TPVG - Earnings call transcript Q2 2019 | TriplePoint Venture Growth BDC Corp.

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Operator

Good day, and welcome to the TriplePoint Venture Growth Second Quarter 2019 Earnings Conference Call and Webcast. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Christopher Gastelu, Interim Chief Financial Officer. Please go ahead.

Christopher Gastelu

Thank you, Ashley, and thank you, everyone, for joining us today.

share XXXX. our to second for pleased of quarter are with results you the We

me Jim President with the Officer. Here are Board; Chairman Officer and of and Sajal Srivastava, and Investment Labe, Chief Chief Executive

future we I that and to your or disclosure financial remind during like events in you Before I press relate release Safe call, the direct the that under to attention be call future Jim, will turn federal Company’s regarding statements would performance customary which our law. condition, to to considered make Harbor certain over statements forward-looking forward-looking the this securities statements or may

actual refer Exchange forward-looking materially from results We you to law. ask not and most these statements. the Commission We recent that any our factors filings update required do obligation important to unless by Securities cause to with for undertake statements differ our could projections, or that

to during visit obtain any our not website today. on To SEC place copies reliance which cautioned tpvg.com. at only company’s of opinions please filings, call are management’s latest the Investors as undue made the of statements forward-looking reflect

to I’ll the Now turn Jim. over call

Jim Labe

and Thanks, afternoon, good Chris, everybody.

represented to the a term quarter, another only we’ve been quarters, that quarter. great using quarter good quarter second describe The several not past truly the the but was

equity of portfolio venture make our our direct as with part make in kicker, business warrant as that and as loans this lending investments also we results of in and we that and some the business well pleased continued that its we’re reflect value Our the ongoing the strong returns performance our we the the quarter companies. and of receive demonstrate component power

generated earnings than quarter a our and Once dividend. more strong we again, covered of

originations, great progress portfolio. size activities, and ROE, funding our assets, growth with making net the originations earnings growing on pipeline of We’re in our fronts all

has that currently increased almost encouraged activity number our reached we’re and IPO in billion IPOs activity particularly portfolio portfolio future in and since our highest by a IPO. are This companies and planning is our acquisition the M&A portfolio $X.X fact, the In well. size. as of

remainder in signs Collectively, excited growth well all XXXX the continued on for and remain portfolio. outlook the of for the we bode the

few highlights. a of Here’s the

share over an the quarter in Our excess than We year our perspective. from more earned per ago. earnings a doubled of of dividend NII well

at same a We yield quarter average with that on quarter last gain close post prepayments. portfolio the of debt quarter. IPO portfolio unrealized had yield our including had one as yield well XX.X% investments and actually portfolio exact last of we IPO continue portfolio an portfolio notable to We weighted attractive we our within This was weighted average a after companies from just well. another this as the our occur had

first increased for or income investment this over a same period of year XX% the NII also net Our the of half year ago.

our quarter this saw increase by $X.XX. also NAV We

outstanding by achievement ROE for certainly BDCs. a quarter figure itself gains Another helped net our in class total ROE an unrealized the and the income based on was all by for XX.X% a

or even have leverage and this investment these signed good like I’d in further. the wrap were for net number a gives ability point XX% sheets on pipeline, income running to for that to that to potential based ROE Our increased was all out we’ve To accomplishments leverage up, more additional capacity credit several quarter house last achieved been term XX% our modest facilities, well. as the of a quarters strong with us returns in enhance with the now the a only employ above and already we quarterly

unrealized Medallia contribute to and The gains. recent our IPOs greatly CrowdStrike at

high-end $XX this gain of CrowdStrike company opened its at its $XXX investment above the of the period trading It IPO as $XX.XX IPO XX. the while The under which completed of six was unrealized lockup after are we $XX During month pricing quarter, range. the end its more the our expected June raised on at second in million, was a million. quarter, on year,

to close at and yesterday’s well $XX unrealized represents as in $XX it stock continues million a of The of total. perform an share, gain

share the as million. addition, of over an after In at close mentioned, another company $XX $XXX priced quarter, IPO Medallia, the portfolio I they raised a and

As was price. nearly double IPO of close its Medallia’s stock price yesterday’s

many Aside from raising these acquired. have or continue rounds new of several other portfolio IPOs, with in also positive companies getting we to developments capital

more provide will these Sajal on specifics events.

stretch, use For our strategies to discipline. shareholders didn’t leverage, delivering our to we coverage or didn’t we have performance we need investment market returns excessive to this didn’t and dividend change

fundamentals We continue These business at to companies. years of venture since our the five stick a five lending years haven’t venture our growth little ago, ago. stage to changed IPO longstanding over keep day and

lack to in market no momentum venture stage ahead, growing continues look quarters demand remains for well first strong and and lending and XXXX, of be our of the beyond. large our evidenced the deal as to capitalize two pipeline. we of brisk the growth these As We of on remainder flow. by pipeline achievements years companies upon this and at plan venture year There’s the build for this

about is words. Our not for results, performance speaks itself. This

and from the And platform. together the period. have over month more partnership acknowledge platforms. in of XX as to and across and is our venture the In I that the well another anniversary that industry to of benefited Capital I’d at the and Sajal TriplePoint unprecedented year mark industry continuity XXth TriplePoint lending or closing, as which working look also two together, leadership forward like of least this leading XX we leading TPVG industry as years

to Sajal. now I’ll call the turn over

Sajal Srivastava

Happy and afternoon, good Jim. anniversary you, everyone. Thank

we companies companies closed and TPVG. million signed of $XXX term sheets the nine second quarter, at debt Capital, five TriplePoint the During million at commitments portfolio new to added with of $XX

Spark capital has Steve was Revolution Case’s raised investors. more first licensed Talkspace mobile than therapy psychiatrists. an with Partners, platform, patients and which of Talkspace, The other $XXX and is and Venture Norwest million Capital, online matching therapists from

is goods a these from investors. Imperfect Produce Norwest to directly Produce food than surplus system subscription more online through service. a other Shasta creating and Imperfect more million Partners, Venture capital Imperfect and has and Maveron $XX Ventures, by of consumers grocer, delivering an sustainable food raised sourcing customizable

Ventures, that capital has online other and uses and an load with freight Ventures, to is more investors. Enterprise million $XX prices of more from Transfix learning Associates, owners machine marketplace truck Transfix than and better algorithms provide attractive full routes. New Canvas Lerer shippers raised

a from Capital Sherpa Forerunner service Curology products. of Curology subscription-based capital $XX prescription-based and skincare million is raised Ventures, investors. direct-to-consumer than offering more has other

scooter as Bird platform. developing more has capital Accel a vehicle million electric from of and company Capital, than operates CRV Finally, other Bird, which sharing investors. Partners, raised a $XXX dockless Sequoia

for on level to Jim companies. portfolio funding result as average new we $XX.X our XX As investment achieved weighted of mentioned, million of debt fundings a XX.X% a yield this quarter investments record with

new on XX% That last up XX.X% yield is quarter. fundings from

also $X.X of We equity investments funded million in companies. five

our million prepayments, yield yield. quarterly prepayments, During contributed in weighted we to company portfolio overall XX.X% the portfolio average was quarter, $XX.X portfolio which XX.X%. had Without our

generates of meaningful we $X one always we’re back. amortization pleased and but we’re per Prepayments happy principal natural are way lender, a and get our our million last also between amount quarter month. portfolio a that to had capital million $X As

end portfolio Moving X.XX, was debt of X.XX onto average investment quarter. the prior weighted as credit ranking at compared the quality, the of investment to our

to rated initially loans due from our five strongest to to a X and the are X Yellow Candy new in raising rating As one system, credit upgraded under one rated two. being reminder, capital are Orange continued activities. Mind from rating with loans generally was improvement

where Orange due X as have Yellow was equipment Broadband Cambridge downgraded financing company to general from well X plan. Red strategic and Technologies, to only outstanding fundraising MapR downgraded Roli were or performance a in delays the X X quarter. from below during White to as we activities

As discussions. in reported MapR M&A the is active in press,

CrowdStrike quarter, almost As traded Jim and since successful IPO is XX% mentioned, up had its during then. the

QX, we and had in completed IPO rounds post-quarter During end, over million trading portfolio well. six Medallia equity its been and has companies private of $XXX raised also

into a milestones $XX dependent becomes of before over $XXX.X Alongside our portfolio, will totaled the XX of companies potential XXXX, commitments have the the unfunded during and record our to provides our At expire $XXX.X expire company’s QX, few which drawn reaching growth million level if $XX portfolio million next capital near-term end great will million available roughly unfunded we strong million XXXX, quarters. that upon in expiration. XXXX during to them. not million commitments to the visibility is backlog of expire investment will prior $XXX

lock-in to renewed We with by to the movements existing our the and look additional million enabling anticipate take $XXX the QX and added accordion feature accordion $XXX our into advantage increased million upsize to in $XXX from funding as we we to to variable quarter, facility rate Fed. an warehouse lenders million. capacity tapping us During of

warehouse As to we free up and long-term debt approach utilize balance capacity, one and sheet our our the use look up, leverage. will times lever as way we diversify to

quarter-end, fair down XXXX. a debt in value our basis, XX.X% of represented on positions top of As portfolio XX.X% the investment five QX total from

make co-investment and exemptive with the portfolio, thanks receiving financial flexibility in growth, business. progress we part to vehicles, meaningful capabilities. in gives as continue We diversifying Since co-investments of to as our TPC’s order, utilization XX has our made our TPVG as us well this overall portfolio proprietary scale

level the of exit year, halfway we that investment portfolio portfolio, substantial our given in and the of year-to-date closing, record activity our are pleased excess In we of our are the growth NAV on NII companies. dividend, by at mark

the are down, focused quality. We for credit finish on second and strong a on our half maintaining of the heads year

to key call I’ll some achieved during over the financial metrics of quarter. the now Chris turn highlight to the

Christopher Gastelu

Sajal. you, Thank

second strong by TPVG. Jim this As for another mentioned quarter quarter was Sajal, and

increased the income was to XX.X% of XXXX. million, investment and $XX.X total quarter Second it compared second quarter other

generated including compared XX.X% other quarter This and during without. second a yield of average in XXXX. to the portfolio investment weighted activity, quarter, of prepayments the XX.X% XX.X% XX.X% Our and

due investment in the interest increase to the primarily a total The prior of income relative impact favorable year to rates. lesser was growth portfolio and the rise to benchmark extent in

of incentive and million, base administrative Expenses of fee management general were of $X.X and million, during quarter $X fees the million expenses $X.X fee of million, income million. consisting $X.X and of interest $X.X expense

$X.X Expenses incentive increased totaled associated was average management $X.X of management administrative were the higher of million, incentive comprised and million fees XXXX and fee of in general expenses base of debt of income growth, which approximately interest expenses largely $X.X of million. increase they higher quarter outstanding million The asset fee over $X.X related performance. and million to with and XX.X% related expense, fees, when $X.X impacts in second

relates the $X.XX the in share share a account and NII prepayment per driven $X.XX by increase second a on to compared quarter $X.X with income higher quarter investment second NII per to Net growth, the XXXX. share up XX% portfolio level or in while the was $XX.X share second of income basis of decrease in per of per the million The or for higher quarter share in realized was million XXXX.

nominal net And we of mark-to-market portfolio. our $XX,XXX had quarter, activity the realized exchange which non-dollar of on per consisting debt effects denominated We investments. gains million foreign to net or in the investment share $XX.X of second losses related quarter on had unrealized during $X.XX the

earlier marks call, mark-to-market fair across price offset was in CrowdStrike, and value on As holdings to appreciation appreciation discussed equity the traded portfolio. was our primarily the somewhat and the publicly due by

period. for the year-ago in million $XX.X per in with or increase $X.XX million share a was assets $X.X $X.XX net net or compared the share Overall, quarter

average of XX, quarter, XX% ROE income investment of compares ended we for an the and XX.X% assets basis. This and year-ago and generated quarter and quarter. an annualized return six Net of average to equity equity X.X% ROA a the During is for on on on return XX.X% of June was XX.X% the both percentage XXXX. average months

long-term warrants turning quarter. Now $X.X of $X.X XX debt funded XX equity made companies and repay balance to in to outstanding $XX.X acquired obligations of companies We companies, in sheet. prior million We five the ended fair we had during of companies million investments to million XX.X% the investments and four million up at on debt value, amortization the the quarter from in $XX.X with of had XXXX. $X.X up remaining the $XXX million year-end XX.X% investments of prior million. All amount portfolio the of from told, year maturity and principal

other $XXX At value a quarter-end investments ended the We facility, cash XX a quarter-end, million had with of our restrictions. $XXX.X XXX of $XXX.X debt of and and $XXX.X cost million. consisting of value undrawn liquidity to $XXX.X of with of and at $XX.X the total company’s basis held and a The of million million basis companies in subject of availability we fair base portfolio $XXX.X million. quarter cost million fair revolving million borrowing under credit

$XXX long-term at QX million ratio for portfolio capital. and XXXX of consisting rate versus approximately $XX outstanding is credit the million our $XX maturing essentially facility. which of X.Xx, the under Total sample a flat in us expand revolving fixed without drawn This notes leverage us borrowings and capacity gives we’re million put additional quarter-end, to accessing of

We ended and with This $X.XX the $XX.XX or assets $XXX.X $X.XX of share. is year-to-date up quarter net million from year-ago. per

we dividends. consisting our During per quarter, quarterly share second $X.XX distributed the of regular

quarter. of dividend as to on XX, pleased a of the of I’m quarterly December a dividends record marks quarter, $X.XX spillover XX over-earning a XXnd is that This result per represents of announce for the consecutive as of Directors distribution ended fiscal dividends XXXX. The our year XX. share in Board of declared to the August which third XX.X% payable stockholders September the

maintained quarterly distribution or rate. increased have our We

back Jim. turn now the I’ll call over to

Jim Labe

At Thanks questions. open your be happy you this point Operator, line? we’ll please again, take to can Chris. the

Operator

comes [Operator go O’Shea, Fargo. first ahead. Your Instructions] question Wells Finian from Please

Finian O’Shea

afternoon. Hi, question for Roli Candy. good on and quarter the couple names guys, anniversary. Thanks Question a portfolio and Mind on taking the downgraded and of the congratulations my

have You footnote that due. those loan of become part past structures

comment kind mean obviously venture environment, your given that more find some due perhaps. but of sort might to bid on from is that solution of high on Thank level So of that you. you’d holds new level, per capital sponsor a a for have game the what of a a companies venture the se. sort can ground And couldn’t plan of first you catch or past loan then, for robust mark according sort what the value company, still sort

Sajal Srivastava

jump I’ll in. Fin. please Hi, Yes. start then Chris, and Jim,

or in generally, and principal to there full get be occurring the we and delays when And post helpful answer may that activity, balance. expectations delaying certain we then the of sponsors question catch can. where be to may event payment situations – strategic So are up deferring in payment collaborate Fin are those your either payment our added fundraising for or with

once and that’s So the And periods those delay extended our defer processes occur. rounds or happen. may the then is they to generally rule we payments for do strategic up of then or during thumb caught

Finian O’Shea

at in delivery sort of you well. for some distributed Very one mean, food. Thank end. sense which name Imperfect of haven’t lower well And of do least on perhaps that you then sounds also I has – we another color. can widely the And businesses, It’s very these like the I produce. services held is not headlines cases. on name, million, on mentioned up think the raised $XX Those

companies kind Can I color think, on that the intellectual some give their you’d name? finance typically that spend. value, you value us property asset on of of life on the

Jim Labe

Yes.

activity, is, public and generally comment first, on capital our talk to consumer share Let comes Maybe more companies in raising guess me I Fin maybe specific. the we domain. that’s it when information only

of many actually be not have not companies, been announced, may that, announced. the those to extent for And our may so rounds

preempt not and generally And raising to any capital activities. company going their so we’re

that only information And so, equity is round we publicly activity available. again, disclose

rapidly Secondly, that look of if revenues again, $XX minimum to thesis you companies growing, million. core our of are

that growth So ridiculously in e-commerce have rates basis. revenue or historically that companies capital of as capital are and scale we efficient particular or – value of companies significant most raised may are capital, look consumer the their enterprise lower them equity publicly and bases have and amounts to those raised equity and beyond

approach capital news built. off gained companies some you’re last have ago, and online unit piggybacking that have companies. you’ve absolutely growth many grocery right. is the learned the names years efficient, companies took of inefficient. I’d infrastructure So and of the And they’ve in point were just the freaking great from investors. mentioned, generation grocery the the support XX is, our be economics more say of to next by say are impressed solid great knowledge the my you’ll and general, the I’d In particular, be of takeaway profiles given

Finian O’Shea

post more you may. we or as XX you by we additional post quarter were Sure. which invest? I exposure color. June On rights to quarter go there what IPO-ed expect the noted, just for should Thank Medallia, additional if on profile. small Would And one see the we and any

Christopher Gastelu

Chris. by it’s terms holdings. Fin, our of should June the XX you Yes, Hey, in go profile

Finian O’Shea

you thank again. right, guys All

Operator

The next question go comes ahead. from Matthew Nomura. Howlett, Please

Matthew Howlett

Hey, guys, congratulations. Thanks for taking my question.

said, walk know million on you some term the guidance obviously the want you of to the $XXX look out there. prepayments at debt. utilize point, through to I in back going Just funding. gave hit I just there’s year the you’re then revolver to at for think, as to know you earlier million going $XX of And to the your some half be year,

maybe any and I I So look said – the that year? sort always walk end get still at prepayment more it that, to leverage up long by we’ve prepayments of one on know how to blend but we XX the expecting, will you just me could through, take plus funding mean, of you Can that there target. is clarity see

Sajal Srivastava

then I’ll please in. Chris, Jim, start jump and

So of year we half absolutely hope no we’ve change this $XX guidance given for quarterly in second for high the terms fundings million, million. of $XXX as it minimum the that

half year-end for capital know, and the of nature. time year busier as of of you the year things companies of is for financials, and balance the the raising boost As they audit our second kind activities, portfolio sheets that

very second meaningful confident half of feel portfolio for to the the over continue year. we growth So

about feel quarter. prepay or regards on QX. a three QX, had two think, with to think I I average prepays, three to continue We’ve one obviously we in confident to

average to in here QX. not to we any prepayments We have one. no those had – far using we’re So have so not currently

any the towards now have we backlog visibility materialize that again, are we the And the prepayments knowledge year. with pipeline, of of those But unfunded usually the have commitments quarter. no things end target given yet, leverage known as to the of underway. We of end the of the by the feeling right and the getting

Christopher Gastelu

add that. really can’t to I

by just and and this – part some our is good I’ll penalties one So prepayment to time. return like contributors and of been by same sometimes and and prepays one model as expect do to guidance pickup embellish per again, saying, we the obviously, quarter great two reinforced at always

see strong to That’s here, model. the and year’s pipeline, continue portfolio the Given we’re growth in but the end. going by

Matthew Howlett

with I a see in you out couple the back that to tremendous Yes, of said the a you debt the you recognizing it’s the and increase since sense facility. there term term market years an when bond, bank you appetite of certainly, been some Any on think are that improvement access years from could the ago? and momentum your to came couple and

Jim Labe

Yes, question. great

So indicator are I’d one is trading. say is a daily our trading Well, par. bonds above good

indicator. good a that’s So

We glad. today’s rush not fed leverage did to We’re given announcement. up

So to to capital that in not again, say we’re discipline time where continue we’re stock we’re don’t we’re and show thoughtful in comes pressured funding going way we I’d raising, when capital be may just like the on the when just because doing to to our of I it raise terms say, a business. based be way, certain the to bond trading needs it of or a trading the maybe certain

lending single got providing the our venture long the warehouse us, in support We’ve stepping credit term industry. great largest lenders again, up facility from facility and

of that. So we’re proud

are that parties have accordion. the to help with interested We us

be diversify I And long focused debt, a we’re so as pursue we the it it the utilization. We’ll think, again the up, sheet. securitization? of best building just term that. then And then take drive quality on how to and to is So mindful to right it balance way scaling explore Is we’re what’s out. portfolio, we’ll excited

Matthew Howlett

you were a question, And like Great. know something real platform, part any Well, maybe come we stable – realizations out. sense in have we’re in specific get like the there. And last I but could cycle. of registration can’t of any the we CrowdStrike you guys lending but give but know know, small names, the in then these excited portfolio? what coming every right some get warrant seems when you time, you what’s can’t I public, on see the it And I

curious the terms of seeing Just events on on portfolio. what liquidation in you’re

Christopher Gastelu

a what – it drive I here partners. news our end VCs our mean, is Yes. of activity. it’s call. quick exit for They’re I’d the day, definitely – VC that No, They’re say the our in entrepreneurs are not great the that at The the our killing. make the and long our ones to

further in are public’s drive and companies. are to that working funding and there’s speak mindful to exploring, entrepreneurs And encourage some VCs portfolio Jim the the as activity activity. multi-billion those of the investing see would said, M&A. regards environment can think some in have Google and in with companies those there see are our our it. that say, doubt value considering make current that that to leading the and you, on larger they’re and and on no exit the of maybe I So I exploring potential basis exit dollar But are the events. in would realizations investments, interesting ability definitely others you both on I some private industry chatter

Matthew Howlett

Great, guys. a congrats. and Thanks lot

Operator

Casey Please next comes Point. from question go Your ahead. Compass Alexander,

Casey Alexander

years on this quarter. and and congrats the incredible XX again, afternoon successes good some on also Well,

know I given fee think unrealized the gains, the no explain gains you you the answer why but I had there’s capital incentive to did quarter? this, in accrual, could

Christopher Gastelu

Yes. This is Sure, Casey. question. a the thanks and for Chris

necessarily the cumulative the short seen of that see a it’s did gains, we threshold to in up sheet. lifetime revise our a see that that some answer – a you essentially the the hard ago, the couple for because balance and that accounting little of test we yet, show so you haven’t is discern maybe years don’t So as

Casey Alexander

gains can too, balance tax sheet? still you have you even not apply So they’re on though book that the losses to

Christopher Gastelu

– Yes. not as you that tax. flipped well, Right we’re kind now, of to subject

fees incentive here. incentive talking I capital Well gains We’re mean…

Casey Alexander

know capital gains? the how Not sheet, balance how been to model would expected we on

Jim Labe

and – of we’ve losses, It’s with realized simple gains incentive offsetting say? to fees are gains, way the are had associated these historic those simplified. losses maybe or think is the realized Chris, capital these that I Yes,

Christopher Gastelu

yes way, Another

Casey Alexander

is Right. you part But do done, had was when how of when Olson there? those that losses without balance sheltered it this with and this conversation we this, that mean, remove know know much don’t from was I know I being on this we I the or had balance the we the sheet, sheet, not. conversation Andrew a what

Christopher Gastelu

Yes.

can we detail this but quarter. maybe So get gross up about more the to was it we offline, think prior was million I $XX had, numbers

So you could see that this quarter didn’t quite overcome $XX million yet.

Casey Alexander

Okay.

Just in correct in [indiscernible]. Chris. I there me and wrong, about statement the realized if I’m cumulative But a think is Yes, Q, our the ahead. footnotes the losses go

Christopher Gastelu

I was off-line we to going say to detail maybe get can more

Casey Alexander

Okay, fine. that’s

you the Secondly, Do quarter, trading a second IPO the see mark price can of know mean that XXX,XXX. mark we related Medallia? for to didn’t terms July. it’s I week Medallia of the where share now, what in but per the at was until happen third

in to So XXX,XXX of a relates tell that mark. it’s for to what us terms hard

Christopher Gastelu

Yes.

call in were shares if give to coming that us. at but And look and quarter. confidential financial they some the think factor quarter, that of gives posted respect and publishing of statements, the public in So at end. it even little the the that the I on just before you relative the was there, number I with off approach answer. that they that, holding bit, rules occurred up were just And the the had known prior striking to a able during as we range price think they filing to that relate IPO that going to Since the might’ve quarter were outcome fair to you mark value IPO I’m maybe financial the

Casey Alexander

it’s the sale what process, of at valuation but residual do carrying compared of a of end in that you MapR equipment the quarter? is understand you sort know under is Okay. the – equipment the lease that that the On do value to I you’re what know some the is it

Chris Gastelu

Casey, critical equipment, Generally, financing hardware, we’re center servers, mission equipment. data furniture,

for hardware historic recovery value, generally potential our anywhere the things at residuals if fair so expected that original from put costs But look the lease value nature. factoring is of to XX% data. we quarter residual are mark financing of in, And that hardware M&A XX% from the speaking, you payments and

Casey Alexander

these And down for been have while, a quite right? Yes. paying

Chris Gastelu

Correct. Correct.

Casey Alexander

Thanks okay. for Yes, questions. right. my All Thanks. taking

Chris Gastelu

you. Thank

Operator

question comes go Nolan ahead. from Your next Christopher Ladenburg with Please Thalmann.

Christopher Nolan

just was Sajal, $XX – to that $XXX before million prepayment. not portfolio million for funding discussing, is for growth, the growth that

Sajal Srivastava

– That’s thanks prepayments. Christopher. That’s Correct. funding, pre

Christopher Nolan

Okay.

So, million guys to growth $XXX $XXX in targeting still you’re are it below for sounds the you like million or that? coming

Chris Gastelu

Well, million fundings for of of the here to roughly $XXX prepayments had we’ve today. by million offset prepayments $XXX million $XX total year

Christopher Nolan

heard you. you long-term about possibly. in that guys your talking comments, Got I using And are debt

Given the balance you interest or… expect more rate to the facility we least environment, use I credit should mean, of actively XXXX at for to the just the

Jim Labe

Especially, right. yes, mean, today, I No, right. after Yes.

opt to funding again, a So a fed bps, for we it’s mean sufficient so want a rates. don’t over bps with sufficient have right to have make we you us, with of we news the want I – balance XX.X% it’s indifferent We it’s XX yielding – good liquidity. portfolio, we’re XX sure in bound somewhat capacity. and want to make optimize. sure is changes

means to rush be it deals. into raise to more capital, so come and But yes, we leverage expect cost, down. higher we don’t we of mindful And sure deploy want to long-term lock rates more ourselves capital deploy if making

Christopher Nolan

you seeing the more Are market? venture question. entrance debt into Final

Jim Labe

wrong the way – since anniversary. I XX across people and years coming our want ask without question almost now it’s that a been month It’s to say every

the which all. of the leading – serve just been associated change In some with no about defined At into lending capital to venture market again, no it past is successes ones with has several science folks of decades. a there’s of group kinds in select all or least working there of always So, business talk serve, at there’s that venture we in. there’s investors, change tech biggest imperceptible, speculation, life always jump to we the the so-called always the market

our So and our our maybe, flow market, looking thing is business. tell and but out in the in that going can not larger market our pipeline by you at on this in deal

Christopher Nolan

Thank you, Okay. Jim.

Operator

Your KBW. Ryan next Please ahead. from question go Lynch, comes

Ryan Lynch

thanks and taking afternoon, good my questions. Hey, for

debt, it talked I’m capital first like this a you’ve that and next other we any couple companies very pre-paying taking are move with versus of with about those growth. obviously, capital market maybe could benefits, sort the a the open and IPO names, couple that quarter probably, markets about benefits or you because big The which quicker, venture one, in open, saw just there venture CrowdStrike in would and that of some portfolio be IPO I quarter issues, market hurt are general, saw market. are market, the presents healthy venture wondering up markets seems very can a on IPO think but CrowdStrike. healthy and the dynamics guys because IPO

are and to through, positive the trying of that really with struggles obviously think but healthy are occur some IPO a venture market some market dynamics, Just what there capital today?

Jim Labe

Ryan. very question, mean, I thoughtful Yes,

say is actually to sooner. to So, faster shows M&A or that run takeaway potentially that causes event to I need the you faster, shows it companies see is look data And faster an that when way move other it exit to our grow it would what we we at our faster, interesting – pursue accelerate, IPO robust right? activity, and hey, and

to does mean? more, need what they that that capital. in spend order they spend burning are so means companies that more cash more These And need to

an enables venture then equity like more growth greatest, value for is setting evaluation really proposition those round acceleration without that’s we the M&A to basis it so where would because an particular of an would companies in that the argue IPO. capital – be what debt And the which for or the does, raise

to we think accelerate a causes demand So, companies kind I’d high of there’s want level, as growth. benefit it more as say

On journey may as be point companies these the for other around be as you though, long. long may out, the hand and not not as

for may back long-term come it’s But at so data, M&A down And or if a road. bit, years. a nine that delay off it’s and still between cut time average venture the and although the IPO potential a the customer you company backed for again, seven look little

was so not times, that a prior And exit that funding, or year two acceleration it’s so initial three. the like from to event where

debt. venture for opportunity strong represents still it So,

does though point XXXX and saw equity we’re extent go if the now last in utilize to and unfunded commitments top then maybe path debt, drawing either choose to not companies financing equity at the environment delay our that cause prepay then set debt a think the we all. off in or prematurely, in yes, as them of is to to potentially here that our an I valuation robust rounds

a And the and of little pipeline we’re to so causing faster feeling the more itself it’s that more pull seeing, really ecosystem points good capital just at and that kind and the given levers, multiple we’re again, it’s least capital. burn need up, run entire but data

Ryan Lynch

Okay.

of year-to-date that I million. One sense. I makes have million helpful. $XXX about question look commitments highlights, other It’s answered. very $XXX the about year-to-date Thoroughly new Now guys just closed at funded had, you if and

also, then through those you that. with maybe, just new down you a percentage up road? of guys And kind historically, of can If funding walk milestone So, when percentage actually the ballpark they’re end know what commitment, figure what you based. those I commitments, make of a commitments some have

obviously, category. the So It of about end milestone, can funded. the a doesn’t talk make in reasons funded hit had But you the other won’t they some it up get maybe, commitment? doesn’t why their company eventually if you

Sajal Srivastava

question. Great

start me So and in. let Jim, jump up let

that is say equity great TriplePoint companies I’d around Ryan, everyone, the for point lend for financing. of raised recently fundamental fundamentally are So for data the we to approach

to So, that cash. companies we lend have

closed strategic the XX we some they’ve our availability milestones months companies period It capital achieve LTV validates with higher round, then IPO recently of that after CALC, And to raised equity in through M&A. be that we that financing. more financing, so enterprise to to more them So, command a part provide they give capital, your minute so – validates or can use have investors, It months burn sorry, be we in and that’s XX around those it equity not companies are value. generally venture they’ve through to be to validates an approach last burned right? round and supported, – lending runway, commitments it in our that of debt valuation, bridge and next a it a that more that our

next fluid lighter valuation that event. them that maximize we’re financing help again, for So to

to our with period. they that the sometimes, companies use we general of the the lending happened the approach of that approach how fact thesis the cash, what end or availability lending So, to debt, so of typically the delay middle time our typically they towards the and or that

we six to we we between day liquidity have then of meaningful when and that of expect commitments. some commit period the maximum if when will And correlation utilization and majority the percentage draw of utilization generally, towards small one the availability the it nine, utilization before and there initial again, so And expire, we we’ll is to and month that accompany commitments see a unfunded our because expires. why expect of close, they again, that’s to end unfunded report think the not the because a expiration the

end I availability the get would unfunded was would before say our used rule of of say we XX% to of utilized the period. thumb the commitments

in, environment I unfunded data the later come debt then use of private that’s robust of analogy parts or activity rounds we to the that XX% halftime those in then the for and quarter. don’t little they equity third and financing utilization generally, commitments, and like we in the get in think environment raise to the more us then XXXX, given but you availability saw months expire. like robust fundraising early, a equity we’re them XXXX XX it’s fourth bit they when or back when we to ask they extend in available and companies utilized XX% terminate or have as may the need revisit before shows,

Jim Labe

Yes.

acquisitions it think so covers some use our But I uses, well said that’s covers other for. the these that forth in companies think well. very and then lines I that

Ryan Lynch

that’s the today. color. a makes had sense. that That And are I good time. questions I Those all really the appreciate quarter, great

Jim Labe

you. Thank

Operator

Compass next ahead. Your Please Casey question Point. go from comes Alexander,

Casey Alexander

Hi.

does take it knowing fed immediately at take effect or did Does third today end a your affect loans? so follow-up, that and effect quarter? prime rates does of on Just the that cut effect the the rate, when the that quick take does it

Jim Labe

that It a XXXX, they’d that were and prime – X.X% floors. in they extent mind, Okay. immediately, That at X.X%, keep have prime. loans to lower in were prime said, but to they so do your have originated have all for at prime prime floors would in the set the they loans, we takes extent would earlier effect companies. current then

environment we positioned So prime rate think floors. we’re well portfolio in decreasing yield that’s a given those the to withhold why fed

Casey Alexander

Okay.

right, you. great. So, all Thank

Operator

Jim any question-and-answer conference the over session. hand for closing to our would remarks. now to back like concludes I Labe This

Jim Labe

and XXth here Thanks. appreciation of again the Growth expressing TriplePoint support our I’ll co-founders the interest you we half I and believe enthusiasm XXXX again, hope and our by a between and my be close going year. continued excitement what speak year I heading in of Venture your and to share to to is finish will guess, soon. truly all Anniversary back month for we your Thanks the everyone into attending strong for and

Operator

The for conference has attending now concluded. Thank presentation. today’s you

may disconnect. now You

TriplePoint Venture Growth BDC (TPVG) 31 Jul 192019 Q2 Earnings call transcript