fair value of controlled affiliated securities owned at July 31, 2007 was $982,000.

1## Disclosure is required for restricted securities only.

~~Table~~**** ofBased ~~Contents~~on Fair Value.

~~Excelsior~~The ~~Venture~~accompanying ~~Partners~~notes ~~III,~~are ~~LLC~~an integral part of these Financial Statements.

~~Portfolio~~2 ~~of Investments April 30, 2007 (Unaudited)~~

PrincipalAmount/Shares/ OwnershipPercentage			AcquisitionDate(s) ##	Value (Note 1)
	MONEY MARKET INSTRUMENTS — 15.26%
$	3,000,000	Federal Home Loan Bank Discount Note 5.14%, 05/09/07		$	2,996,574
	3,000,000	Federal Home Loan Bank Discount Note 5.12%, 05/23/07			2,990,613
	4,175,000	Federal Home Loan Bank Discount Note 5.06%, 05/01/07			4,175,000
		TOTAL MONEY MARKET INSTRUMENTS (Cost $10,162,187)			10,162,187
	PRIVATE COMPANIES ** — 54.36%
	Common Stocks #,@ — 1.93%
	Capital Equipment — 0.00%
	157,396	MIDAS Vision Systems, Inc.	03/03		—
	Enterprise Software — 0.00%
	1,000,000	***Cydelity, Inc.	01/04		—
	Life Sciences — 0.00%
	46,860	Genoptix, Inc.	07/03		—
	Optical — 1.93%
	1,079,541	OpVista, Inc.,	04/06		1,280,541
		TOTAL COMMON STOCKS (Cost $14,431,530)			1,280,541
	Preferred Stocks # — 51.91%
	Capital Equipment @ — 0.00%
	933,593	MIDAS Vision Systems, Inc., Series A-1	03/03		—
	Enterprise Software @ — 10.26%
	19,995,000	***Cydelity Inc., Series A	01/04		—
	19,702,277	***Cydelity Inc., Series A-1	05/06		—
	25,535,051	***Cydelity Inc., Series A-2	05/06		1,600,000
	8,369,880	***LogicLibrary, Inc., Series A	01/02-11/06		3,826,844
	3,080,464	***LogicLibrary, Inc., Series A-1	08/03-05/04		1,408,450
					6,835,294
	Life Sciences — 8.43%
	1,999,999	Archemix Corporation, Inc., Series A	08/02-11/03		1,999,999
	700,000	Archemix Corporation, Inc., Series B	03/04-12/05		700,000
	942,481	Genoptix, Inc., Series 1-A@	08/04		950,822
	1,403,696	Genoptix, Inc., Series 1-B@	08/04		950,822
	620,580	Genoptix, Inc., Series 1-C@	08/04-01/05		554,178
	728,413	Genoptix, Inc., Series 1-D@	05/05		461,815
					5,617,636
	Medical Technology @ — 3.64%
	4,166,667	Tensys Medical, Inc., Series C	03/02		1,887,160
	1,187,500	Tensys Medical, Inc., Series D	05/04		537,840
					2,425,000

Excelsior Venture Partners III, LLC

~~The~~Portfolio ~~accompanying~~of ~~notes~~Investments ~~are~~at anOctober 31, ~~integral~~2006 ~~part~~(Audited) ~~of these Financial Statements.~~


Principal Amount/Shares		Acquisition Date ##	Value (Note 1)
	MONEY MARKET INSTRUMENTS — 17.71%
$1,500,000	Federal Farm Credit Bank Discount Note 5.07%, 11/01/06		$	1,500,000
6,890,000	Federal Farm Credit Bank Discount Note 5.09%, 11/13/06			6,878,310
2,000,000	Federal Home Loan Bank Discount Note 5.09%, 11/01/06			2,000,000
3,000,000	Federal Home Loan Bank Discount Note 5.065%, 11/01/06			3,000,000

	TOTAL MONEY MARKET INSTRUMENTS (Cost $ 13,378,310)			13,378,310

	PRIVATE COMPANIES — 64.82%**
	Common Stocks #, @— 1.50%
	Capital Equipment — 0.00%
157,396	MIDAS Vision Systems, Inc.	03/03		—

	Enterprise Software – 0.00%
1,000,000	***Cydelity, Inc.	01/04		—

	Life Sciences – 0.00%
46,860	Genoptix, Inc.	07/03		—

	Optical – 1.50%
1,079,541	OpVista, Inc,.	06/06		1,138,542

	Semiconductor – 0.00%
40,026	Silverback Systems, Inc.	04/06		—

	TOTAL COMMON STOCKS (Cost $ 19,190,611)			1,138,542

	Preferred Stocks # — 61.39%
	Capital Equipment @ — 0.00%
933,593	MIDAS Vision Systems, Inc., Series A-1
		03/03		—

	Enterprise Software @ — 25.82%
19,995,000	***Cydelity, Inc., Series A	01/04		—
19,702,277	***Cydelity, Inc., Series A-1	05/06		3,940,456
25,535,051	***Cydelity, Inc., Series A-2	05/06		2,500,009
7,762,821	***LogicLibrary, Inc., Series A	01/02,12/04, 02/05,08/05, 03/06,08/06,09/06		3,549,296
3,080,464	***LogicLibrary, Inc., Series A-1	08/03 & 05/04		1,408,450
46,362,656	***Pilot Software Inc., Series A	05/02, 04/03, 06/05		8,110,096

				19,508,307

~~Table~~The accompanying notes are an integral part of ~~Contents~~these Financial Statements.

~~Excelsior~~3 ~~Venture Partners III, LLC~~

~~Portfolio~~Excelsior ofVenture ~~Investments~~Partners ~~April 30~~III, ~~2007~~LLC ~~(Unaudited) (continued)~~

PrincipalAmount/Shares/ OwnershipPercentage		AcquisitionDate(s) ##	Value (Note 1)
PRIVATE COMPANIES **— 54.36%
Optical @ — 15.77%
956,234	NanoOpto Corporation, Series A-1	10/01-03/02	840,912
3,023,399	NanoOpto Corporation, Series B	09/03-07/04	1,286,155
1,682,470	NanoOpto Corporation, Series C	03/05	733,389
1,234,263	NanoOpto Corporation, Series D	05/06	382,622
5,683,907	OpVista, Inc., Series AA	06/06-01/07	6,742,193
433,399	OpVista, Inc., Series BB Convertible	03/07	514,094
			10,499,365
Semiconductor @ — 0.00%
7,000,000	Chips & Systems, Inc., Series A	03/04	—
			—
Wireless @— 13.81%
4,433,333	Ethertronics, Inc., Series B	06/01-05/04	6,650,000
1,697,957	Ethertronics, Inc., Series C	05/05-07/06	2,546,936
			9,196,936
	TOTAL PREFERRED STOCKS (Cost $52,234,230)		34,574,231
Notes @ —0.52%
Medical Technology — 0.16%
111,056	Tensys Medical, Inc., Bridge Note	07/06-03/07	111,056
Optical — 0.36 %
237,321	NanoOpto Corp., Bridge Note	03/07	237,321
Semiconductor— 0.00 %
1,441,133	Chips & Systems, Inc., 6% Bridge Note March 2005 #	11/04-02/05	—
	TOTAL NOTES (Cost $1,789,510)		348,377
Warrants #,@ — 0.00%
Optical— 0.00 %
229,410	NanoOpto Corp. Series C (expiration date 12/09)	12/04	—
Wireless — 0.00%
281,667	Ethertronics, Inc., Series B (expiration date 09/07)	09/02-08/03	—
214,073	Ethertronics, Inc., Series C (expiration date 01/09)	05/05-07/06	—
	TOTAL WARRANTS (Cost $0)		—
	TOTAL — PRIVATE COMPANIES (Cost $68,455,270)		36,203,149

Portfolio of Investments at October 31, 2006 (Audited)(continued)

The accompanying notes are an integral part of these Financial Statements.


Shares/Principal Amount		Acquisition Date ##	Value (Note 1)
	PRIVATE COMPANIES , — (continued)**
	Preferred Stocks # — (continued)
	Life Sciences — 7.43%
1,999,999	Archemix Corporation, Series A	08/02, 01/03, 11/03	1,999,999
700,000	Archemix Corporation, Series B	03/04, 09/04, 12/05	700,000
942,481	Genoptix, Inc., Series 1-A @	08/04	950,822
1,403,696	Genoptix, Inc., Series 1-B @	08/04	950,822
620,580	Genoptix, Inc., Series 1-C @	08/04,01/05	554,178
728,413	Genoptix, Inc., Series 1-D @	05/05	461,815

			5,617,636

	Medical Technology @ — 3.21%
4,166,667	Tensys Medical, Inc., Series C	03/02	1,887,160
1,187,500	Tensys Medical, Inc., Series D	05/04	537,840

			2,425,000

	Optical @ — 11.40%
956,234	NanoOpto Corporation, Series A-1	10/01&3/02	840,912
		09/03, 11/03,
3,023,399	NanoOpto Corporation, Series B	01/04, 07/04	1,286,155
1,682,470	NanoOpto Corporation, Series C	03/05	733,389
1,234,263	NanoOpto Corporation, Series D	05/06	382,622
5,089,790	OpVista, Inc., Series AA	06/06, 08/06	5,367,967

			8,611,045

	Semi-Conductor @ — 2.12%
7,000,000	Chips & Systems, Inc., Series A	03/04	—
772,503	Silverback Systems, Inc., Series A-2	04/06	—
559,993	Silverback Systems, Inc., Series B	04/06	1,600,000

			1,600,000

	Wireless @ — 11.41%
4,433,333	Ethertronics, Inc., Series B	06/01, 09/02, 07/03, 05/04	6,650,000
1,316,793	Ethertronics, Inc., Series C	05/05, 10/05, 07/06	1,975,190

			8,625,190

	TOTAL PREFERRED STOCKS (COST $62,048,095)		46,387,178

3The accompanying notes are an integral part of these Financial Statements.

~~Table~~4 ~~of Contents~~

Excelsior Venture Partners III, LLC

Portfolio of Investments ~~April~~October 3031, ~~2007~~2006 — (~~Unaudited~~Audited) (continued)

PrincipalAmount/OwnershipPercentage					Acquisition Date(s) ##		Value(Note1)
Shares/PrincipalAmount				AcquisitionDate ##		Value (Note 1)
PRIVATE INVESTMENT FUNDS **, # —22.26%
		PRIVATE COMPANIES **, — (continued)
0.37	%		Advanced Technology Ventures VII, LP		08/01-04/07		1,705,446
		Notes@ — 1.93%
1.56	%		Burrill Life Sciences Capital Fund		12/02-03/07		1,444,347
		Enterprise Software — 1.86%
1.33	%		CHL Medical Partners II, LP		01/02-03/07		1,236,592
$1,404,600		***Pilot Software Inc., 9.00% Bridge Note		08/06, 10/06		1,404,600
1.04	%		CMEA Ventures VI, LP		12/03-04/07		1,687,487
		Medical Technology — 0.07%
0.36	%		Morgenthaler Partners VII, LP		07/01-01/07		1,747,977
$52,017		Tensys Medical, Inc., 8.00% Bridge Note		07/06		52,017
0.56	%		Prospect Venture Partners II, LP		06/01-04/07		2,084,587
		Semi-Conductor — 0.00%
0.98	%		Sevin Rosen Fund IX, LP		10/04-04/07		1,298,872
$1,441,133		Chips & Systems, Inc., 6.00% Bridge Note, March 2005 #		11/04, 01/05, 02/05		—
2.36	%		Tallwood II, LP		12/02-11/06		1,428,929
		TOTAL NOTES (COST $2,897,750)				1,456,617
1.70	%		Valhalla Partners, LP		10/03-04/07		2,192,194
		Warrants #, @ — 0.00%
			TOTAL — PRIVATE INVESTMENT FUNDS (Cost $15,283,279)				14,826,431
		Optical — 0.00%
INVESTMENT COMPANIES —1.48%
229,410		NanoOpto Corp. Series C (expiration date 12/09)		12/04		—
984,128			Dreyfus Government Cash Management Fund Institutional Shares (Cost $984,128)				984,128
		Wireless — 0.00%
TOTAL INVESTMENTS (Cost $94,884,864) – 93.36%							62,175,895
281,667		Ethertronics, Inc. Series B (expiration date 09/07)		09/02, 07/03, 08/03		—
OTHER ASSETS & LIABILITIES (NET) – 6.64%							4,427,323
214,073		Ethertronics, Inc. Series C (expiration date 01/09)		05/05, 10/05, 07/06		—
NET ASSETS – 100.00%							66,603,218
		TOTAL WARRANTS (Cost $0)				—
		TOTAL — PRIVATE COMPANIES (Cost $84,136,456)				48,982,337
Percent Owned
		PRIVATE INVESTMENT FUNDS **, # — 16.52%
0.39%		Advanced Technology Ventures VII, L.P.		08/01-09/06		1,342,895
1.58%		Burrill Life Sciences Capital Fund		12/02-09/06		1,311,766
1.35%		CHL Medical Partners II, L.P.		01/02-10/06		1,024,130
1.04%		CMEA Ventures VI, L.P.		12/03-08/06		1,086,085
0.36%		Morgenthaler Partners VII, L.P.		07/01-10/06		1,620,474
0.58%		Prospect Ventures Partners II, L.P.		06/01-10/06		1,801,556
0.98%		Sevin Rosen Fund IX, L.P.		10/04-09/06		1,151,676
2.36%		Tallwood II, L.P.		12/02-05/06		1,513,112
1.70%		Valhalla Partners, L.P.		10/03-06/06		1,632,346
		TOTAL PRIVATE INVESTMENT FUNDS (Cost $13,780,450)				12,484,040

**The ~~Restricted~~accompanying asnotes toare ~~public~~an ~~resale.~~integral ~~Total~~part ~~cost~~ of ~~restricted~~these ~~securities~~Financial ~~at April 30, 2007 aggregated $83,738,549~~Statements. ~~Total value of restricted securities owned at April 30, 2007 was $51,029,580 or 76.62% of net assets.~~

#5 ~~Non-income producing securities.~~

@Excelsior ~~April~~Venture ~~30,~~Partners ~~2007 the Company owned 5% or more of the company’s outstanding shares thereby making the company an affiliate as defined bythe Investment Company Act of 1940~~III, asLLC ~~amended. Total value of affiliated securities owned at April 30, 2007 (including investments incontrolled affiliates) was $33,503,150.~~

~~***~~Portfolio ~~At April 30, 2007 the Company owned 25% or more~~ of ~~the~~Investments ~~company’s outstanding shares thereby making the company a controlled affiliate as defined by the Investment Company Act of 1940~~October 31, as2006 ~~amended.~~— ~~Total~~(Audited)(continued) ~~value of controlled affiliated securities owned at April 30, 2007 was $6,835,294.~~

## Disclosure is required for restricted securities only.


Shares/Principal Amount		Acquisition Date ##	Value (Note 1)
	INVESTMENT COMPANIES – 1.38%
1,044,128	Dreyfus Government Cash Management Fund Institutional Shares (Cost $1,044,128)		1,044,128

	TOTAL INVESTMENTS (Cost $112,339,344) – 100.43%		75,888,815
	OTHER ASSETS & LIABILITIES (NET) –(0.43%)		(326,723)

	NET ASSETS – 100.00%		$75,562,092

~~The~~** ~~accompanying~~Restricted ~~notes~~as ~~are~~to anpublic ~~integral~~resale. ~~part~~Acquired between June 1, 2001 and October 31, 2006. Total cost of ~~these~~restricted ~~Financial~~securities ~~Statements~~at October 31, 2006 aggregated $97,916,906. Total value of restricted securities owned at October 31, 2006 was $61,466,377 or 81.35% of net assets.

4# Non-income producing securities.

~~Table~~@ At October 31, 2006, the Company owned 5% or more of ~~Contents~~the company’s outstanding voting shares thereby making the company an affiliate as defined by the Investment Company Act of 1940, as amended. Total value of affiliated securities owned at October 31, 2006 (including investments in controlled affiliates) was $46,282,338.

~~Excelsior~~*** ~~Venture~~At ~~Partners~~October ~~III~~31, ~~LLC~~2006, the Company owned 25% or more of the company’s outstanding voting shares or a controlling interest thereby making the company a controlled affiliate as defined by the Investment Company Act of 1940. Total value of controlled affiliated securities owned at October 31, 2006 was $20,912,907.

~~Portfolio~~## ofDisclosure ~~Investments~~is atrequired ~~October 31,~~for ~~2006 (Audited)~~restricted securities only.

PrincipalAmount/Shares/ OwnershipPercentage			AcquisitionDate(s) ##	Value(Note 1)
	MONEY MARKET INSTRUMENTS —17.71%
$	1,500,000	Federal Farm Credit Bank Discount Note 5.07%, 11/01/06		1,500,000
	6,890,000	Federal Farm Credit Bank Discount Note 5.09%, 11/13/06		6,878,310
	2,000,000	Federal Home Loan Bank Discount Note 5.09%, 11/01/06		2,000,000
	3,000,000	Federal Home Loan Bank Discount Note 5.065%, 11/01/06		3,000,000
		TOTAL MONEY MARKET INSTRUMENTS (Cost $13,378,310)		13,378,310
	PRIVATE COMPANIES ** — 64.82%
		Common Stocks #, @— 1.50%
		Capital Equipment — 0.00%
	157,396	MIDAS Vision Systems, Inc.	03/03	—
		Enterprise Software – 0.00%
	1,000,000	***Cydelity, Inc.	01/04	—
		Life Sciences – 0.00%
	46,860	Genoptix, Inc.	07/03	—
		Optical – 1.50%
	1,079,541	OpVista, Inc,.	06/06	1,138,542
		Semiconductor – 0.00%
	40,026	Silverback Systems, Inc.	04/06	—
		TOTAL COMMON STOCKS (Cost $19,190,611)		1,138,542
		Preferred Stocks # — 61.39%
		Capital Equipment @ — 0.00%
	933,593	MIDAS Vision Systems, Inc., Series A-1	03/03	—
		Enterprise Software @ — 25.82%
	19,995,000	***Cydelity, Inc., Series A	01/04	—
	19,702,277	***Cydelity, Inc., Series A-1	05/06	3,940,456
	25,535,051	***Cydelity, Inc., Series A-2	05/06	2,500,009
	7,762,821	***LogicLibrary, Inc., Series A	01/02-09/06	3,549,296
	3,080,464	***LogicLibrary, Inc., Series A-1	08/03-05/04	1,408,450
	46,362,656	***Pilot Software Inc., Series A	05/02-06/05	8,110,096
				19,508,307
		Life Sciences — 7.43%
	1,999,999	Archemix Corporation, Series A	08/02-11/03	1,999,999
	700,000	Archemix Corporation, Series B	03/04-12/05	700,000
	942,481	Genoptix, Inc., Series 1-A @	08/04	950,822
	1,403,696	Genoptix, Inc., Series 1-B @	08/04	950,822
	620,580	Genoptix, Inc., Series 1-C @	08/04-01/05	554,178
	728,413	Genoptix, Inc., Series 1-D @	05/05	461,815
				5,617,636
		Medical Technology @ — 3.21%
	4,166,667	Tensys Medical, Inc., Series C	03/02	1,887,160
	1,187,500	Tensys Medical, Inc., Series D	05/04	537,840
				2,425,000

The accompanying notes are an integral part of these Financial Statements.

~~The~~6 ~~accompanying notes are an integral part of these Financial Statements~~

5 Excelsior Venture Partners III, LLC

~~Table~~Statement of ~~Contents~~Assets and Liabilities

Excelsior Venture Partners III, LLC


	July 31, 2007 (Unaudited)			October 31, 2006 (Audited)
ASSETS:
Unaffiliated Issuers at value (Cost $29,488,984 and $30,902,887 respectively)	$	30,163,182		$	29,606,477
Controlled Affiliated Issuers at value (Cost $10,440,465 and $24,912,907 respectively)		982,000			20,912,907
Non-Controlled Affiliated Issuers at value (Cost $55,353,507 and $56,523,550 respectively)		28,569,372			25,369,431

Investments, at value (Cost $95,282,956 and $112,339,344 respectively) (Note 1)		59,714,554			75,888,815

Cash and cash equivalents (Note 1)		2,571			2,934
Investment proceeds receivable		1,897,928			—
Restricted cash (Note 1)		2,672,394			—
Interest receivable		4,274			24,939
Prepaid insurance		8,838			1,378
Receivable from affiliates		4,242			—
Other receivables		1,945			1,945

Total Assets		64,306,746			75,920,011

LIABILITIES:
Deferred income (Note 1)		258,809			—
Management fees payable (Note 2)		160,975			190,458
Professional fees payable		128,185			87,000
Administration fees payable (Note 2)		30,944			53,961
Board of Managers’ fees payable (Note 2)		16,000			22,000
Other payables		7,865			4,500

Total Liabilities		602,778			357,919

NET ASSETS	$	63,703,968		$	75,562,092

NET ASSETS consist of:
Accumulated net realized (loss)	$	(19,399,620	)	$	—
Accumulated net investment (loss)		(7,836,225	)		—
Members’ Capital, net of distributions		126,508,215			112,012,621
Accumulated net unrealized (depreciation) on investments		(35,568,402	)		(36,450,529	)

Total Net Assets	$	63,703,968		$	75,562,092

Units of Membership Interest Outstanding (Unlimited Number of no par value units authorized)		295,210			295,210

NET ASSET VALUE PER UNIT	$	215.79		$	255.96

~~Portfolio~~The ofaccompanying ~~Investments~~notes ~~October 31,~~are ~~2006~~an ~~(Audited)~~integral ~~— (continued)~~part of these Financial Statements.

Shares/PrincipalAmount/ OwnershipPercentage			Acquisition Date(s) ##	Value (Note 1)
		PRIVATE COMPANIES **
		Preferred Stocks #
		Optical @ — 11.40%
	956,234	NanoOpto Corporation, Series A-1	10/01-3/02	840,912
	3,023,399	NanoOpto Corporation, Series B	09/03-07/04	1,286,155
	1,682,470	NanoOpto Corporation, Series C	03/05	733,389
	1,234,263	NanoOpto Corporation, Series D	05/06	382,622
	5,089,790	OpVista, Inc., Series AA	06/06-08/06	5,367,967
				8,611,045
		Semi-Conductor @ — 2.12%
	7,000,000	Chips & Systems, Inc., Series A	03/04	—
	772,503	Silverback Systems, Inc., Series A-2	04/06	—
	559,993	Silverback Systems, Inc., Series B	04/06	1,600,000
				1,600,000
		Wireless @ — 11.41%
	4,433,333	Ethertronics, Inc., Series B	06/01-05/04	6,650,000
	1,316,793	Ethertronics, Inc., Series C	05/05-07/06	1,975,190
				8,625,190
		TOTAL PREFERRED STOCKS (COST $62,048,095)		46,387,178
		Notes@ — 1.93%
		Enterprise Software — 1.86%
$	1,404,600	***Pilot Software Inc., 9.00% Bridge Note , August 2007 & October 2007	08/06-10/06	1,404,600
		Medical Technology — 0.07%
$	52,017	Tensys Medical, Inc., 8.00% Bridge Note, April 2007	07/06	52,017
		Semi-Conductor —0.00%
$	1,441,133	Chips & Systems, Inc., 6.00% Bridge Note, March 2005 #	11/04-02/05	—
		TOTAL NOTES (COST $2,897,750)		1,456,617
		Warrants #, @ —0.00%
		Optical — 0.00%
	229,410	NanoOpto Corp. Series C (expiration date 12/09)	12/04	—
		Wireless — 0.00%
	281,667	Ethertronics, Inc. Series B (expiration date 09/07)	09/02-08/03	—
	214,073	Ethertronics, Inc. Series C (expiration date 01/09)	05/05-07/06	—
		TOTAL WARRANTS (Cost $0)		—
		TOTAL — PRIVATE COMPANIES (Cost $84,136,456)		48,982,337

~~The~~ Excelsior ~~accompanying~~Venture ~~notes~~Partners ~~are~~III, anLLC ~~integral part of these Financial Statements.~~

6Statement of Operations (Unaudited)


	Nine Months Ended
	July 31, 2007			July 31, 2006
INVESTMENT INCOME:
Interest income from unaffiliated investments	$	(7,538	)	$	792,312
Interest income from short-term investments		484,578			—
Interest income from affiliated investments		—			198,447
Dividend income from short-term investments		38,997			28,137

Total Investment Income		516,037			1,018,896

EXPENSES:
Management fees (Note 2)		509,020			1,040,862
Professional fees		287,621			196,637
Board of Managers’ fees (Note 2)		66,000			68,500
Administration fees (Note 2)		86,250			103,507
Insurance expense		23,459			33,117
Custodian fees (Note 2)		22,500			25,401
Miscellaneous fees		23,488			22,150

Total Expenses		1,018,338			1,490,174

NET INVESTMENT (LOSS)		(502,301	)		(471,278	)

NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: (Note 1)
Net realized (loss) on affiliated investments		(4,377,728	)		(6,548	)
Net realized gain/(loss) on unaffiliated investments		405,658			(4,611,520	)
Net change in unrealized appreciation/(depreciation) on investments		882,127			(9,806,680	)

NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS		(3,089,943	)		(14,424,748	)

NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(3,592,244	)	$	(14,896,026	)

~~Excelsior~~The ~~Venture~~accompanying ~~Partners~~notes ~~III,~~are ~~LLC~~an integral part of these Financial Statements.

~~Portfolio~~8 ~~of Investments October 31, 2006 (Audited) — (continued)~~

PrincipalAmount/Shares/OwnershipPercentage			Acquisition Date(s) ##	Value (Note 1)
		PRIVATE INVESTMENT FUNDS **, # — 16.52%
0.39	%	Advanced Technology Ventures VII, L.P.	08/01-09/06		1,342,895
1.58	%	Burrill Life Sciences Capital Fund	12/02-09/06		1,311,766
1.35	%	CHL Medical Partners II, L.P.	01/02-10/06		1,024,130
1.04	%	CMEA Ventures VI, L.P.	12/03-08/06		1,086,085
0.36	%	Morgenthaler Partners VII, L.P.	07/01-10/06		1,620,474
0.58	%	Prospect Ventures Partners II, L.P.	06/01-10/06		1,801,556
0.98	%	Sevin Rosen Fund IX, L.P.	10/04-09/06		1,151,676
2.36	%	Tallwood II, L.P.	12/02-05/06		1,513,112
1.70	%	Valhalla Partners, L.P.	10/03-06/06		1,632,346
		TOTAL PRIVATE INVESTMENT FUNDS (Cost $13,780,450)			12,484,040
		INVESTMENT COMPANIES – 1.38%
1,044,128		Dreyfus Government Cash Management Fund Institutional Shares (Cost $1,044,128)			1,044,128
		TOTAL INVESTMENTS (Cost $112,339,344) – 100.43%			75,888,815
		OTHER ASSETS & LIABILITIES (NET) –(0.43%)			(326,723	)
		NET ASSETS – 100.00%		$	75,562,092

Excelsior Venture Partners III, LLC

**Statement ~~Restricted as to public resale. Total cost~~ of ~~restricted~~Operations ~~securities~~(Unaudited) ~~at October 31, 2006 aggregated $97,916,906. Total value of restricted securities owned at October 31, 2006 was $61,466,377 or 81.35% of net assets.~~

# Non-income producing securities.


	Three Months Ended
	July 31, 2007			July 31, 2006
INVESTMENT INCOME:
Interest income from unaffiliated investments	$	(7,538	)	$	225,022
Interest income from short-term investments		131,096			—
Interest income from affiliated investments		—			1,780
Dividend income from short-term investments		12,402			12,821

Total Investment Income		135,960			239,623

EXPENSES:
Management fees (Note 2)		160,975			197,744
Professional fees		77,682			80,246
Board of Managers’ fees (Note 2)		22,000			38,747
Administration fees (Note 2)		28,750			38,073
Insurance expense		7,906			11,052
Custodian fees		7,500			7,500
Miscellaneous fees		8,488			5,750

Total Expenses		313,301			379,112

NET INVESTMENT (LOSS)		(177,341	)		(139,489	)

NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: (Note 1)
Net realized (loss) on affiliated investments		(258,809	)		(4,627,916	)
Net realized gain on unaffiliated investments		396,333			2
Net change in unrealized (depreciation) on investments		(2,859,433	)		(6,867,910	)

NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS		(2,721,909	)		(11,495,824	)

NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(2,899,250	)	$	(11,635,313	)

@The Ataccompanying ~~October~~notes ~~31,~~are ~~2006, the Company owned 5% or more of the company’s outstanding voting shares thereby making the company~~ an ~~affiliate~~integral aspart ~~defined by the Investment Company Act~~ of ~~1940,~~these asFinancial ~~amended~~Statements. ~~Total value of affiliated securities owned at October 31, 2006 (including investments in controlled affiliates) was $46,282,338. See Note 5.~~

~~***~~9 At October 31, 2006, the Company owned 25% or more of the company’s outstanding voting shares or a controlling interest thereby making the company a controlled affiliate as defined by the Investment Company Act of 1940, as amended. Total value of controlled affiliated securities owned at October 31, 2006 was $20,912,907. See Note 5.

## Excelsior ~~Disclosure~~Venture isPartners ~~required~~III, ~~for~~LLC ~~restricted securities only.~~

~~The~~Statement ~~accompanying~~of ~~notes~~Changes ~~are~~in anNet ~~integral~~Assets ~~part~~(Unaudited) ~~of these Financial Statements.~~


	Nine Months Ended
	July 31, 2007			July 31, 2006
OPERATIONS:
Net investment (loss)	$	(502,301	)	$	(471,278	)
Net realized (loss) on investments		(3,972,070	)		(4,618,068	)
Net change in unrealized appreciation/(depreciation) on investments		882,127			(9,806,680	)

Net (decrease) in net assets resulting from operations		(3,592,244	)		(14,896,026	)

DISTRIBUTION TO MEMBERS:
Distribution to Members		(8,265,880	)		—

Total Distributions		(8,265,880	)		—

NET (DECREASE) IN NET ASSETS		(11,858,124	)		(14,896,026	)

NET ASSETS:
Beginning of period		75,562,092			93,348,847

End of period		63,703,968		$	78,452,821

~~Table~~The accompanying notes are an integral part of ~~Contents~~these Financial Statements.

~~Excelsior~~10 ~~Venture Partners III, LLC~~

~~Statements~~ Excelsior ofVenture ~~Assets~~Partners ~~and~~III, ~~Liabilities~~LLC

	April 30, 2007(Unaudited)			October 31, 2006(Audited)
ASSETS:
Unaffiliated Issuers at value (Cost $29,129,593 and $30,902,887 respectively)	$	28,672,745		$	29,606,477
Controlled Affiliated Issuers at value (Cost $15,675,759 and $24,912,907 respectively)		6,835,294			20,912,907
Non-Controlled Affiliated Issuers at value (Cost $50,079,512 and $56,523,550 respectively)		26,667,856			25,369,431
Investments, at value (Cost $94,884,864 and $112,339,344 respectively) (Note 1)		62,175,895			75,888,815
Cash and cash equivalents (Note 1)		165,071			2,934
Interest receivable		12,753			24,939
Sale of Investment receivable		4,604,587			—
Other receivables		1,945			1,945
Prepaid Insurance		16,743			1,378
Total Assets		66,976,994			75,920,011
LIABILITIES:
Management fees payable (Note 2)		162,402			190,458
Professional fees payable		76,265			87,000
Administration fees payable (Note 2)		77,639			53,961
Board of Managers’ fees payable (Note 2)		44,000			22,000
Other payables		13,470			4,500
Total Liabilities		373,776			357,919
NET ASSETS	$	66,603,218		$	75,562,092
NET ASSETS consist of:
Members’ capital	$	99,312,187		$	112,012,621
Accumulated net unrealized (depreciation) on investments		(32,708,969	)		(36,450,529	)
Total Net Assets	$	66,603,218		$	5,562,092
Units of Membership Interest Issued and Outstanding (Unlimited Number of no par value units authorized)		295,210			295,210
NET ASSET VALUE PER UNIT	$	225.61		$	255.96

Statement of Cash Flows (Unaudited)

The accompanying notes are an integral part of these Financial Statements.


	Nine Months Ended
	July 31, 2007			July 31, 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (decrease) in net assets resulting from operations	$	(3,592,244	)	$	(14,896,026	)
Adjustments to reconcile net (decrease) in net assets resulting from operations to net cash provided by/(used in) operating activities:
Net change in unrealized (appreciation)/depreciation on investments		(882,127	)		9,806,680
Purchase of investments		(5,507,172	)		(13,712,456	)
Proceeds received from the sale of investments and distributions received from private investment funds		14,976,791			2,202,944
Proceeds from short-term investments - Net		3,614,699			11,311,332
Net realized loss on investments		3,972,070			4,618,068
(Increase) in investment proceeds receivable		(1,897,928	)		—
(Increase) in restricted cash		(2,672,394	)		—
Decrease in interest receivable		20,665			167,761
(Increase) in receivable from affiliates		(4,242	)		—
Decrease in other receivable		—			213,571
(Increase) in prepaid insurance		(7,460	)		(9,914	)
Increase in deferred income payable		258,809			—
(Decrease) in management fee payable		(29,483	)		(271,551	)
Increase in professional fees payable		41,185			—
(Decrease)/increase in Board of Manager’s fees payable		(6,000	)		4,000
(Decrease) in administration fees payable		(23,017	)		—
Increase/(decrease) in other payable		3,365			(7,333	)

Net cash provided by/(used in) operating activities		8,265,517			(572,924	)

CASH FLOWS FROM FINANCING ACTIVITIES
Cash distributions to unitholders		(8,265,880	)		—

Net cash (used in) financing activities		(8,265,880	)		—

Net (decrease) in cash		(363	)		(572,924	)

Cash and cash equivalents at beginning of period		2,934			574,146

Cash and cash equivalents at end of period	$	2,571		$	1,222

SUPPLIMENTAL INFORMATION
Non-cash distributions received from private investment funds	$	171,233			—

8The accompanying notes are an integral part of these Financial Statements.

~~Table~~11 ~~of Contents~~

Excelsior Venture Partners III, LLC

~~Statements~~Financial ofHighlights ~~Operations~~ (Unaudited)

	Six Months Ended April 30,
	2007			2006
INVESTMENT INCOME:
Interest income from unaffiliated investments	$	365,742		$	567,290
Interest income from affiliated investments		(12,259	)		196,667
Dividend income		26,595			15,316
Total Investment Income		380,078			779,273
EXPENSES:
Management fees (Note 2)		348,046			843,118
Professional fees		191,606			116,390
Administration fees (Note 2)		75,833			65,434
Board of Managers’ fees (Note 2)		44,000			29,754
Insurance Expense		15,554			22,065
Custodian fees		15,000			17,901
Miscellaneous fees		15,000			16,400
Total Expenses		705,039			1,111,062
NET INVESTMENT LOSS		(324,961	)		(331,789	)
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: (Note 1)
Net realized (loss) on investments on unaffiliated investments		(9,461	)		(6,550	)
Net realized (loss) gain on investments on affiliated investments		(4,100,132	)		16,396
Net change in unrealized appreciation (depreciation) on investments		3,741,560			(2,938,770	)
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS		(368,033	)		(2,928,924	)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(692,994	)	$	(3,260,713	)

Per Unit Operating Performance: (1)

The accompany notes are an integral part of these Financial Statements.


	Nine Months Ended
	July 31, 2007			July 31, 2006
NET ASSET VALUE, BEGINNING OF PERIOD	$	255.96		$	316.21
INCOME FROM INVESTMENT OPERATIONS:
Net investment (loss)		(1.70	)		(1.60	)
Net realized and unrealized (loss) on investment transactions		(10.47	)		(48.86	)

Net (decrease) in net assets resulting from operations		(12.17	)		(50.46	)

DISTRIBUTION TO MEMBERS:
Distribution to Members		(28.00	)		—

NET DECREASE IN NET ASSETS:		(40.17	)		(50.46	)

NET ASSET VALUE, END OF PERIOD	$	215.79		$	265.75

TOTAL NET ASSET VALUE RETURN (3),(4)		(5.04	)%		(15.96	)%

RATIOS AND SUPPLEMENTAL DATA (5)
Net Assets, End of Period (000’s)	$	63,704		$	78,453
Ratios to Average Net Assets: (2)
Expenses		1.92	%		2.24	%
Net Investment (loss)		(0.95	)%		(0.71	)%
Portfolio Turnover Rate (3)		9.94	%		3.42	%

9(1) Selected data for a unit of membership interest outstanding throughout each period.

~~Table~~(2) ofAnnualized ~~Contents~~for period less than a year.

~~Excelsior~~(3) ~~Venture~~Not ~~Partners~~annualized ~~III,~~for ~~LLC~~periods less than a year.

~~Statements~~(4) Total net asset value return based on per unit net asset value reflects the effects of ~~Operations~~changes ~~(Unaudited)~~in net asset value based on the performance of the Company during the period, and assumes dividends and distributions, if any, were reinvested. The Company’s units were issued in a private placement and are not traded. Therefore, the value of total investment return is not presented.

	Three Months Ended April 30,
	2007			2006
INVESTMENT INCOME:
Interest income from unaffiliated investments	$	196,940		$	280,907
Interest income from affiliated investments		(45,171	)		106,304
Dividend income		13,160			5,693
Total Investment Income		164,929			392,904
EXPENSES:
Management fees (Note 2)		162,403			378,063
Professional fees		79,460			65,978
Administration fees (Note 2)		37,916			32,652
Board of Managers’ fees (Note 2)		22,000			14,630
Insurance Expense		7,648			10,610
Custodian fees		7,500			12,375
Miscellaneous fees		7,500			12,358
Total Expenses		324,427			526,666
NET INVESTMENT LOSS		(159,498	)		(133,762	)
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: (Note 1)
Net realized gain on investments on affiliated investments		3,292,793			683
Net realized (loss) on investments on unaffiliated investments		(686	)		(6,550	)
Net change in unrealized (depreciation) on investments		(1,915,488	)		(2,024,990	)
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS		1,376,619			(2,030,857	)
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	1,217,121		$	(2,164,619	)

(5)	Income and expense ratios do not reflect the Company’s proportionate share of net investment income/(loss) and expenses, including any performance-based fees, of the Private Investment Funds.

The accompanying notes are an integral part of these Financial Statements.

1012

~~Table~~ EXCELSIOR ofVENTURE ~~Contents~~PARTNERS III, LLC

~~Excelsior~~NOTES ~~Venture~~TO ~~Partners~~FINANCIAL ~~III,~~STATEMENTS ~~LLC~~(Unaudited)

~~Statements~~July 31, of2007 ~~Changes in Net Assets (Unaudited)~~

	Six Months Ended April 30,
	2007			2006
OPERATIONS:
Net investment loss	$	(324,961	)	$	(331,789	)
Net realized (loss)/gain on investments		(4,109,593	)		9,846
Net change in unrealized appreciation/(depreciation) on investments		3,741,560			(2,938,770	)
Net (decrease) in net assets resulting from operations		(692,994	)		(3,260,713	)
DISTRIBUTIONS TO SHAREHOLDERS:
Return of Capital		(8,265,880	)		—
Total Distributions		(8,265,880	)		—
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:		(8,958,874	)		(3,260,713	)
NET ASSETS:
Beginning of period		75,562,092			93,348,847
End of period (including accumulated net investment (loss) of ($324,961) and ($331,789), respectively).	$	66,603,218		$	90,088,134

Note 1 — Organization and Significant Accounting Policies

Excelsior Venture Partners III, LLC (the “Company”) is a non-diversified, closed-end management investment company which has elected to be treated as a business development company or “BDC” under the Investment Company Act of 1940, as amended (the “1940 Act”). The ~~accompanying~~Company ~~notes~~was ~~are~~established anas ~~integral~~a ~~part~~Delaware limited liability company on February 18, 2000. The Company commenced operations on April 5, 2001. The duration of ~~these~~the ~~Financial~~Company ~~Statements~~is ten years (subject to two 2-year extensions) from the final subscription closing which occurred on May 11, 2001, at which time the affairs of the Company will be wound up and its assets distributed pro rata to members as soon as is practicable.

11As a BDC, the Company must be primarily engaged in the business of furnishing capital and making available managerial assistance to companies that generally do not have ready access to capital through conventional financial channels. The Company’s investment objective is to achieve long-term capital appreciation primarily by investing in domestic venture capital and other private companies and, to a lesser extent, domestic and international private funds, negotiated private investments in public companies and international direct investments that the Investment Adviser (as defined below) believes offer significant long-term capital appreciation potential. Venture capital and private investment companies are companies in which the equity is closely held by company founders, management and/or a limited number of institutional investors. The Company does not have the right to demand that such equity securities be registered.

~~Table~~Costs incurred in connection with the initial offering of ~~Contents~~units totaled $1,468,218. Each member’s pro rata share of these costs was deducted from his, her or its initial capital contribution.

The following is a summary of the Company’s significant accounting policies. Such ~~Excelsior~~policies ~~Venture~~are ~~Partners~~in ~~III,~~conformity ~~LLC~~with generally accepted accounting principles for investment companies and are consistently followed in the preparation of the financial statements. Generally accepted accounting principles in the United States require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates.

~~Statements~~The interim financial data as of ~~Cash~~July 31, ~~Flows~~2007 ~~(Unaudited)~~and for the three and nine months ended July 31, 2007 and July 31, 2006 is unaudited; however, in the opinion of the Company, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods.

	Six Months Ended April 30,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (decrease) in net assets resulting from operations	$	(692,994	)	$	(3,260,713	)
Adjustments to reconcile net increase/(decrease) in net assets from operations to net cash provided by/(used in) operating activities:
Net change in unrealized (appreciation)/depreciation on investments		(3,741,560	)		2,938,770
Purchase of investments		(4,508,490	)		(6,536,725	)
Proceeds received from the sale of investments and distributions received from private investment funds		14,577,254			505,822
Sale of short-term investments – Net		3,276,123			5,646,602
Net realized loss/(gain) on investments		4,109,593			(9,846	)
Decrease/(increase) in interest receivable		12,186			(113,551	)
(Increase)/decrease in sale of investment receivable		(4,604,587	)		419,679
(Increase) in prepaid insurance		(15,365	)		(17,634	)
(Decrease) in management fee payable		(28,056	)		(91,232	)
(Decrease) in professional fees payable		(10,735	)		(43,108	)
Increase/(decrease) in administration fees payable		23,678			(8,844	)
Increase in Board of Managers’ fees payable		22,000			1,254
Increase in other expenses payable		8,970			1,306
Net cash provided by/(used in) operating activities		8,428,017			(568,220	)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash Distributions to Unit holders		(8,265,880	)		—
Net (cash used) in financing activities		(8,265,880	)		—
Net increase/(decrease) in cash		162,137			(568,220	)
Cash and cash equivalents at beginning of period		2,934			574,146
Cash and cash equivalents at end of period	$	165,071		$	5,926

A. Cash and Cash Equivalents:

~~The~~Cash ~~accompanying~~and ~~notes~~cash equivalents consist of deposits with banks. All highly liquid investments are anlisted ~~integral~~separately ~~part~~on ofthe ~~these~~Portfolio ~~Financial~~of ~~Statements~~Investments.

12B. Restricted Cash:

~~Table~~Restricted cash, if any, consisted of ~~Contents~~proceeds from the sales of investments held by counterparties as collateral for certain contingent claims for a specified period of time.

~~Excelsior~~13 ~~Venture Partners III, LLC~~

~~Financial~~Note ~~Highlights~~1 — Organization and Significant Accounting Policies (~~Unaudited~~continued)

~~Per~~C. ~~Unit~~Investment ~~Operating Performance~~Valuation: ~~(1)~~

	Six Months Ended April 30,
	2007			2006
NET ASSET VALUE, BEGINNING OF PERIOD	$	255.96		$	316.21
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss		(1.10	)		(1.12	)
Net realized and unrealized (loss) on investments		(1.25	)		(9.92	)
Net (decrease) in net assets resulting from operations		(2.35	)		(11.04	)
FINANCING ACTIVITIES
Distribution to Members		(28.00	)		—
NET DECREASE IN NET ASSETS:		(30.35	)		(11.04	)
NET ASSET VALUE, END OF PERIOD	$	225.61		$	305.17
TOTAL NET ASSET VALUE RETURN (3), (4)		(0.92	)%		(3.49	)%
RATIOS AND SUPPLEMENTAL DATA (5)
Net assets, end of period (000’s)	$	66,603		$	90,088
Ratios to average net assets: (2)
Net expenses		1.96	%		2.42	%
Net investment loss		0.90	%		0.72	%
Portfolio Turnover Rate (3)		7.83	%		0.76	%

The Company values portfolio securities quarterly and at such other times as, in the Company’s Board of Managers’ (the “Board” or “Board of Managers” or “Managers”) view, circumstances warrant. Securities for which market quotations are readily available generally will be valued at the last sale price on the date of valuation or, if no sale occurred, at the mean of the latest bid and ask prices; provided that, as to such securities that may have legal, contractual or practical restrictions on transfer, a discount of 10% to 40% from the public market price will be applied. Securities for which no public market exists and other assets will be valued at fair value as determined in good faith by the Investment Adviser or a committee of the Board of Managers or both under the supervision of the Board of Managers pursuant to certain valuation procedures summarized below. Securities having remaining maturities of 60 days or less from the date of purchase are valued at amortized cost.

~~(1)~~The ~~Selected~~value ~~data~~for securities for which no public market exists is difficult to determine. Generally, such investments will be valued on a ~~unit~~“going concern” basis without giving effect to any disposition costs. There is a range of ~~membership~~values ~~interest~~that ~~outstanding~~is ~~through~~reasonable ~~each~~for ~~period~~such investments at any particular time. Initially, direct investments are valued based upon their original cost until developments provide a sufficient basis for use of a valuation other than cost. Upon the occurrence of developments providing a sufficient basis for a change in valuation, direct investments will be valued by the “private market” or “appraisal” methods of valuation. The private market method shall only be used with respect to reliable third party transactions by sophisticated, independent investors. The appraisal method shall be based upon such factors affecting the investee company such as earnings, net worth, reliable private sale prices of the investee company’s securities, the market prices for similar securities of comparable companies, an assessment of the investee company’s future prospects or, if appropriate, liquidation value. The values for the investments referred to in this paragraph will be estimated regularly by the Investment Adviser or a committee of the Board under the supervision of the Board of Managers and, in any event, not less frequently than quarterly. However, there can be no assurance that such value will represent the return that might ultimately be realized by the Company from the investments.

~~(2)~~The ~~Annualized~~valuation ~~for~~of ~~periods~~the Company’s Private Investment Funds is based upon its pro-rata share of the value of the net assets of the Private Investment Fund at fair value as determined by such Private Investment Fund, in accordance with its partnership agreement, constitutional or other documents governing such valuation, on the valuation date. If such valuation with respect to the Company’s investments in Private Investment Funds is not available by reason of timing or other event on the valuation date, or is deemed to be unreliable by the Investment Adviser, the Investment Adviser, under supervision of the Board of Managers, shall determine such value based on its judgment of fair value on the appropriate date, less ~~than~~applicable acharges, ~~year~~if any.

~~(3)~~At ~~Not~~July 31, ~~annualized~~2007 and October 31, 2006, market quotations were not readily available for ~~periods~~securities ~~less~~valued ~~than~~at $48,744,551 or 76.52% of net assets and $61,466,377 or 81.35% of net assets, respectively. Such securities were valued by the Investment Adviser, under the supervision of the Board of Managers. Because of the inherent uncertainty of valuation, the estimated values may differ significantly from the values that would have been used had a ~~year~~ready market for the securities existed, and the differences could be material.

(4) Total net asset value return based on per unit net asset value reflects the effects of changes in net asset value based on the performance of the Company during the period, and assumes dividends and distributions, if any, were reinvestedD. ~~The~~Security ~~Company’s~~transactions ~~units were issued in a private placement~~ and ~~are not publicly traded. Therefore, the value total~~ investment ~~return~~income: ~~is not presented.~~

~~(5)~~Security ~~Income~~transactions are recorded on a trade date basis. Realized gains and ~~expense~~losses ~~ratios~~on doinvestments ~~not~~sold ~~reflect~~are ~~the~~recorded ~~Company’s~~on ~~proportionate~~the ~~share~~basis of ~~net~~identified ~~investment~~cost. Interest income~~/(loss)~~, adjusted for amortization of premiums and ~~expenses,~~discounts ~~including~~on ~~any~~fixed ~~performance-based~~income ~~fees~~investments, ofis earned from settlement date and is recorded on the ~~Private~~accrual ~~Investment~~basis. ~~Funds~~Dividend income is recorded on the ex-dividend date.

~~The~~14 ~~accompanying notes are an integral part of these Financial Statements.~~

13Note 1 — Organization and Significant Accounting Policies (continued)

~~Table~~E. ofIncome ~~Contents~~taxes:

Under current law and based on certain assumptions and representations, the Company intends to be treated as a partnership for federal, state and local income tax purposes. By reason of this treatment, the Company will itself not be subject ~~EXCELSIOR~~to ~~VENTURE~~income ~~PARTNERS~~tax. ~~III~~Rather, ~~LLC~~each member, in computing income tax, will include his, her or its allocable share of Company items of income, gain, loss, deduction and expense. The cost of the Private Investment Funds for federal tax purposes is based on amounts reported to the Company on Schedule K-1 from the Private Investment Funds. As of July 31, 2007 and October 31, 2006, the Company had not received information to determine the tax cost of the Private Investment Funds as of those dates. The cost basis for federal tax purposes of the Company’s other investments at July 31, 2007 was $79,329,952, and those investments had net depreciation on a tax basis at July 31, 2007 of $34,758,577. The cost basis for federal tax purposes of the Company’s other investments at October 31, 2006 was $100,558,894 and those investments had net depreciation on a tax basis at October 31, 2006 of $38,794,561.

~~NOTES~~F. TODeferred ~~FINANCIAL~~income: ~~STATEMENTS (Unaudited)~~

~~April~~Deferred income represents gains on investments that are deferred until a subsequent period due to contingencies relating to the sale of an investment. As of July 31, 2007, there was approximately a gross $4.31 million of proceeds held in an escrow account relating to the Pilot Software transaction. These proceeds are subject to certain transfer restrictions and could be used to indemnify the buyer for contingent losses relating to the acquisition of Pilot Software. During the three months ended July 31, 2007, a potential claim of $0.30 million against the escrow account was filed with the escrow agent. Therefore, the Company has deferred income of $0.26 million, which is the Company’s share of the claim. This claim relates to a legal matter involving Pilot Software and the buyer. As such, it is subject to certain risks and is merely an estimate of the potential claim against the escrow account. The end result of the legal matter may result in a claim against the escrow account greater than the current accrual, not to exceed $4.31 million, or it may result in a claim amount smaller than $0.30 million estimated as of July 31, 2007.

Note 1 2 — ~~Organization~~ Investment Advisory Fee, Administration Fee and ~~Significant~~Related ~~Accounting~~Party ~~Policies~~Transactions

~~Excelsior~~UST ~~Venture Partners III~~Advisers, ~~LLC~~Inc. (~~the~~ “~~Company~~USTA”) iswhich ahas ~~non-diversified,~~its ~~closed-end~~principal ~~management~~offices ~~investment~~at ~~company~~225 ~~which~~High ~~has~~Ridge ~~elected~~Road, toStamford, beConnecticut ~~treated~~06905, asis a ~~business~~Delaware ~~development~~corporation ~~company~~and registered orinvestment ~~“BDC”~~adviser ~~under~~ (the “Investment ~~Company~~Adviser”). ~~Act~~Since ofJuly 1, ~~1940~~2007, asthe ~~amended.~~Investment ~~The~~Adviser ~~Company~~is ~~was established~~an asindirect awholly-owned ~~Delaware~~subsidiary, ~~limited~~and ~~liability~~controlled ~~company on February 18~~by, ~~2000.~~Bank ~~The~~of ~~Company~~America ~~commenced~~Corporation ~~operations~~(“Bank onof ~~April 5~~America”), ~~2001.~~a ~~The~~bank ~~duration~~holding and ofa ~~the~~financial ~~Company~~holding iscompany ~~ten~~which ~~years~~has ~~(subject~~its toprincipal ~~two~~executive ~~2-year~~offices ~~extensions)~~at ~~from~~101 ~~the~~North ~~final~~Tryon ~~subscription~~Street, ~~closing which~~Charlotte, ~~occurred~~North onCarolina ~~May~~28255. Prior to July 111, ~~2001~~2007, atthe ~~which~~Investment ~~time~~Adviser ~~the~~was ~~affairs~~an indirect subsidiary of ~~the~~U.S. ~~Company~~Trust ~~will~~Corporation be(“U.S. Trust”), ~~wound~~a upregistered ~~and~~financial ~~its~~holding ~~assets~~company, ~~distributed~~which, ~~pro~~in ~~rata~~turn, towas ~~members~~a aswholly-owned ~~soon~~subsidiary asof isThe ~~practicable~~Charles Schwab Corporation (“Schwab”).

AsPrior ato ~~BDC~~December 16, ~~the~~2005, Company must be primarily engaged in the business of furnishing capital and making available managerial assistance to companies that generally do not have ready access to capital through conventional financial channelsU.S. ~~The~~Trust Company’s, ~~investment~~N.A. ~~objective is to achieve long~~(“UST-~~term~~NA”), ~~capital~~on ~~appreciation~~behalf ~~primarily~~of byits ~~investing~~Asset inManagement ~~domestic~~Division ~~venture~~served ~~capital~~as ~~and~~the ~~other~~investment ~~private~~adviser ~~companies and,~~ to athe ~~lesser~~Company ~~extent, domestic and international private funds, negotiated private investments in public companies and international direct investments that~~ (the “former Investment Adviser ~~(as defined below~~”) ~~believes offer significant long-term capital appreciation potential. Venture capital~~ ~~and~~pursuant ~~private~~to ~~investment~~an ~~companies~~Investment ~~are~~Advisory ~~companies~~Agreement ~~in which~~ (the ~~equity~~“Agreement”). isEffective ~~closely~~December 16, ~~held by company founders~~2005, ~~management~~USTA ~~and/or~~assumed athe ~~limited~~duties ~~number~~ of ~~institutional investors. The Company does not have~~ the ~~right~~former toInvestment ~~demand that such equity securities be registered~~Adviser.

~~Costs~~Under ~~incurred~~the inAgreement ~~connection~~for ~~with~~the services provided, the ~~initial~~Investment ~~offering~~Adviser was entitled to receive a management fee at an annual rate equal to 2.00% of ~~units~~the ~~totaled~~Company’s $1end of the quarter net assets through the fifth anniversary of the first closing date of April 5,~~468~~ 2001,~~218~~ and 1.00% ~~Each~~of ~~member’s~~net ~~pro~~assets thereafter. Prior to December 16, 2005 and pursuant to a sub-advisory agreement (the “Sub-Advisory Agreement”) among the Company, the former ~~rata~~Investment ~~share~~Adviser, and United States Trust Company of ~~these~~New ~~costs~~York ~~was~~(“U.S. ~~deducted~~Trust NY”), U.S. Trust NY served as the investment sub-adviser (the “Investment Sub-Adviser”) to the Company and received an investment management fee from the ~~his~~former Investment Adviser and Investment Adviser. As of July 31, ~~her~~2007 orand ~~its~~October 31, ~~initial~~2006, ~~capital~~$160,975 ~~contribution~~and $190,458 were incurred and payable to the Investment Adviser and former Investment Adviser, respectively.

~~The~~15 following is a summary of the Company’s significant accounting policies. Such policies are in conformity with generally accepted accounting principles for investment companies and are consistently followed in the preparation of the financial statements. Generally accepted accounting principles in the United States require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates.

~~The~~Note ~~interim~~2 ~~financial~~— ~~data~~Investment asAdvisory ~~of April 30~~Fee, ~~2007~~Administration ~~and~~Fee ~~for the three~~ and ~~six~~Related ~~months~~Party ~~ended~~Transactions ~~April 30,~~(continued) 2007 and April 30, 2006 is unaudited; however, in the opinion of the Company, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods.

APrior to March 31, 2006, USTA was a wholly owned subsidiary of UST-NA and UST-NA and U.S. ~~Cash~~Trust NY were wholly-owned subsidiaries of U.S. Trust. Effective March 31, 2006, U.S. Trust NY converted into a national bank named United States Trust Company, National Association (USTC-NA) and ~~Cash~~UST-NA ~~Equivalents:~~merged into USTC-NA. USTC-NA was the surviving entity and remained a wholly-owned subsidiary of U.S. Trust.

~~Cash~~On July 1, 2007, U.S. Trust and ~~cash~~its ~~equivalents~~subsidiaries, ~~consist~~including USTA, was acquired by Bank of ~~deposits~~America ~~with~~(the ~~bank~~“Sale”). USTA ~~and~~continued ~~highly~~to ~~liquid~~serve ~~investments~~as the Investment Adviser to the Company after the Sale pursuant to a new investment advisory agreement with ~~original~~the ~~maturities~~Company (the “New Advisory Agreement”) that was approved at a special meeting of 90members ~~days~~of orthe Company ~~less~~held on March 15, 2007. The New Advisory Agreement is identical in all material respects except for the term and the date of effectiveness to the Agreement. U.S. Trust N.Y. ceased to serve as the Investment Sub-Adviser to the Company after the Sale.

BIn addition to the management fee, the Investment Adviser is entitled to allocations and distributions equal to the Incentive Carried Interest. The Incentive Carried Interest is an amount equal to 20% of the excess, if any, of the Company’s cumulative realized capital gains on Direct Investments, over the sum of (a) cumulative realized capital losses on investments of any type (b) cumulative gross unrealized capital depreciation on investments of any type (c) cumulative net expenses. Direct Investments means Company investments in domestic and foreign companies in which the equity is closely held by company founders, management, and/or a limited number of institutional investors and negotiated private investments in public companies. As of July 31, 2007 and October 31, 2006, there was no Incentive Carried Interest earned by the Investment ~~Valuation:~~Adviser.

~~The~~Pursuant ~~Company~~to ~~values~~an ~~portfolio securities~~Administration, ~~quarterly~~Accounting and atInvestor ~~such~~Services ~~other times as~~Agreement, in the Company’s ~~Board~~retains ofPFPC ~~Managers’~~ Inc. (~~the~~ “~~Board~~PFPC” ~~or “Board of Managers” or “Managers”~~) ~~view~~, ~~circumstances~~a ~~warrant.~~majority-owned ~~Securities~~subsidiary ~~for~~of ~~which~~The ~~market~~PNC ~~quotations~~Financial ~~are readily~~Services ~~available generally will be valued at the last sale price on the date of valuation or~~Group, ifas ~~no sale occurred~~administrator, ataccounting ~~the~~and ~~mean~~investor ofservices ~~the~~agent. ~~latest~~In ~~bid~~addition, ~~and~~PFPC ~~ask~~Trust ~~prices;~~Company ~~provided~~serves ~~that,~~ as tothe ~~such~~Company’s ~~securities~~custodian. ~~that~~In ~~may~~consideration ~~have~~for ~~legal,~~its ~~contractual or practical~~services, ~~restrictions~~the onCompany ~~transfer,~~(i) pays PFPC a ~~discount~~variable offee ~~10%~~between ~~to 40~~0.105% ~~from~~and ~~the public market price will be applied~~0.07%, ~~Securities~~based ~~for~~on ~~which~~average noquarterly ~~public~~net ~~market exists and other~~ assets, ~~will~~payable bemonthly, ~~valued~~subject atto ~~fair value as determined in good faith by the Investment Adviser or~~ a ~~committee~~ ofminimum ~~the~~quarterly ~~Board~~fee of ~~Managers~~approximately or$30,000, ~~both~~(ii) pays ~~under~~annual ~~the~~fees ~~supervision~~ of ~~the~~approximately ~~Board~~$36,667 offor taxation ~~Managers~~services ~~pursuant~~and to(iii) reimburses ~~certain~~PFPC ~~valuation~~for ~~procedures summarized below. Securities having remaining maturities~~ out-of-pocket ~~60 days or less from the date of purchase are valued at amortized cost~~expenses.

14Charles Schwab & Co., Inc. (the “Distributor”), the principal subsidiary of Schwab, serves as the Company’s distributor for the offering of units. The Investment Adviser paid the Distributor from its own assets an amount equal to 0.02% of the total of all subscriptions received in the offering. The Investment Adviser or an affiliate will pay the Distributor an on-going fee for the sale of units and the provision of ongoing investor services in an amount equal to the annual rate of 0.45% of the average quarterly net asset value of all outstanding units held by investors introduced to the Company by the Distributor through the fifth anniversary of the final subscription closing date and at the annual rate of 0.22% thereafter, subject to elimination upon all such fees totaling 6.5% of the gross proceeds received by the Company from the offering.

~~Table~~Each member of ~~Contents~~the Board of Managers receives a $10,000 annual retainer and the Chairman of the Board receives an additional $1,000 annual retainer. Also, each member of the Board will receive $2,000 per quarterly meeting attended. In addition, each Board member will receive $500 per quarterly telephonic meeting and $500 for any telephonic special meeting. For each audit committee meeting attended, Board members will receive $1,500, while the Chairman of the Audit Committee will receive an additional $1,000 retainer. Each member of the Board is reimbursed for expenses incurred for attending meetings. No person who is an officer, manager or employee of Bank of America, or its subsidiaries, who serves as an officer, manager or employee of the Company receives any compensation from the Company.

B.As of July ~~Investment~~31, ~~Valuation~~2007 ~~(continued)~~and October 31, 2006, Excelsior Venture Investors III, LLC, a non-diversified, closed –end feeder fund to the company, had an investment in the Company of $40,439,279 and $47,969,297, respectively. This represents an ownership interest of 63.48% in the Company as of both dates.

~~The~~16 value for securities for which no public market exists is difficult to determine. Generally, such investments will be valued on a “going concern” basis without giving effect to any disposition costs. There is a range of values that is reasonable for such investments at any particular time. Initially, direct investments are valued based upon their original cost until developments provide a sufficient basis for use of a valuation other than cost. Upon the occurrence of developments providing a sufficient basis for a change in valuation, direct investments will be valued by the “private market” or “appraisal” methods of valuation. The private market method shall only be used with respect to reliable third party transactions by sophisticated, independent investors. The appraisal method shall be based upon such factors affecting the investee company such as earnings, net worth, reliable private sale prices of the investee company’s securities, the market prices for similar securities of comparable companies, an assessment of the investee company’s future prospects or, if appropriate, liquidation value. The values for the investments referred to in this paragraph will be estimated regularly by the Investment Adviser or a committee of the Board under the supervision of the Board of Managers and, in any event, not less frequently than quarterly. However, there can be no assurance that such value will represent the return that might ultimately be realized by the Company from the investments.

~~The~~Note ~~valuation~~2 of— ~~the Company’s Private~~ Investment ~~Funds~~Advisory ~~is based upon its pro-rata share of the value of the net assets of the Private Investment Fund at fair value as determined by such Private Investment Fund~~Fee, inAdministration ~~accordance~~Fee ~~with~~and ~~its~~Related ~~partnership~~Party ~~agreement,~~Transactions ~~constitutional~~(continued) or other documents governing such valuation, on the valuation date. If such valuation with respect to the Company’s investments in Private Investment Funds is not available by reason of timing or other event on the valuation date, or is deemed to be unreliable by the Investment Adviser, the Investment Adviser, under supervision of the Board of Managers, shall determine such value based on its judgment of fair value on the appropriate date, less applicable charges, if any.

AtOn ~~April~~December 3016, ~~2007~~2004, Schwab entered into an agreement with the Company and ~~October 31,~~other ~~2006,~~funds ~~market~~managed ~~quotations~~by ~~were~~the ~~not~~former ~~readily~~Investment ~~available~~Adviser ~~for~~whereby ~~securities~~Schwab has ~~valued~~funded ata ~~$51,029,580~~reserve account to be held by the Investment Adviser or 76its affiliate.~~62%~~ ofThis ~~net~~reserve ~~assets~~account was established so that the Company and ~~$61~~other funds managed by the Investment Adviser will be able to draw upon it to pay in full all costs incurred related to the termination of Ernst & Young LLP (“E&Y”),~~466~~ the Company’s independent public accountants prior to October 28,~~377~~ or2004, ~~81.35%~~as a result of ~~net~~concerns regarding their independence at the time of issuance ~~assets~~of their report on the Company’s October 31, ~~respectively~~2003 financial statements. ~~Such~~This ~~securities~~agreement ~~were~~was ~~valued~~executed in order to ensure that these costs related to the termination of E&Y are not borne by the Company, the other funds managed by the Investment Adviser, ~~under~~or ~~the~~their ~~supervision~~respective shareholders. Schwab is an affiliate of the ~~Board~~Company’s ofInvestment ~~Managers~~Adviser. ~~Because~~In consideration of the ~~inherent~~funding ~~uncertainty~~ of ~~valuation~~the reserve account, the ~~estimated~~Company ~~values~~and ~~may~~the ~~differ~~other ~~significantly~~funds ~~from~~managed by the ~~values~~Investment ~~that would~~Adviser ~~have~~subrogated ~~been~~all ~~used~~of ~~had~~their aclaims, ~~ready~~causes ~~market~~of ~~for~~action ~~the~~and ~~securities~~rights ~~existed,~~against ~~and~~E&Y ~~the~~for ~~differences~~payment ~~could~~of bethese ~~material~~expenses to Schwab.

~~C. Security~~Note ~~transactions~~3 — Purchases and Sales ~~investment~~of ~~income:~~Securities

~~Security~~Excluding ~~transactions~~short-term ~~are~~investments, ~~recorded~~the onCompany’s apurchases ~~trade date basis. Realized gains~~ and ~~losses on~~sales ~~investments~~of ~~sold~~securities ~~are~~for ~~recorded on~~ the ~~basis~~nine ofmonths ~~identified~~ended July 31, ~~cost. Interest income~~2007, ~~adjusted for amortization of premiums~~ and ~~discounts on fixed income investments~~July 31, is2006 ~~earned~~were ~~from~~as ~~settlement~~follows: ~~date and is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date.~~

D. Income taxes:


Nine Month Ended July 31,	Purchases ($)	Proceeds ($)
2007	5,507,172	14,976,791
2006	13,712,456	2,202,944

~~Under~~Note ~~current~~4 ~~law~~— ~~and~~Commitments based on certain assumptions and representations, the Company intends to be treated as a partnership for federal, state and local income tax purposes. By reason of this treatment, the Company will itself not be subject to income tax. Rather, each member, in computing income tax, will include his, her or its allocable share of Company items of income, gain, loss, deduction and expense.

~~The cost of the Private Investment Funds for federal tax purposes is based on amounts reported to the Company on Schedule K-1 from the Private Investment Funds.~~ As of ~~April~~July ~~30, 2007 and October~~ 31, 2006, the Company had not received information to determine the tax cost of the Private Investment Funds as of those dates. The cost basis for federal tax purposes of the Company’s other investments at April 30, 2007 ~~was $79~~,~~601,585,~~ ~~and those investments had net depreciation on a tax basis at April 30, 2007 of $32,252,121. The cost basis for federal tax purposes of~~ the Company’s ~~other investments at October 31, 2006 was $100,558,894 and those investments~~ had ~~net~~outstanding ~~depreciation~~investment oncommitments atotaling ~~tax basis at October 31, 2006 of~~ $387,~~794~~006,~~561~~904.

15[This is intentionally blank]

~~Table~~17 ~~of Contents~~

Note 2 5 — ~~Investment~~ ~~Advisory~~Transactions ~~Fee,~~with ~~Administration~~Affiliated ~~Fee~~Companies ~~and Related Party Transactions~~

~~UST~~An ~~Advisers,~~affiliated ~~Inc.~~company ~~(“USTA”) which has its principal offices at 225 High Ridge Road, Stamford, Connecticut 06905,~~ is a ~~Delaware~~company ~~corporation~~in ~~and~~which ~~registered investment adviser (~~the ~~“Investment~~Company ~~Adviser”).~~has ~~The~~ownership ~~Investment Adviser is a wholly-owned subsidiary~~ of ~~United~~more ~~States~~than ~~Trust~~5% ~~Company, National Association (“USTC-NA”). USTC-NA is a wholly-owned subsidiary~~ of ~~U.S.~~the ~~Trust~~voting ~~Corporation (“U~~securities.S. ~~Trust”),~~The aCompany ~~registered~~did ~~financial~~not ~~holding~~receive ~~company,~~dividends ~~which~~from affiliated ~~has~~companies ~~its~~during ~~principal~~the ~~offices~~nine atmonths ~~114~~ended ~~West 47th Street~~July 31, ~~New~~2007 ~~York, New York 10036-1532,~~ and ~~which~~the ~~is,~~year inended ~~turn~~October 31, a2006. ~~wholly-owned~~Transactions ~~subsidiary~~with ~~of The Charles Schwab Corporation (“Schwab”)~~companies, which ~~has~~are ~~its principal~~or ~~offices~~were ~~at 120 Kearney Street~~affiliates, ~~San~~were ~~Francisco,~~as ~~California~~follows: ~~94108.~~

Prior to December 16, 2005, U.S. Trust Company, N.A., on behalf of its Asset Management Division served as the investment adviser to the Company (the “former Investment Adviser”) pursuant to an Investment Advisory Agreement (the “Agreement”). Effective December 16, 2005, USTA assumed the duties of the former Investment Adviser.


						For the Nine Months Ended July 31, 2007 (Unaudited)
Name of Investment	Shares/Principal Amount Held at October 31, 2006	October 31, 2006 Value		Purchases/Con version Acquisition		Sales Proceeds/ Conversion			Interest Received		Realized Gain/(Loss)			Shares/Principal Amount Held at July 31, 2007		July 31, 2007 Value (Note 1)
Controlled Affiliates
Pilot Software Inc., Series A Preferred	46,362,656	$	8,110,096	$	—	$	11,450,000		$	—	$	2,684,952		$	—	$	—
Pilot Software Inc., Bridge Note, 9%	1,404,600		1,404,600		—		1,357,489			—		349,032			—		—
Cydelity Inc. Series A Preferred	19,995,000		—		—		—			—		—			19,995,000		—
Cydelity Inc. Series A-1 Preferred	19,702,277		3,940,456		—		—			—		—			19,702,277		—
Cydelity Inc. Series A-2 Preferred	25,535,051		2,500,009		—		—			—		—			25,535,051		982,000
Cydelity Inc., Common Stock	1,000,000		—		—		—			—		—			1,000,000		—

Total Controlled Affiliates		$	15,955,161	$	—	$	12,807,489		$	—	$	3,033,984				$	982,000
Non-Controlled Affiliates
Chips & Systems, Inc., Series A Preferred	7,000,000		—		—		—			—		—			7,000,000		—
Chips & Systems, Inc. Bridge Note	1,441,133		—		—		—			—		—			1,441,133		—
Ethertronics, Inc., Series B Preferred	4,433,333		6,650,000		—		—			—		—			4,433,333		6,650,000
Ethertronics, Inc., Series B Warrants	281,667		—		—		—			—		—			281,667		—
Ethertronics, Inc., Series C Warrants	214,073		—		—		—			—		—			214,073		—
Ethertronics, Inc., Series C Preferred	1,316,793		1,975,190		571,746		—			—		—			1,697,957		2,546,936
Genoptix, Inc., Series 1-A Preferred	942,481		950,822		—		—			—		—			942,481		1,471,285
Genoptix, Inc., Series 1-B Preferred	1,403,696		950,822		—		—			—		—			1,403,696		1,576,424
Genoptix, Inc., Common Stock	46,860		—		—		—			—		—			46,860		10,768
Genoptix, Inc., Series 1-C Preferred	620,580		554,178		—		—			—		—			620,580		696,778
Genoptix, Inc., Series 1-D Preferred	728,413		461,815		—		—			—		—			728,413		631,446
LightConnect, Inc., Series C Preferred	—		—		—		—			—		168,484			—		—
LogicLibrary, Inc., Series A Preferred	7,762,821		3,549,296		311,351		—			—		—			8,443,815		3,860,646
LogicLibrary, Inc., Series A-1 Preferred	3,080,464		1,408,450		—		—			—		—			3,080,464		1,408,450
MIDAS Vision Systems, Inc., Series A-1 Preferred	933,593		—		—		—			—		—			—		—
MIDAS Vision Systems, Inc., Common Stock	157,396		—		—		—			—		—			—		—
NanoOpto Corp., Series A-1 Preferred	956,234		840,912		—		—			—		—			—		—
NanoOpto Corp., Series B Preferred	3,023,399		1,286,155		—		—			—		—			—		—
NanoOpto Corp., Series C Preferred	1,682,470		733,389		—		—			—		—			—		—
NanoOpto Corp., Series C Warrants	229,410		—		—		—			—		—			—		—
NanoOpto Corp., Series D Preferred	1,234,263		382,622		—		—			—		—			—		—
NanoOpto Corp., Bridge Note	—		—		237,321		—			—		—			—		160,000
OpVista, Inc., Series AA Preferred	5,089,790		5,367,967		526,227		—			—		—			—		6,742,193
OpVista, Inc., Common Stock	1,079,541		1,138,542		—		—			—		—			—		1,280,541
OpVista, Inc., Series BB Convertible Preferred	—		—		491,800		—			—		—			—		514,094
Silverback Systems, Inc., Common	40,026		—		—		—			—		(4,759,081	)		—		—
Silverback Systems, Inc., Series B	559,993		1,600,000		—		749,976			—		(750,805	)		—		—
Silverback Systems, Inc., Series A-2 Preferred	772,503		—		—		—			—		(2,070,310	)		—		—
Tensys Medical, Inc., Series E Preferred	—		—		—		111,056			—		—			96,629		333,166
Tensys Medical, Inc., Series C Preferred	4,166,667		1,887,160		—		—			—		—			4,166,667		534,354
Tensys Medical, Inc., Series D Preferred	1,187,500		537,840		—		—			—		—			1,187,500		152,291
Tensys Medical, Inc., Bridge Note	52,017		52,017		59,039		(111,056	)		—		—			—		—

Total Non -Controlled Affiliates		$	30,327,177	$	2,197,484	$	749,976		$	—	$	(7,411,712	)			$	28,569,372

~~Under~~18 the Agreement for the services provided, the Investment Adviser is entitled to receive a management fee at an annual rate equal to 2.00% of the Company’s end of the quarter net assets through the fifth anniversary of the first closing date of April 5, 2001, and 1.00% of net assets thereafter. Prior to December 16, 2005 and pursuant to a sub-advisory agreement (the “Sub-Advisory Agreement”) among the Company, the former Investment Adviser, and United States Trust Company of New York (“U.S. Trust NY”), U.S. Trust NY served as the investment sub-adviser (the “Investment Sub-Adviser”) to the Company and received an investment management fee from the former Investment Adviser and Investment Adviser. As of April 30, 2007 and October 31, 2006, $162,402 and $190,458 were incurred and payable to the Investment Adviser and former Investment Adviser, respectively.

Prior to March 31, 2006, USTA was a wholly owned subsidiary of U.S. Trust Company, N.A. (“UST-NA”) and UST-NA and U.S. Trust NY were wholly-owned subsidiaries of U.S. Trust. Effective March 31, 2006, U.S. Trust NY converted into a national bank named United States Trust Company, National Association (USTC-NA) and UST-NA merged into USTC-NA. USTC-NA is the surviving entity and remains a wholly-owned subsidiary of U.S. Trust.


						For the Year Ended October 31, 2006
Name of Investment	Shares/Principal Amount Held at October 31, 2005	October 31, 2005 Value		Purchases/Con version Acquisitions		Sale/Conversion Proceeds			Interest Received		Realized Gain/ (Loss)			Shares/Principal Amount Held at October 31, 2006	October 31, 2006 Value (Note 1)
Controlled Affiliates
Pilot Software Inc., Series A Preferred	46,362,656	$	8,110,096	$	—	$	—		$	—	$	—		46,362,656	$	8,110,096
Pilot Software Inc., Bridge Note, 9%	—		—		1,404,600		—			—		—		1,404,600		1,404,600
LogicLibrary, Inc., Series A Preferred	6,530,581		2,985,916		563,380		—			—		—		7,762,821		3,549,296
LogicLibrary, Inc., Series A-1 Preferred	3,080,464		1,408,450		—		—			—		—		3,080,464		1,408,450
Cydelity Inc. Series A Preferred	19,995,000		—		—		—			—		—		19,995,000		—
Cydelity Inc. Series A-1 Preferred	—		—		3,940,456		—			—		—		19,702,277		3,940,456
Cydelity Inc. Series A-2 Preferred	—		—		2,500,009		—			—		—		25,535,051		2,500,009
Cydelity Inc. Common Stock	1,000,000		—		—		—			—		—		1,000,000		—
Cydelity Inc. Series A Warrants	7,500,000		—		—		—			—		—		—		—
Cydelity Inc., Bridge Note, 8%	3,000,000		3,000,000		700,000		(3,700,000	)		—		—		—		—

Total Controlled Affiliates		$	15,504,462	$	9,108,445	$	(3,700,000	)	$	—	$	—			$	20,912,907
Non-Controlled Affiliates
Chips & Systems, Inc., Series A Preferred	7,000,000		—		—		—			—		—		7,000,000		—
Chips & Systems, Inc. Bridge Note	1,441,133		—		—		—			—		—		1,441,133		—
Ethertronics, Inc., Series B Preferred	4,433,333		6,650,000		—		—			—		—		4,433,333		6,650,000
Ethertronics, Inc., Series B Warrants	281,667		—		—		—			—		—		281,667		—
Ethertronics, Inc., Series C Warrants	163,580		—		—		—			—		—		214,073		—
Ethertronics, Inc., Bridge Note	—		—		500,000		(500,000	)		—		—		—		—
Ethertronics, Inc., Series C Preferred	980,172		1,470,258		504,932		—			—		—		1,316,793		1,975,190
Genoptix, Inc., Series 1-A Preferred	942,481		950,822		—		—			—		—		942,481		950,822
Genoptix, Inc., Series 1-B Preferred	1,403,696		950,822		—		—			—		—		1,403,696		950,822
Genoptix, Inc., Common Stock	46,860		—		—		—			—		—		46,860		—
Genoptix, Inc., Series 1-C Preferred	620,580		554,178		—		—			—		—		620,580		554,178
Genoptix, Inc., Series 1-D Preferred	728,413		461,815		—		—			—		—		728,413		461,815
LightConnect, Inc., Series B Preferred	4,330,504		5,000,000		—		(5,000,000	)		—		(3,771,140	)	—		—
LightConnect, Inc., Series C Preferred	12,292,441		992,000		—		(992,000	)		—		(748,194	)	—		—
MIDAS Vision Systems, Inc., Series A- 1 Preferred	933,593		—		—		—			—		—		933,593		—
MIDAS Vision Systems, Inc., Common Stock	157,396		—		—		—			—		—		157,396		—
NanoOpto Corp., Series A-1 Preferred	956,234		1,116,350		—		—			—		—		956,234		840,912
NanoOpto Corp., Series B Preferred	3,023,399		1,286,155		—		—			—		—		3,023,399		1,286,155
NanoOpto Corp., Series C Preferred	1,682,470		733,389		—		—			—		—		1,682,470		733,389
NanoOpto Corp., Series C Warrants	229,410		—		—		—			—		—		229,410		—
NanoOpto Corp., Series D Preferred	—		—		382,622		—			—		—		1,234,263		382,622
OpVista, Inc., Series AA Preferred	—		—		4,508,179		—			—		—		5,089,790		5,367,967
OpVista, Inc., Series B Preferred	5,333,333		—		—		(4,000,000	)		—		—		—		—
OpVista, Inc., Series C Preferred	12,671,059		5,000,000		—		(2,500,000	)		—		—		—		—
OpVista, Inc., Series D Preferred	10,368,483		1,058,000		1,058,000		(1,058,000	)		—		—		—		—
OpVista, Inc., Series E Preferred	15,935,224		1,626,030		1,626,030		(1,626,031	)		—		—		—		—
OpVista, Inc., Common Stock	—		—		9,184,031		—			—		—		1,079,541		1,138,542
OpVista, Inc. 8% Bridge Note	—		—		1,727,599		(1,727,599	)		—		—		—		—
OpVista, Inc., Warrants	—		—		8,681		(8,681	)		—		(8,681	)	—		—
Silverback Systems, Inc., Common	—		—		4,759,081		—			—		—		40,026		—
Silverback Systems, Inc., Series B	—		—		1,500,781		—			—		—		559,993		1,600,000
Silverback Systems, Inc., Series A-2 Preferred	—		—		2,070,310		—			—		—		772,503		—
Silverback Systems, Inc., Series B-1 Preferred	2,211,898		1,415,615		—		(1,415,615	)		—		—		—		—
Silverback Systems, Inc., Series C Preferred	34,364,257		3,333,333		—		(3,343,467	)		—		—		—		—
Silverback Systems, Inc., 5% Bridge Notes	1,969,206		1,969,206		300,000		(2,269,206	)		—		—		—		—
Silverback Systems, Inc., Series C Warrant	4,173,033		196		—		(196	)		—		(195	)	—		—
Tensys Medical, Inc., Bridge Note	—		—		52,017		—			—		—		52,017		52,017
Tensys Medical, Inc., Series C Preferred	4,166,667		1,887,160		—		—			—		—		4,166,667		1,887,160
Tensys Medical, Inc., Series D Preferred	1,187,500		537,840		—		—			—		—		1,187,500		537,840

Total Non -Controlled Affiliates		$	36,993,169	$	28,182,263	$	(24,440,795	)	$	—	$	(4,528,210	)		$	25,369,431

In19 addition to the management fee, the Investment Adviser is entitled to allocations and distributions equal to the Incentive Carried Interest. The Incentive Carried Interest is an amount equal to 20% of the excess, if any, of the Company’s cumulative realized capital gains on Direct Investments, over the sum of (a) cumulative realized capital losses on investments of any type (b) cumulative gross unrealized capital depreciation on investments of any type (c) cumulative net expenses. Direct Investments means Company investments in domestic and foreign companies in which the equity is closely held by company founders, management, and/or a limited number of institutional investors and negotiated private investments in public companies. As of April 30, 2007 and October 31, 2006, there was no Incentive Carried Interest earned by the Investment Adviser.

~~Pursuant~~Note to6 an— ~~Administration,~~Pending ~~Accounting~~Litigation and Investor Services Agreement, the Company retains PFPC Inc. (“PFPC”), a majority-owned subsidiary of The PNC Financial Services Group, as administrator, accounting and investor services agent. In addition, PFPC Trust Company serves as the Company’s custodian. In consideration for its services, the Company (i) pays PFPC a variable fee between 0.105% and 0.07%, based on average quarterly net assets, payable monthly, subject to a minimum quarterly fee of approximately $30,000, (ii) pays annual fees of approximately $36,667 for taxation services and (iii) reimburses PFPC for out-of-pocket expenses.

~~Charles~~The ~~Schwab &~~former ~~Co., Inc.~~Investment ~~(the “Distributor”)~~Adviser, ~~the~~certain ~~principal subsidiary~~ of ~~Schwab~~its affiliates, ~~serves~~including ~~as the Company’s distributor for the offering of units~~U.S. ~~The~~Trust, ~~Investment~~and ~~Adviser~~others ~~paid~~were ~~the~~named ~~Distributor~~in ~~from~~four ~~its~~shareholder ~~own~~class ~~assets~~action anlawsuits ~~amount~~and ~~equal~~two toderivative ~~0.02%~~actions ofwhich ~~the~~allege ~~total~~that ~~of all subscriptions received in~~ the ~~offering.~~former ~~The~~ Managing Investment Adviser, orcertain anof ~~affiliate~~its ~~will~~affiliates ~~pay~~and ~~the~~others ~~Distributor~~allowed ancertain ~~on-going~~parties ~~fee~~to ~~for~~engage ~~the~~in ~~sale~~illegal ~~of units~~ and ~~the~~improper ~~provision~~mutual offund ~~ongoing~~trading ~~investor~~practices, ~~services~~which inallegedly ancaused ~~amount~~financial ~~equal~~injury to the ~~annual~~shareholders ~~rate~~ of ~~0.45%~~certain ofmutual ~~the average~~funds ~~quarterly~~managed ~~net asset value of all outstanding units held~~ by ~~investors introduced to~~ the ~~Company by the Distributor through the fifth anniversary of the final subscription closing date and at the annual rate of 0.22% thereafter, subject to~~ ~~elimination~~former ~~upon~~Investment ~~all such fees totaling 6~~Adviser.5% ofEach ~~the~~seeks ~~gross~~unspecified ~~proceeds~~monetary ~~received~~damages byand ~~the~~related ~~Company~~equitable ~~from the offering~~relief.

~~Each~~The ~~member~~class and derivative actions ofdescribed above were transferred to the ~~Board~~United ofStates ~~Managers~~District ~~receives~~Court afor ~~$10,000~~the ~~annual~~District ~~retainer~~of Maryland for coordinated and consolidated pre-trial proceedings. In November 2005, the ~~Chairman~~Maryland court dismissed many of the ~~Board~~plaintiffs’ ~~receives~~claims anin ~~additional~~both ~~$1,000~~the class ~~annual~~action ~~retainer.~~and ~~Also,~~derivative ~~each~~lawsuits. ~~member~~Several affiliates of the ~~Board~~former ~~will~~Investment ~~receive~~Adviser ~~$2,000~~and ~~per~~individual ~~quarterly~~defendants ~~meeting~~have ~~attended~~also been dismissed. InPlaintiffs’ ~~addition~~claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, ~~each~~as ~~Board~~amended, ~~member~~and ~~will~~under ~~receive~~Section 36(b) ~~$500~~and ~~per~~48(a) ~~quarterly~~of ~~telephonic~~the ~~meeting~~1940 ~~and~~Act, ~~$500~~however, ~~for~~have ~~any~~not ~~telephonic~~been ~~special~~dismissed.

16While the ultimate outcome of these matters cannot be predicted with any certainty at this time, based on currently available information and consultation with counsel, the Investment Adviser believes that the likelihood is remote that the pending litigation will materially affect the Investment Adviser’s ability to provide investment management services to the Company. Neither the Investment Adviser nor the Company is a party to the lawsuits described above.

~~Table~~Note of7 ~~Contents~~— Guarantees

~~Note~~In ~~2 — Investment~~the ~~Advisory~~normal ~~Fee~~course of business, ~~Administration~~the ~~Fee~~Company enters into contracts that provide general indemnifications. The Company’s maximum exposure under these agreements is dependent on future claims that may be made against the Company, and ~~Related~~therefore ~~Party~~cannot ~~Transactions~~be ~~(continued)~~established; however, based on experience, the risk of loss from such claims is considered remote.

~~meeting.~~Note ~~For~~8 ~~each~~— ~~audit~~New ~~committee~~Accounting ~~meeting~~Pronouncements attended, Board members will receive $1,500, while the Chairman of the Audit Committee will receive an additional $1,000 retainer. Each member of the Board is reimbursed for expenses incurred for attending meetings. No person who is an officer, manager or employee of U.S. Trust, or its subsidiaries, who serves as an officer, manager or employee of the Company receives any compensation from the Company.

AsThe ofFinancial ~~April 30,~~Accounting ~~2007~~Standards ~~and~~Board ~~October 31,~~(FASB) issued Interpretation 48 in July 2006, Accounting for Uncertainty in Income Taxes – an interpretation ~~Excelsior~~of ~~Venture~~FASB ~~Investors~~Statement ~~III,~~109 ~~LLC,~~(FIN a48). ~~non-diversified,~~FIN ~~closed~~48 ~~–end~~clarifies ~~feeder~~the ~~fund~~accounting tofor income taxes by prescribing the ~~company,~~minimum ~~had~~recognition anthreshold ~~investment~~a tax position must meet before being recognized in the ~~Company~~financial ofstatements. ~~$42,281,909~~FIN ~~and~~48 ~~$47~~is effective for fiscal years beginning after December 15,~~969,297,~~ ~~respectively~~2006. ~~This~~The ~~represents~~Company anhas ~~ownership~~determined, ~~interest~~that ofFIN48 ~~63.48%~~will innot impact the financial statements since the Company asis ~~of both~~in ~~dates~~a partnership for federal, state, and local tax purposes.

OnFASB ~~December 16,~~issued ~~2004,~~Statement ~~Schwab~~No. 157 ~~entered~~in ~~into~~September an2006, ~~agreement~~Fair ~~with~~Value ~~the~~Measurements, ~~Company~~which ~~and~~is ~~other~~effective ~~funds~~for ~~managed~~financial bystatements ~~the former~~issued ~~Investment~~for ~~Adviser~~fiscal ~~whereby~~years beginning ~~Schwab~~after ~~has~~November 15, ~~funded~~2007, aand ~~reserve~~interim ~~account~~periods towithin bethose ~~held~~fiscal byyears. ~~the~~This ~~Investment~~statement ~~Adviser~~provides orenhanced ~~its~~guidance ~~affiliate.~~for ~~This~~using ~~reserve~~fair ~~account~~value ~~was~~to ~~established~~measure soassets ~~that the Company~~ and ~~other~~liabilities. ~~funds~~It ~~managed~~clarifies byfair ~~the~~value, ~~Investment~~establishes ~~Adviser~~a ~~will~~framework befor ~~able to~~measuring ~~draw~~fair ~~upon~~value itin togenerally ~~pay~~accepted inaccounting ~~full~~principles ~~all~~(GAAP), ~~costs~~and ~~incurred~~expands ~~related~~disclosures toabout ~~the~~fair ~~termination~~value ~~of E&Y~~measurements. ~~This~~The ~~agreement~~standard ~~was~~applies ~~executed~~whenever inother ~~order~~standards torequire ~~ensure~~(or ~~that~~permit) ~~these~~assets ~~costs~~or ~~related~~liabilities to ~~the~~be ~~termination~~measured ofat ~~E&Y~~fair ~~are~~value. ~~not~~The ~~borne~~standard does bynot ~~the~~expand ~~Company,~~ the ~~other~~use ~~funds~~of ~~managed~~fair byvalue ~~the Investment~~in ~~Adviser~~any ornew ~~their respective shareholders~~circumstances. ~~Schwab~~The ~~is an affiliate of the~~ Company’s ~~Investment~~is ~~Adviser.~~reviewing ~~In consideration of~~ the ~~funding~~statement ~~of the reserve account, the Company~~ and ~~the~~its ~~other~~impact ~~funds~~on ~~managed by~~ the ~~Investment~~financial ~~Adviser subrogated all of their claims, causes of action and rights against E&Y for payment of these expenses to Schwab~~statements.

~~On November~~FASB issued Statement No. ~~20,~~159 ~~2006~~in February 2007, ~~Schwab~~the ~~announced~~Fair anValue ~~agreement~~Option tofor ~~sell~~Financial ~~U.S.~~Assets ~~Trust~~and Financial Liabilities, awhich ~~wholly-owned~~is ~~subsidiary~~effective offor ~~Schwab,~~Financial toStatements ~~Bank~~issued offor ~~America~~fiscal ~~(the~~year ~~“Sale”)~~beginning after November 15, 2007. ~~The~~SFAS ~~Sale~~159 permits ofentities ~~U.S.~~to ~~Trust~~choose ~~includes~~to ~~all~~measure ofmany ~~U.S.~~financial ~~Trust’s~~instruments ~~subsidiaries,~~and ~~including~~certain ~~UST~~other ~~Advisers~~items at fair value, ~~Inc.,~~ ~~the~~with ~~Company’s~~changes ~~Investment~~in ~~Adviser~~fair value recognized in earnings. The ~~Sale~~Company is ~~subject~~reviewing tothe ~~Federal~~statement ~~Reserve~~and ~~Board~~its ~~and~~impact ~~other~~on ~~regulatory~~the ~~approvals~~financial statements.

~~USTA~~20 will continue to serve as the investment adviser to the Company after the Sale, although U.S. Trust N.Y. will cease to serve as the Investment Sub-Adviser. However, due to the change in ownership of USTA and U.S. Trust N.Y., the Sale may have the effect of terminating the existing investment advisory agreement between the Company and USTA. Accordingly, it is anticipated that the Company will enter into a new investment advisory agreement with USTA upon consummation of the Sale (collectively, the “New Advisory Agreement”). The Board of Managers approved the New Advisory Agreement at its special meeting held on January 11, 2007. The proposed New Advisory Agreement was submitted to the members of the Company for approval and a proxy statement providing further details with respect to the Sale and the proposed New Advisory Agreement was mailed to the members of the Company on or about February 8, 2007. At a special meeting held on March 15, 2007, the members of the Company approved the New Advisory Agreement and reelected the current members of the Board of Managers.

~~Note 3 — Purchases~~Item 2. Management’s Discussion and ~~Sales~~Analysis of ~~Securities~~Financial Condition and Results of Operations. For the Nine months and Three months Ended July 31, 2007 as Compared to the Similar Periods in 2006

~~Excluding~~Realized ~~short-term investments, the Company’s purchases~~ and ~~sales~~ ofUnrealized ~~securities~~Gains ~~for the six months ended April 30, 2007,~~ and ~~April 30,~~Losses ~~2006~~from ~~were~~Portfolio asInvestments ~~follows:~~

Six Month Ended April 30,	Purchases ($)	Proceeds ($)
2007	4,508,490	14,577,254
2006	6,536,725	505,822

For the nine months ended July 31, 2007 and 2006, respectively the Company had a net realized (loss) on security transactions of ($3,972,070) and ($4,618,068), respectively. The net realized loss for the nine months ended July 31, 2007 was principally the result of the Company’s sale of Silverback Systems, Inc, a private company investment which resulted in a realized loss of ($7,580,196). This loss was partially offset by a realized gain of $3,033,984 from the Company’s sale of Pilot Software Inc., another private company investment, net realizations from other private company investments of $187,271, and net gain distributions from the private investment funds of $386,871. The net realized (loss) for the nine months ended July 31, 2006 was principally the result of the Company’s sale of LightConnect Inc, a private company investment which resulted in a (loss) of ($4,619,235). For the nine months ended July 31, 2007 and 2006, respectively the Company had a net change in unrealized appreciation/(depreciation) on investments of $882,127 and ($9,806,680), respectively. The net change in unrealized appreciation for the nine months ended July 31, 2007 was principally the combination of: i) the sale of Silverback Systems Inc., which resulted in a decrease in unrealized depreciation of $6,730,172 due to the reclassification from an unrealized loss to realized loss; ii) a decrease of ($4,840,466) due to the write-down of Cydelity, Inc.; iii) an increase of $1,012,291 due to the write-up of OpVista, Inc.; iv) a decrease of ($3,320,399) due to a write-down of NanoOpto Corporation; v) an increase of $1,350,001 due to a write-up of Archemix Corporation; vi) a decrease of ($1,521,144) due to a write-down on Tensys Medical, Inc.; and vii) an increase of $1,469,065 due to a write-up of Genoptix, Inc. The remaining change was a result of changes in the private investment funds and public stocks. The net change in unrealized depreciation for the period ended July 31, 2006 was principally the result of a decrease in the valuation of Nano Opto Corporation of ($873,732), Silverback Systems, Inc of ($2,134,094) and OpVista Inc of ($ 6,727,848) all private company investments.

~~Note~~For the three months ended July 31, 2007 and 2006, respectively the Company had a net realized gain/(loss) on security transactions of $137,524 and ($4 ~~— Commitments~~,627,914), respectively. The net realized gain for the three-months ended July 31, 2007 was principally the result of a net gain distribution of $396,333 from the private investment funds, that was offset by a contingent loss accrual relating to the Pilot Software sale of ($258,809). The net realized loss for the three months ended July 31, 2006 was principally the result of the Company’s sale of LightConnect Inc, a private company investment which resulted in a loss of ($4,619,235). For the three months ended July 31, 2007 and 2006, respectively the Company had a net change in unrealized (depreciation) on investments of ($2,859,433) and ($6,867,910), respectively. The net change in unrealized depreciation for the period ended July 31, 2007 was principally the result of the combination of: i) an increase of $1,350,001 and $1,469,065 due to write-ups on Archemix Corporation and Genoptix, Inc., respectively and ii) a decrease of ($3,320,399), ($1,521,144), and ($618,000) due to write-downs of NanoOpto Corporation, Tensys Medical, Inc., and Cydelity, Inc., respectively. The remaining change was a result of changes in the private investment funds and public stocks. The net change in unrealized depreciation for the three months ended July 31, 2006 was principally the result of a decrease in the valuation of OpVista, Inc. of ($6,727,848), a private company investment.

AsInvestment ofIncome ~~April 30,~~and ~~2007,~~Expenses ~~the Company had outstanding investment commitments totaling $8,157,826.~~

17For the nine months ended July 31, 2007, the Company had investment income of $516,037 and operating expenses of $1,018,338, resulting in a net investment loss of ($502,301). In comparison, for the similar period ended July 31, 2006, the Company had investment income of $1,018,896 and operating expenses of $1,490,174, resulting in a net investment loss of ($471,278). The decrease in net investment income resulted from a decrease in short-term investments purchased and matured during the period in addition to having less debt securities within the portfolio. The Company continues its investment program in venture capital companies and private equity funds. The decrease in operating expenses was due primarily to a decline in management fees as a result of reduced net assets under management during the period and a decrease in the management fee rate from 2% to 1%. This decrease in management fees was slightly offset by increases in other operating expenses.

~~Table~~For the three months ended July 31, 2007, the Company had investment income of ~~Contents~~$135,960 and net operating expenses of $313,301 resulting in a net investment loss of ($177,341). In comparison, for the similar period ended July 31, 2006, the Company had investment income of $239,623 and net operating expenses of $379,112, resulting in a net investment loss of ($139,489). The decrease in net investment income for the three months ended July 31, 2007 was a result of a decrease in short-term interest income. The decrease in operating expenses was primarily due to a decline in management fees which resulted from a reduced level of net assets under management during the period and was slightly offset by increases in other operating expenses.

~~Note~~21 ~~5 — Transactions with Affiliated Companies~~

AnInvestment ~~affiliated~~Income company is a company in which the Company has ownership of more than 5% of the voting securities. The Company did not receive dividends from affiliated companies during the six months ended April 30, 2007 and ~~the~~Expenses ~~year~~(continued) ~~ended October 31, 2006. Transactions with companies, which are or were affiliates, were as follows:~~

	Shares/Principal Amount Held at October 31, 2006	October 31,2006 Value		Purchases /ConversionAcquisition		For the Six Months Ended April 30, 2007 (Unaudited)							April 30, 2007 Value(Note 1)
Name of Investment						Sales Proceeds /Conversion		InterestReceived		RealizedGain/(Loss)		Shares/Principal Amount Held atApril 30 2007
Controlled Affiliates
Pilot Software Inc., Series A Preferred	46,362,656	$	8,110,096	$	—	$	11,450,000	$	—	$	2,943,761	—	$	—
Pilot Software Inc., Bridge Note, 9%	1,404,600		1,404,600		—		1,357,489		—		349,032	—		—
LogicLibrary, Inc., Series A Preferred	7,762,821		3,549,296		277,548		—		—		—	8,369,880		3,826,844
LogicLibrary, Inc., Series A-1 Preferred	3,080,464		1,408,450		—		—		—		—	3,080,464		1,408,450
Cydelity Inc. Series A Preferred	19,995,000		—		—		—		—		—	19,995,000		—
Cydelity Inc. Series A-1 Preferred	19,702,277		3,940,456		—		—		—		—	19,702,277		—
Cydelity Inc. Series A-2 Preferred	25,535,051		2,500,009		—		—		—		—	25,535,051		1,600,000
Cydelity Inc., Common Stock	1,000,000		—		—		—		—		—	1,000,000		—
Total Controlled Affiliates		$	20,912,907	$	277,548	$	12,807,489	$	—	$	3,292,793		$	6,835,294
Non-Controlled Affiliates
Chips & Systems, Inc., Series A Preferred	7,000,000		—		—		—		—		—	7,000,000		—
Chips & Systems, Inc. Bridge Note	1,441,133		—		—		—		—		—	1,441,133		—
Ethertronics, Inc., Series B Preferred	4,433,333		6,650,000		—		—		—		—	4,433,333		6,650,000
Ethertronics, Inc., Series B Warrants	281,667		—		—		—		—		—	281,667		—
Ethertronics, Inc., Series C Warrants	214,073		—		—		—		—		—	214,073		—
Ethertronics, Inc., Series C Preferred	1,316,793		1,975,190		571,746		—		—		—	1,697,957		2,546,936
Genoptix, Inc., Series 1-A Preferred	942,481		950,822		—		—		—		—	942,481		950,822
Genoptix, Inc., Series 1-B Preferred	1,403,696		950,822		—		—		—		—	1,403,696		950,822
Genoptix, Inc., Common Stock	46,860		—		—		—		—		—	46,860		—
Genoptix, Inc., Series 1-C Preferred	620,580		554,178		—		—		—		—	620,580		554,178
Genoptix, Inc., Series 1-D Preferred	728,413		461,815		—		—		—		—	728,413		461,815
MIDAS Vision Systems, Inc., Series A-1 Preferred	933,593		—		—		—		—		—	933,593		—
MIDAS Vision Systems, Inc., Common Stock	157,396		—		—		—		—		—	157,396		—
NanoOpto Corp., Series A-1 Preferred	956,234		840,912		—		—		—		—	956,234		840,912
NanoOpto Corp., Series B Preferred	3,023,399		1,286,155		—		—		—		—	3,023,399		1,286,155
NanoOpto Corp., Series C Preferred	1,682,470		733,389		—		—		—		—	1,682,470		733,389
NanoOpto Corp., Series C Warrants	229,410		—		—		—		—		—	229,410		—
NanoOpto Corp., Series D Preferred	1,234,263		382,622		—		—		—		—	1,234,263		382,622
NanoOpto Corp., Bridge Note	—		—		237,321		—		—		—	237,321		237,321
OpVista, Inc., Series AA Preferred	5,089,790		5,367,967		526,227		—		—		—	5,683,907		6,742,193
OpVista, Inc., Common Stock	1,079,541		1,138,542		—		—		—		—	1,079,541		1,280,541
OpVista, Inc., Series BB Convertible Preferred	—		—		491,800		—		—		—	433,399		514,094
Silverback Systems, Inc., Series B	—		1,600,000		—		—		—		—	—		—
Tensys Medical, Inc., Bridge Note	52,017		52,017		59,039		—		—		—	52,017		111,056
Tensys Medical, Inc., Series C Preferred	4,166,667		1,887,160		—		—		—		—	4,166,667		1,887,160
Tensys Medical, Inc., Series D Preferred	1,187,500		537,840		—		—		—		—	1,187,500		537,840
Total Non-Controlled Affiliates		$	25,369,431	$	1,886,133	$	—	$	—	$	—		$	26,667,856

USTA provides investment management and administrative services required for the operation of the Company. In consideration of the services rendered by the Investment Adviser and, prior to the sale by the Investment Sub-Adviser, the Company pays a management fee based upon a percentage of the net assets of the Company invested or committed to be invested in certain types of investments and an incentive fee based in part on a percentage of realized capital gains of the Company as described in Note 2 to Item 1 above. Such fee is determined and payable quarterly. For the nine months ended July 31, 2007 and 2006, the Investment Adviser, the former Investment Adviser and the Investment Sub-Adviser (collectively, the “Advisors”) earned $509,020 and $1,040,862 in management fees, respectively. Management fees, recorded during the nine months ended July 31, 2007 decreased over the nine months ended July 31, 2006 due to a decrease in net assets. For the three months ended July 31, 2007 and 2006, the Advisers earned $160,975 and $197,744 in management fees, respectively. Management fees recorded during the three months ended July 31, 2007 decreased over the three months ended July 31, 2006 due to a decline in net assets under management.

18Net Assets

~~Table~~At July 31, 2007, the Company’s net assets were $63,703,968, or a net asset value per unit of membership ~~Contents~~interest of $215.79. This represents a decrease of $11,858,124 from the beginning net assets of $75,562,092, or a net asset value per unit of membership interest of $255.96, at October 31, 2006. The decrease resulted principally from a distribution to shareholders of $28.00 per share, which ultimately reduced net assets by $8,265,880 and unrealized losses on Direct Private Investments.

	Shares/PrincipalAmount Held atOctober 31,2005	October 31, 2005 Value		Purchases / Conversion Acquisitions		For the Year Ended October 31, 2006 (Audited)									October 31,2006 Value (Note 1)
Name of Investment						Sales / Conversion Proceeds			InterestReceived		Realized Gain (Loss)			Shares/Principal Amount Held at October 31, 2006
Controlled Affiliates
Pilot Software Inc., Series A Preferred	46,362,656	$	8,110,096	$	—	$	—		$	—	$	—		46,362,656	$	8,110,096
Pilot Software Inc., Bridge Note, 9%	—		—		1,404,600		—			19,484		—		1,404,600		1,404,600
LogicLibrary, Inc., Series A Preferred	6,530,581		2,985,916		563,380		—			—		—		7,762,821		3,549,296
LogicLibrary, Inc., Series A-1 Preferred	3,080,464		1,408,450		—		—			—		—		3,080,464		1,408,450
Cydelity Inc. Series A Preferred	19,995,000		—		—		—			—		—		19,995,000		—
Cydelity Inc. Series A-1 Preferred	—		—		3,940,456		—			—		—		19,702,277		3,940,456
Cydelity Inc. Series A-2 Preferred	—		—		2,500,009		—			—		—		25,535,051		2,500,009
Cydelity Inc. Common Stock	1,000,000		—		—		—			—		—		1,000,000		—
Cydelity Inc. Series A Warrants	7,500,000		—		—		—			—		—		—		—
Cydelity Inc., Bridge Note, 8%	3,000,000		3,000,000		700,000		(3,700,000	)		—		—		—		—
Total Controlled Affiliates		$	15,504,462	$	9,108,445	$	(3,700,000	)	$	19,484	$	—			$	20,912,907
Non-Controlled Affiliates
Chips & Systems, Inc., Series A Preferred	7,000,000	$	—	$	—	$	—			—	$	—		7,000,000	$	—
Chips & Systems, Inc. Bridge Note	1,441,133		—		—		—			—		—		1,441,133		—
Ethertronics, Inc., Series B Preferred	4,433,333		6,650,000		—		—			—		—		4,433,333		6,650,000
Ethertronics, Inc., Series B Warrants	281,667		—		—		—			—		—		281,667		—
Ethertronics, Inc., Series C Warrants	163,580		—		—		—			—		—		214,073		—
Ethertronics, Inc., Bridge Note	—		—		500,000		(500,000	)		—		—		—		—
Ethertronics, Inc., Series C Preferred	980,172		1,470,258		504,932		—			—		—		1,316,793		1,975,190
Genoptix, Inc., Series 1-A Preferred	942,481		950,822		—		—			—		—		942,481		950,822
Genoptix, Inc., Series 1-B Preferred	1,403,696		950,822		—		—			—		—		1,403,696		950,822
Genoptix, Inc., Common Stock	46,860		—		—		—			—		—		46,860		—
Genoptix, Inc., Series 1-C Preferred	620,580		554,178		—		—			—		—		620,580		554,178
Genoptix, Inc., Series 1-D Preferred	728,413		461,815		—		—			—		—		728,413		461,815
LightConnect, Inc., Series B Preferred	4,330,504		5,000,000		—		(5,000,000	)		—		(3,771,140	)	—		—
LightConnect, Inc., Series C Preferred	12,292,441		992,000		—		(992,000	)		—		(748,194	)	—		—
MIDAS Vision Systems, Inc., Series A-1 Preferred	933,593		—		—		—			—		—		933,593		—
MIDAS Vision Systems, Inc., Common Stock	157,396		—		—		—			—		—		157,396		—
NanoOpto Corp., Series A-1 Preferred	956,234		1,116,350		—		—			—		—		956,234		840,912
NanoOpto Corp., Series B Preferred	3,023,399		1,286,155		—		—			—		—		3,023,399		1,286,155
NanoOpto Corp., Series C Preferred	1,682,470		733,389		—		—			—		—		1,682,470		733,389
NanoOpto Corp., Series C Warrants	229,410		—		—		—			—		—		229,410		—
NanoOpto Corp., Series D Preferred	—		—		382,622		—			—		—		1,234,263		382,622
OpVista, Inc., Series AA Preferred	—		—		4,508,179		—			—		—		5,089,790		5,367,967
OpVista, Inc., Series B Preferred	5,333,333		—		—		(4,000,000	)		—		—		—		—
OpVista, Inc., Series C Preferred	12,671,059		5,000,000		—		(2,500,000	)		—		—		—		—
OpVista, Inc., Series D Preferred	10,368,483		1,058,000		1,058,000		(1,058,000	)		—		—		—		—
OpVista, Inc., Series E Preferred	15,935,224		1,626,030		1,626,030		(1,626,031	)		—		—		—		—
OpVista, Inc., Common Stock	—		—		9,184,031		—			—		—		1,079,541		1,138,542
OpVista, Inc., 8% Bridge Note	—		—		1,727,599		(1,727,599	)		—		—		—		—
OpVista, Inc., Warrants	—		—		8,681		(8,681	)		—		(8,681	)	—		—
Silverback Systems, Inc., Common	—		—		4,759,081		—			—		—		40,026		—
Silverback Systems, Inc., Series B	—		—		1,500,781		—			—		—		559,993		1,600,000
Silverback Systems, Inc., Series A-2 Preferred	—		—		2,070,310		—			—		—		772,503		—
Silverback Systems, Inc., Series C Preferred	34,364,257		3,333,333		—		(3,343,467	)		—		—		—		—
Silverback Systems, Inc., 5% Bridge Notes	1,969,206		1,969,206		300,000		(2,269,206	)		—		—		—		—
Silverback Systems, Inc., Series C Warrant	4,173,033		196		—		(196	)		—		(195	)	—		—
Tensys Medical, Inc., Bridge Note	—		—		52,017		—			—		—		52,017		52,017
Tensys Medical, Inc., Series C Preferred	4,166,667		1,887,160		—		—			—		—		4,166,667		1,887,160
Tensys Medical, Inc., Series D Preferred	1,187,500		537,840		—		—			—		—		1,187,500		537,840
Total Non-Controlled Affiliates		$	36,993,169	$	28,182,263	$	(24,440,795	)	$	0	$	(4,528,210	)		$	25,369,431

Liquidity and Capital Resources

19The Company will focus its investments in the securities of privately-held venture capital companies, and to a lesser extent in venture capital, buyout and other private equity funds managed by third parties. The Company may offer managerial assistance to certain of such privately-held venture capital companies. The Company invests its available cash in short-term investments of marketable securities pending distribution to investors.

~~Table~~At July 31, 2007, the Company held $2,571 in cash and cash equivalents and $10,807,739 in short-term investments as compared to $2,934 held in cash and cash equivalents and $14,422,438 in short-term investments at October 31, 2006. The decrease in short-term investments from October 31, 2006 was principally due to follow-on investments in private companies as well as capital calls for private investment funds. The Company, during this period funded additional capital, totaling $3,371,731, per its commitments to the private investment funds. In connection with the Company’s total commitments to private funds in the amount of ~~Contents~~$25,700,000 since inception, the Company, through July 31, 2007, has contributed $18,693,096 or 72.70% of the total capital committed since inception. The Company also participated in follow-on financing rounds, totaling $2,130,539, for several of its private companies.

~~Note~~The ~~6 — Pending~~Company ~~Litigation~~believes that its liquidity and capital resources are adequate to satisfy its operational needs as well as the continuation of its investment program.

~~The~~Application ~~former Investment Adviser, certain~~ of ~~its~~Critical ~~affiliates~~Accounting ~~and~~Policies others were named in four fund shareholder class action lawsuits and two derivative actions which allege that the former Investment Adviser, certain of its affiliates and others allowed certain parties to engage in illegal and improper mutual fund trading practices, which allegedly caused financial injury to the shareholders of certain mutual funds managed by the former Investment Adviser. Each seeks unspecified monetary damages and related equitable relief.

~~The~~Under the ~~class~~supervision ~~and derivative~~of ~~actions~~the ~~described~~Company’s ~~above~~Valuation ~~were~~and ~~transferred~~Audit toCommittees, ~~the~~consisting ~~United~~of ~~States~~the ~~District~~independent ~~Court~~Managers ~~for~~of the ~~District~~Company, ofthe ~~Maryland~~Investment ~~for~~Adviser ~~coordinated~~makes ~~and~~certain ~~consolidated~~critical ~~pre-trial~~accounting ~~proceedings.~~estimates Inwith ~~November~~respect ~~2005,~~to the ~~Maryland~~valuation ~~court dismissed many~~ of ~~the~~private ~~plaintiffs’~~portfolio ~~claims~~investments. inThese ~~both~~estimates ~~the~~could ~~class~~have ~~action~~a ~~and~~material ~~derivative~~impact ~~lawsuits.~~on ~~Several~~the ~~affiliates~~presentation of the ~~former~~Company’s ~~Investment~~financial ~~Adviser~~condition ~~and~~because ~~individual~~in ~~defendants~~total, ~~have~~they ~~also~~currently ~~been~~represent ~~dismissed~~76.52% ~~Plaintiffs’~~of ~~claims~~the ~~under~~Company’s ~~Sections~~net ~~10(b)~~assets. ~~and~~For ~~20(a) of~~ the ~~Securities~~private ~~Exchange~~investments ~~Act~~held ofat ~~1934~~July 31, ~~as amended~~2007, ~~and~~changes ~~under~~to ~~Section 36(b)~~these ~~and~~estimates, ~~48(a)~~i.e. ofchanges in the ~~Investment~~valuations ~~Company~~of ~~Act~~these ofprivate ~~1940~~investments, asresulted ~~amended,~~in ~~however~~a $3,741,560 ~~have~~increase ~~not~~in ~~been~~net ~~dismissed~~asset value from October 31, 2006.

~~While~~The ~~the~~value ~~ultimate~~for ~~outcome~~securities offor ~~these~~which ~~matters~~no ~~cannot~~public bemarket ~~predicted~~exists ~~with~~is ~~any~~difficult ~~certainty~~to atdetermine. ~~this~~Generally ~~time~~speaking, ~~based~~such investments will be valued on ~~currently~~a “going ~~available~~concern” ~~information~~basis ~~and~~without ~~consultation~~giving ~~with~~effect ~~counsel,~~to U.any Sdisposition costs. ~~Trust~~There ~~believes~~is ~~that~~a ~~the likelihood~~range ~~is remote~~of values that ~~the~~is ~~pending~~reasonable ~~litigation~~for ~~will materially~~such ~~affect~~investments ~~the~~at ~~Investment~~any ~~Adviser’s~~particular ~~ability~~time. toBecause ~~provide~~of ~~investment~~the ~~management~~inherent ~~services~~uncertainty toof valuation, the ~~Fund.~~estimated ~~Neither~~values may differ significantly from the ~~Investment~~values ~~Adviser~~that ~~nor~~would ~~the~~have ~~Company~~been is used had a ~~party~~ready tomarket for the ~~lawsuits~~securities ~~described above~~existed, and the differences could be material.

~~Note~~22 ~~7 — Guarantees~~

InApplication ~~the normal course~~ of ~~business,~~Critical ~~the~~Accounting ~~Company~~Policies ~~enters~~(continued) into contracts that provide general indemnifications. The Company’s maximum exposure under these agreements is dependent on future claims that may be made against the Company, and therefore cannot be established; however, based on experience, the risk of loss from such claims is considered remote.

~~Note~~Initially, direct private company investments are valued based upon their original cost until developments provide a sufficient basis for use of a ~~8 — New~~valuation ~~Accounting~~other ~~Pronouncements~~than cost. Upon the occurrence of developments providing a sufficient basis for a change in valuation, direct private company investments will be valued by the “private market” or “appraisal” methods of valuation. The private market method shall only be used with respect to reliable third party transactions by sophisticated, independent investors. The appraisal method shall be based upon such factors affecting the company such as earnings, net worth, reliable private sale prices of the company’s securities, the market prices for similar securities of comparable companies, an assessment of the company’s future prospects or, if appropriate, liquidation value. The values for the investments referred to in this paragraph will be estimated regularly by the Investment Adviser or a committee of the Board, both under the supervision of the Board, and, in any event, not less frequently than quarterly. However, there can be no assurance that such value will represent the return that might ultimately be realized by the Company from the investments.

The ~~Financial~~valuation ~~Accounting~~of ~~Standards~~the Company’s ~~Board~~private ~~(FASB)~~funds ~~issued~~is ~~Interpretation 48~~based inupon ~~July~~its ~~2006,~~pro-rata ~~Accounting~~share ~~for~~of ~~Uncertainty~~the invalue ~~Income~~of ~~Taxes~~the –assets anof ~~interpretation~~a ofprivate ~~FASB~~fund ~~Statement~~as ~~109~~determined ~~(FIN~~by ~~48).~~such ~~FIN~~private 48fund, ~~clarifies~~in ~~the~~accordance ~~accounting~~with ~~for~~its ~~income~~partnership ~~taxes~~agreement, byconstitutional ~~prescribing~~or ~~the~~other ~~minimum~~documents ~~recognition~~governing ~~threshold~~such avaluation, on ~~tax~~the ~~position~~valuation ~~must~~date. ~~meet~~If ~~before being~~such ~~recognized~~valuation inwith respect to the ~~financial~~Company’s ~~statements.~~investments ~~FIN~~in 48private funds is ~~effective~~not ~~for~~available ~~fiscal~~by ~~years~~reason ~~beginning~~of ~~after~~timing ~~December 15~~or other event on the valuation date, ~~2006.~~or ~~The~~are ~~Company~~deemed isto inbe ~~the~~unreliable ~~process~~by ofthe ~~evaluating~~Investment Adviser, the Investment ~~effects~~Adviser, under supervision of the ~~adoption~~Board, shall determine such value based on its judgment of ~~FIN~~fair 48value on the ~~financial~~appropriate ~~statements~~date, less applicable charges, if any.

~~FASB~~The ~~issued~~Investment ~~Statement~~Adviser ~~No. 157~~also inmakes ~~September~~estimates ~~2006,~~regarding ~~Fair~~discounts ~~Value~~on ~~Measurements,~~market ~~which~~prices isof ~~effective~~publicly ~~for~~traded ~~financial~~securities ~~statements~~where ~~issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years~~appropriate. ~~This~~For ~~statement~~securities ~~provides enhanced guidance for using fair value to measure assets and liabilities. It clarifies fair value, establishes a framework~~which ~~for~~have ~~measuring fair value in generally accepted accounting principles (GAAP)~~legal, ~~and~~contractual ~~expands disclosures about fair value measurements. The standard applies whenever other standards require (~~or ~~permit)~~practical ~~assets~~restrictions oron ~~liabilities~~transfer, toa bediscount ~~measured at fair value. The standard does not expand the use~~ of ~~fair~~10% ~~value~~to in40% ~~any~~from ~~new circumstances. The Company is reviewing~~ the ~~statement~~public ~~and~~market ~~its~~price ~~impact~~will onbe ~~the financial statements~~applied.

~~FASB~~Item ~~issued Statement No~~3. ~~159~~ inQuantitative ~~February 2007, the Fair Value Option for Financial Assets~~ and ~~Financial~~Qualitative ~~Liabilities,~~Disclosures ~~which~~about isMarket ~~effective for Financial Statements issued for fiscal year beginning after November 15, 2007~~Risk. SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value, with changes in fair value recognized in earnings. The Company intends to early adopt SFAS 159 as of January 1, 2007. The Company is reviewing the statement and its impact on the financial statements.

20Equity Price Risk

~~Table~~The Company anticipates that a majority of ~~Contents~~its investment portfolio will consist of securities in private companies and private investment funds, currently representing 76.52% of net assets, which are not publicly traded. These investments are recorded at fair value as determined by the Investment Adviser in accordance with valuation guidelines adopted by the Board of Managers. This method of valuation does not result in increases or decreases in the fair value of these securities in response to changes in market prices. Thus, these securities are not subject to equity price risk normally associated with public equity markets, except that to the extent that the private investment funds hold underlying public securities, the Company is indirectly exposed to equity price risk associated with the public markets. At July 31, 2007 and October 31, 2006 the Company was not subject to equity price risk normally associated with public equity markets, except to the extent that the private investment funds that the Company has invested in has, from time to time, interests in securities which may be publicly traded.

Item 2 4. ~~Management’s~~Controls ~~Discussion~~ and ~~Analysis of Financial Condition and Results of Operations~~Procedures.

~~For~~(a) ~~the~~Evaluation ~~Six~~of ~~months~~Disclosure Controls and ~~Three~~Procedures. ~~months~~As ~~Ended~~of ~~April~~July 3031, 2007 (the end of the period covered by this report), the Company’s principal executive officers and principal financial officer evaluated the effectiveness of the Company’s disclosure controls and procedures (as ~~Compared~~defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) and have concluded that, based on such evaluation, the Company’s disclosure controls and procedures were adequate and effective to ensure that material information relating to the ~~Similar~~Company ~~Periods~~was inmade ~~2006~~known to them by others within those entities.

~~Realized~~(b) ~~and~~Changes ~~Unrealized~~in ~~Gains~~Internal Controls. ~~and~~There ~~Losses~~were ~~from~~no ~~Portfolio~~changes in the Company’s internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during the Company’s last fiscal quarter that have materially ~~Investments~~affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~For~~23 the six months ended April 30, 2007 and 2006, respectively the Company had a net realized (loss)/gain on security transactions of ($4,109,593) and $9,846, respectively. For the six months ended April 30, 2007 and 2006, respectively the Company had a net change in unrealized appreciation/(depreciation) on investments of $3,741,560 and ($2,938,770), respectively. The net realized loss for the six months ended April 30, 2007 was principally the result of the Company’s sale of Silverback Systems, Inc, a private company investment which resulted in a realized loss of ($7,580,196). This loss was partially offset by a realized gain of $3,292,793 from the Company’s sale of Pilot Software Inc., another private company investment. The net realized gain for the six months ended April 30, 2006 was principally the result of the Company’s additional distribution received from the Company’s sale of Gyration, a private company investment which was partially offset by realized loss from the sale of stock distributed by the Company’s private investment funds. The net change in unrealized appreciation for the six months ended April 30, 2007 was principally the combination of: i) the sale of Silverback Systems Inc., a private company investment, which resulted in a decrease in unrealized depreciation of $6,730,172 due to the reclassification from an unrealized loss to realized loss; ii) a decrease of $4,840,465 due to the write-down of Cydelity, Inc a private company investment; and iii) an increase of $1,012,291 due to the write-up of OpVista Inc., a private company investment. The net change in unrealized depreciation for the period ended April 30, 2006 was principally the result of a decrease in the valuation of Nano Opto Corporation of ($873,732), and Silverback Systems, Inc of ($2,134,094) both private company investments.

~~For~~PART ~~the three months ended April 30, 2007 and 2006, respectively the Company had a net realized gain/(loss) on security transactions of $3,292,107 and ($5,867), respectively~~II. ~~For~~OTHER ~~the~~INFORMATION three months ended April 30, 2007 and 2006, respectively the Company had a net change in unrealized (depreciation) on investments of ($1,915,488) and ($2,024,990), respectively. The net realized gain for the three-month period ended April 30, 2007 was principally the result of a distribution of $3,292,793 from the Company’s sale of Pilot Software Inc., another private company investment. The net realized loss for the three months ended April 30, 2006 was principally the result of the sale of stock distributed by the Company’s private investment funds. The net change in unrealized depreciation for the period ended April 30, 2007 was principally the result of a reclassification of $3,736,394 of unrealized appreciation on the Company’s investment in Pilot Software Inc. to realized gains. This change was offset by an increase in unrealized appreciation of $1,012,291 due to the write-up of OpVista Inc., a private company investment. The net change in unrealized depreciation for the three months ended April 30, 2006 was principally the result of a decrease in the valuation of Silverback Systems, Inc. of ($2,134,094), a private company investment.

~~Investment~~Item ~~Income~~1. ~~and~~Legal ~~Expenses~~ Proceedings.

~~For the six months ended April 30, 2007, the Company had investment income of $380,078 and operating expenses of $705,039, resulting in a net investment loss of ($324,961)~~None. In comparison, for the similar period ended April 30, 2006, the Company had investment income of $779,273 and operating expenses of $1,111,062, resulting in a net investment loss of ($331,789). The decrease in net investment income resulted from a decrease in short-term investments purchased and matured during the period. The Company continues its investment program in venture capital companies and private equity funds. The decrease in operating expenses was due primarily to a decline in management fees as a result of reduced net assets under management during the period and was slightly offset by increases in other operating expenses.

~~For~~Item ~~the~~2. ~~three~~Changes ~~months ended April 30, 2007, the Company had investment income of $164,929 and net operating expenses of $324,427 resulting~~ in aSecurities ~~net investment loss of ($159,498). In comparison, for the similar period ended April 30, 2006, the Company had investment income of $392,904~~ and ~~net~~Use ~~operating expenses~~ of ~~$526,666, resulting in a net investment loss of ($133,762)~~Proceeds. The decrease in net investment income for the three months ended April 30, 2007 was a result of a decrease in short-term interest income. The decrease in operating expenses was primarily due to a decline in management fees which resulted from a reduced level of net assets under management during the period and was slightly offset by increases in other operating expenses.

21 None.

~~Table~~Item of3. ~~Contents~~Defaults Upon Senior Securities.

~~Investment~~None. ~~Income and Expenses (continued)~~

~~USTA~~Item ~~and the Investment Sub-Adviser, provide investment management and administrative services required for the operation of the Company~~4. In ~~consideration~~Submission of ~~the~~Matters ~~services rendered by the Investment Adviser and the Investment Sub-Adviser, the Company pays a management fee based upon a percentage of the net assets of the Company invested or committed~~ to ~~be invested in certain types of investments and an incentive fee based in part on~~ a ~~percentage~~Vote of ~~realized~~Security ~~capital gains of the Company as described in Note 2 to Item 1 above~~Holders. Such fee is determined and payable quarterly. For the six months ended April 30, 2007 and 2006, the Investment Adviser, the former Investment Adviser and the Investment Sub-Adviser earned $348,046 and $843,118 in management fees, respectively. Management fees, recorded during the six months ended April 30, 2007 decreased over the six months ended April 30, 2006 due to a decrease in net assets. For the three months ended April 30, 2007 and 2006, the Investment Advisers earned $162,402 and $378,063 in management fees, respectively. Management fees recorded during the three months ended April 30, 2007 decreased over the three months ended April 30, 2006 due to a decline in net assets under management.

~~Net Assets~~None.

AtItem ~~April 30, 2007, the Company’s net assets were $66,603,218, or a net asset value per unit of membership interest of $225~~5.~~61.~~ ~~This~~Other ~~represents a decrease of $8,958,874 bringing net assets to $75,562,092, or a net asset value per unit of membership interest of $255~~Information.~~96, at October 31, 2006. The decrease resulted principally from a distribution to shareholders of $28.00 per share, which ultimately reduced net assets by $8,265,880.~~

~~Liquidity~~None. ~~and Capital Resources~~

~~The~~Item ~~Company~~6. ~~will~~Exhibits ~~focus its investments in the securities of privately-held venture capital companies,~~ and toReports aon ~~lesser~~Form ~~extent in venture capital, buyout and other private equity funds managed by third parties. The Company may offer managerial assistance to certain of such privately~~8-~~held venture capital companies~~K. ~~The Company invests its available cash in short-term investments of marketable securities pending distribution to investors.~~

At(a) April 30, 2007, the Company held $165,071 in cash and cash equivalents and $11,146,315 in short-term investments as compared to $2,934 held in cash and cash equivalents and $14,422,438 in short-term investments at October 31, 2006Exhibits. The decrease in short-term investments from October 31, 2006 was principally due to follow-on investments in private companies as well as capital calls for private investment funds. The Company, during this period funded additional capital, totaling $2,344,809, per its commitments to the private investment funds. In connection with the Company’s total commitments to private funds in the amount of $25,700,000 since inception, the Company, through April 30, 2007, has contributed $17,542,174 or 68.3 % of the total capital committed since inception. The Company also participated in follow-on financing rounds, totaling $2,163,682, for several of its private companies.

The Company believes that its liquidity and capital resources are adequate to satisfy its operational needs as well as the continuation of its investment program.


31.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Treasurer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~Application~~(b) ofReports ~~Critical~~on ~~Accounting~~Form ~~Policies~~ 8-K.

~~Under~~On ~~the~~July 2, ~~supervision of the Company’s Valuation and Audit Committees~~2007, ~~consisting of~~ the ~~independent Managers of the~~ Company, ~~the~~filed ~~Investment Adviser makes certain critical accounting estimates with respect to the valuation of private portfolio investments. These estimates could have~~ a Current ~~material~~Report ~~impact~~ on ~~the presentation~~Form of8-K ~~the Company’s financial condition because in total, they currently represent 76.62% of the Company’s net assets. For the private investments held at April 30, 2007, changes~~ to ~~these~~report ~~estimates,~~under iItem 8.e.01 ~~changes~~certain ~~in the valuations of these private investments, resulted in a $3,741,560 increase in net asset value from October 31, 2006~~disclosures.

~~The~~24 value for securities for which no public market exists is difficult to determine. Generally speaking, such investments will be valued on a “going concern” basis without giving effect to any disposition costs. There is a range of values that is reasonable for such investments at any particular time. Because of the inherent uncertainty of valuation, the estimated values may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material.

22SIGNATURES

~~Table~~Pursuant to the requirements of ~~Contents~~the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Application of Critical Accounting Policies (continued)


	EXCELSIOR VENTURE PARTNERS III, LLC

Date: September 14, 2007	By:	/s/ David R. Bailin
	David R. Bailin
	Co-Chief Executive Officer

Date: September 14, 2007	By:	/s/ Raghav V. Nandagopal
	Raghav V. Nandagopal
	Co-Chief Executive Officer

Date: September 14, 2007	By:	/s/ Steven L. Suss
	Steven L. Suss
	Principal Financial Officer

~~Initially,~~25 direct private company investments are valued based upon their original cost until developments provide a sufficient basis for use of a valuation other than cost. Upon the occurrence of developments providing a sufficient basis for a change in valuation, direct private company investments will be valued by the “private market” or “appraisal” methods of valuation. The private market method shall only be used with respect to reliable third party transactions by sophisticated, independent investors. The appraisal method shall be based upon such factors affecting the company such as earnings, net worth, reliable private sale prices of the company’s securities, the market prices for similar securities of comparable companies, an assessment of the company’s future prospects or, if appropriate, liquidation value. The values for the investments referred to in this paragraph will be estimated regularly by the Investment Adviser or a committee of the Board, both under the supervision of the Board, and, in any event, not less frequently than quarterly. However, there can be no assurance that such value will represent the return that might ultimately be realized by the Company from the investments.

The valuation of the Company’s private funds is based upon its pro-rata share of the value of the assets of a private fund as determined by such private fund, in accordance with its partnership agreement, constitutional or other documents governing such valuation, on the valuation date. If such valuation with respect to the Company’s investments in private funds is not available by reason of timing or other event on the valuation date, or are deemed to be unreliable by the Investment Adviser, the Investment Adviser, under supervision of the Board, shall determine such value based on its judgment of fair value on the appropriate date, less applicable charges, if any.

The Investment Adviser also makes estimates regarding discounts on market prices of publicly traded securities where appropriate. For securities which have legal, contractual or practical restrictions on transfer, a discount of 10% to 40% from the public market price will be applied.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Equity Price Risk

The Company anticipates that a majority of its investment portfolio will consist of securities in private companies and private investment funds, currently representing 76.62% of net assets, which are not publicly traded. These investments are recorded at fair value as determined by the Investment Adviser in accordance with valuation guidelines adopted by the Board of Managers. This method of valuation does not result in increases or decreases in the fair value of these securities in response to changes in market prices. Thus, these securities are not subject to equity price risk normally associated with public equity markets, except that to the extent that the private investment funds hold underlying public securities, the Company is indirectly exposed to equity price risk associated with the public markets. At April 30, 2007 and October 31, 2006 the Company was not subject to equity price risk normally associated with public equity markets, except to the extent that the private investment funds that the Company has invested in has, from time to time, interests in securities which may be publicly traded.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. As of April 30, 2007 (the end of the period covered by this report), the Company’s principal executive officers and principal financial officer evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) and have concluded that, based on such evaluation, the Company’s disclosure controls and procedures were adequate and effective to ensure that material information relating to the Company was made known to them by others within those entities.

(b) Changes in Internal Controls. There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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.

A special meeting of members of the Company was held at the offices of the Company, 225 High Ridge Road, Stamford, Connecticut 06905 on March 15, 2007 (the “Meeting”). Of the 295,210 units of interest outstanding as of January 12, 2007, the record date for the Meeting, 236,309 were present or represented by proxy at the Meeting. Members of the Company approved the following matter: election of each of Mr. Hover, Mr. Bernstein, Mr. Murphy and Mr. Imbimbo as Managers of the Company. The results of the voting for this proposal were as follows:

	For	Withheld
Gene M. Bernstein	233,400.121	2,908.879
John C. Hover II	233,400.121	2,908.879
Stephen V. Murphy	233,400.121	2,908.879
Victor F. Imbimbo, Jr.	233,400.121	2,908.879

Item 5. Other Information.

None.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits.

31.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Treasurer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K.

On February 2, 2007, the Company filed a Current Report on Form 8-K to report under Item 4.01 certain disclosures.

On February 16, 2007, the Company filed a Current Report on Form 8-K to report under Items 4.01 and 9.01 certain disclosures.

On March 29, 2007, the Company filed a Current Report on Form 8-K to report under Item 5.02 a departure of the chief financial officer.

On April 17, 2007, the Company filed a Current Report on Form 8-K to report under Item 5.02 the appointment of a chief financial officer.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	EXCELSIOR VENTURE PARTNERS III, LLC
Date: June 14, 2007	By:	/s/ David R. Bailin
		David R. Bailin
		Co-Chief Executive Officer
Date: June 14, 2007	By:	/s/ Raghav V. Nandagopal
		Raghav V. Nandagopal
		Co-Chief Executive Officer
Date: June 14, 2007	By:	/s/ Steven L. Suss
		Steven L. Suss
		Principal Financial Officer

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