TPVG - Earnings call transcript Q4 2020 | TriplePoint Venture Growth BDC Corp.

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Operator

Good afternoon ladies and gentlemen and welcome to the TriplePoint Venture Growth BDC Fourth Quarter 2020 Earnings Conference Call. At this time, all lines have been placed in a listen-only mode. After the speakers’ prepared remarks, there will be an opportunity to ask questions and instructions will follow at that time. This conference call is being recorded and a replay of the call will be available and an audio webcast on the TriplePoint Venture Growth BDC website. Company management is pleased to share with you the company’s results for the fourth quarter and full fiscal year 2020. Financial is Board; Chief Chief Sajal and Mathieu, company Chairman Officer Investment the Chris the of Srivastava, Chief representing Jim Executive Labe, and Officer; Today, Officer. President and

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

reflect forward-looking website materially asked to company does these of our on undertake filings, the by important during the with required Commission statements. any undue place visit latest You’re filing not for any unless reliance update obligation which projections to opinions Investors differ refer to factors or www.tpvg.com. law. statements that most company’s actual forward-looking from copies the recent of and cause statements made Exchange not please To obtain company’s cautioned management’s The only Securities any at could to SEC are call, the today. to as results

Now, I to to call Mr. the over would like turn Labe.

Jim Labe

also in core Good for differentiator dedicated and year, which a quarter and unprecedented for us support opportunity operator. thank year our we and their collaboration, and last to and our venture commitment well you, entrepreneurs a and call. acknowledge afternoon capital our partners as as us this was unrelenting fourth driver take remains success. critical joining professionals an for clearly ongoing Thank like year thanks earnings for our for XXXX end XXXX their would to

The quarter-by-quarter fact, pandemic, market XXXX. our very continuing playbook the relationships great to the a steps Venture of lending already. quarter venture highlights are January, this to pipeline is continuing offering; team portfolio, position our our off XXXX of our off with significantly we portfolio Before and the we we underway. continue mention big results past events story bar the revolving we the the credit $XXX million with private I'd at We're year have plans the The our that about of for none. see platform successful and pleased capital progress notes The all Monday, for and unique in facilities year, under TriplePoint platform, last select TPVG further made our global our to in way also our closed part amid all are to races is coming liquidity long in the and and and a This including deploying XXXX, advancing the TriplePoint in and in and capital TriplePoint investors. strong to deals growth. standing grow financing we experience demonstrating talk we XXXX, in and portfolio like the this review in the our expansion work start strategic This is in significant the strategically evaluation year. resilience of of power are quality in performance venture taking leadership the to upsize lending

years. but We of last wanted of gains capital million performance go and will I Chris credit into the this just fact losses, distribution highlights. basis result, in share served end as the year. of XXXX While not realized only to the and Sajal offsetting $XX key almost detail the few quarter years last our shareholders making greater year, our a time gross to special while another to it a This in made we six over generating significant a special shareholders, third was have income spillover distribution importantly, also that for into more allowing

We the also year. our earned fourth for in year fact, for earned we its have each IPO important This successive in and as has a a since distributions the objective. earned also over year of was this year over Cumulatively, unfolded. our distribution the over earned amount and over increased quarter date achieved a row dividend the that TPVG our

year, to our diversify During strengthen the we generate portfolio and strong credit focus and yield our quality. further it to continued continued its

give transactions liquidity our The progress more into. capital enhanced beyond. the I and a mentioned and last financing we for Sajal stage Finally, set through which has year during made of significant as markedly XXXX we will number a Chris year, now the position lot

our funds time. capital firms we're $XX strong all off billion from know, is raised investment of stage Or its collectively conditions, reputation remain growth the that. lending, demand raised strongest capital Further highly activity topping Today's NVCA, States venture venture our venture investment venture $XXX financing we seeing favorable companies venture the robust. management Given approximately the Venture the well. Association, debt According several capitalize for as in includes of market to probably folks first venture the market The on $XX platform, select differentiated capital our to capital year, our broke year venture coming new solutions. of well-positioned which is relationships and select most capital United record another billion the and of ever best-in-class more investors, the billion Capital for experienced XXXX, and are last record, team investors on long standing National power with whose than our and in as

count was invested the spike last XXXX the here For stage than exit in particularly events The so stacks stage have market venture half, strength was of favorable for market including XXXX, IPO companies continued total into the which from in liquidity market emergence $XXX estimated last fueled VC-backed further year. billion and more growth the far late at of has exits, as conditions. covering the our venture XXXX that XXXX. unabated operate more companies, in deals venture than And the deal capital segment,

remain venture XXXX strong. We and to the expect demand have adapted environment new behind companies to Most is them. for lending

be may Our their post-COVID and the what emerging year plans to bullish companies remain opportunities on stages. this the seem and soon

we landscape, have that live, year the the are people due and how survey we new to investment last use identifying opportunities risen work, technology. changes over in As

As resilient to is and technology we highlighted sector continued throughout the from extremely in expect pandemic, the benefit the space. investment this

real collaboration exceptional and and As with companies that the will power we internet, primarily with in and technology, experienced in provide are these companies going Many cloud-based solutions, technology-driven our loans the several and opportunities. growth invest in team, other drivers continue these experienced enterprise, reputation, our services, like to TriplePoint observations. businesses, us We when comments goods sectors for security, of be sponsors' into major and combined closing believe direct-to-consumer all outside and translate estate to of industries. of environment. up some forward new platform, this wrap I'd exciting and our virtual factors

We are times enabled of advance proud also future important during strong objectives that the to that our we in drive took the these will past steps uncertain year post and us results to success.

look heard and our we to growth year accelerate exceptional provide are returns. positioned with to advantageously to we as Specifically, continue ahead, long-term shareholders you've the

some business fundamentals business extremely of very to made lending platform than have scale our the have year and expanded active products and today our to our for promising very advantage ever and venture and forward market, strong new and challenging with financing us emerged XXXX Our the our of we've and and them. take of used venture look a position excited today's the teams been. with continuing front the work venture model, capital industry from reputation-driven portfolio to whom investors cases We closely venture in now companies enhanceability a of ecosystem prospects many strong are in more select are entrepreneurs, leading to strong

While old we also times we disciplined progress, the and abide returns. of will R's, I four now references, TriplePoint's relationships, and are the Sajal. pleased to during reputation, with remain will good call over these turn by principles to continue our

Sajal Srivastava

Thank afternoon. you, Jim and good

XXXX, a time. period As with during very performance pleased we our back to we challenging were of look

perseverance Jim having XX-year by track well-established Capital. pandemic, proven a I playbook record and that together the together. Our have outperformance many result of a direct team we was the quality on to of TriplePoint response been more platform, fronts before, our investment through so together and and global and periods important, sponsored in significant than put being the regarded highly equally volatility of The

our stage further for growth XXXX strong $XX in capital platform raised particularly and take really approach investors the playbook companies, and in XXXX, we focus us a benefit quarter-by-quarter our and our portfolio, our differentiated particular, set liquidity. portfolio relationship, and million see with give our a strength. venture facility our and resilient TPVG investment-grade lending Our up our to significant QX, to venture on to well sharpened provide off benefit was whereby offering equity coming as strategically weather sponsor approach, our debt the first as of financial supportive a backstop began our TPVG enhance storm relationships, QX, the a actions and of to up to our to team, In stepped took despite

finish strategy QX never for every TPVG throughout at consistent $XXX paid to to off credit our companies shift in that with we the see companies. demonstrated $XX but million the team has While activity we more here volatile differentiators received venture -- XXXX our we to capital venture and debt strategic up with In stage importantly, the so equity valued was $X success income of in six We related we three of core set companies appreciated began increased planning, signed and at based feedback portfolio million sheets strong equity lending quarter yield. gains to investment million warning growth XXXX, excess in of QX generated. we portfolio term for we to QX, More venture and began during of and companies to needed commitment portfolio real-time and offence of on TPVG. a XXXX. of specifically, both fourth year, in partners, continued TriplePoint generally in our use half warrants The growth Even made Capital us generated distribution during quarter realized $X.X growth commitments and the XX stage investments million closed quality of the from with our a the period. again, facility, speak. to

sheets $X.X million carried at weighted a investments refunded average debt in to of the companies, representing investments XX.X% of quarter. quarter XX% the $X.X year, portfolio third an annualized million from $XX term at debt of quarter For value with investments and sign representing of companies debt stage XXX of close the and full companies equity one We venture growth investments TPVG. in we acquired XX TPC million increase million commitments The million the fourth during with $XXX During nine made funded origination. yield

year During to in average the investments we companies of portfolio $XXX with in origination. XX weighted XX.X% a annualized debt funded million yield

we and During had of $XX weighted result, of QX, yield we portfolio million, as loan overall average an achieved XX.X% for repayments the quarter. a

core weighted average XXXX, overall In in pre-payments, we pre-payments, resulting was portfolio yield. yield for portfolio [ph] company portfolio the an Excluding million yield XX.X% had in XX.X%. $XXX.X of

for across largest XX sub-sectors, Excluding our of pre-payments, was of yield application represents nearly year, portfolio the business companies portfolio. full XX.X% XX with our At our end in the spread the portfolio concentration software, core which XX% year. were

mentioned, Jim to a in activity testament continue equity our strong fundraising is we which see portfolio, As quality. its to

XXXX $X five billion over portfolio months or over of having brings This companies capital. our more $XXX XX of to XX portfolio quarter, of during total the companies portfolio million raised than more XX% runway. capital cash our companies raising of with During

generally credit initially. to to rating system strongest strength X.X. on with flat loans quality, credit was of essentially portfolio the one Moving ranking the average Under being debt two from -- loans are and our are new rated investment of one with the prior our weighted quality quarter's rating investment five, rated

January of from and two, category During from one one company category company closing result upgraded portfolio two removed two Knotel full. as loan company three, raise and to to complete to company, a our a sale. Knotel their The the from filed impact for raise from unsuccessful company category an strategic and financing in of from fourth three category its downgraded of five attempts given one was external was category after pre-payment was from three in one their downgraded to three and continued company We XXXX. the in a round was to financing; upgraded one; acquisition both We a as quarter, downgraded -- COVID category quarter one to to bankruptcy five. of of result

and loans merges. XX% potential will we a cash to However, be bankruptcy prior to company process recovery completed when our the a is new sold third-party filing, and finalized for equity the kicker, which the

finalized. Importantly, the in like mark our sale not when from the to quarter only offset improved loan upgrades equity other Unrealized unrealized equity the and I unrealized represents losses on well as cash and goers, as Knotel would from our potential situation that performance other and and realized were from behind us. continued during strong by highlight value is watchlist from future the investments. kicker credit recovery gains gains QX warrant QX now our -- the and

fundings, our During cumulative cumulative as ago, from or net XX Freshly From years $X.X and the from credit we these record three $XX.X well almost basis in which Nestlé, sold of sale positions track of the CrowdStrike per represents quarter, to total points companies. million, roughly Medallia, our of X.X% are losses perspective, our remaining gains as our X.X% million year. commitments realized a since TPVG's generating and IPO in seven

XX, warrant our As we substantial XXXX, in activity we XX fair given unprecedented assets million of over portfolio with market optimistic are total for XXXX, companies underway from the gains the $XX.X continued conditions and and year investments time. and of $XX.X equity XX December respectively. in of XXXX these realizing and warrants cost value strong unlocking an held was in already from companies million value a equity for and

who a completion Talkspace Internets so goes Hims in SPAC successful of include -- announced couple and SPAC far In by their events fact, SPAC notable Group completion, QX views who's merger, merger. merger anticipated of Inc.

warrant equity three million at as these of in valued XX/XX. $X.X Our in are positions companies

an In companies are portfolio addition, discussions. several strategic and other active fundraising

losses, associated TriplePoint warrant whose our the investments special is We of realized debt realized generate consistent excited components Capital, which high very platform-wide a investments. are excess continue equity the yielding for its expect our and credit to track we monetization which in be with these of multiples unmatched near-term over the with And of of to in gains gains losses, is realized record platform-wide industry. long-term,

XXXX key XXXX, venture of selected the but goal in and of investment last the our travel, the sectors of a to diversification their of increasing our credit sub not were with foundation look companies resilient in as the if focus situations, for and their meeting size of and portfolio advancing our capital we we companies feel and new those investors many, of we closed scale markets-dependent our in believe broadly we and exited in all, was at general year in or negatively so VC and the XXXX there XXXX, that our we we provided execution working a companies playbook year, last here Fintech impacted. in looked capital as sectors year-to-date portfolio, our firms Monitoring estate, More with needs were to real and portfolio as TPVG, venture that sub a can we were resolved impact and has us these growth As our we element saw companies. momentum few and investments. capital-backed while that on extremely XXXX, pandemic, such stage out strong venture

investment tailwinds mentioned, environment, XXXX us. a us only for demonstrated into equity the sponsors' venture approach, Jim capital strong the reputation, particularly which As volatility fundraising are relationships, and during and exceptional with translating of which pipeline key for robust were is our along a collaborative further

their and needs relationships use broader out here these for In companies, financing basis and software financings VC exceptional roll addition, their we'll in new select well Fintech, some based with on on with certain the a and ecommerce, our some been as companies, as and on we've working structures XXXX. of investors extensive our scale of of portfolio some growing cases portfolio companies

million doesn't with the of diversified to Our it is increased per year and quarterly for investments gross position, ways expectation capital, closing offering our the start basis fourth fully $XXX a raise scaled million of this for On maintain on expanding a and success with as extending facility, a -- we've we cost in broaden to the and to for well part help a business credit million portfolio liquidity and liquidity fundings companies as to quarter we're to regards growth increase pre-pays, With to our lowered a but continue portfolio $XX income, diversified they $XXX range large and maintain capital per TPVG's second combined QX, investment-grade QX range back to financing. revolving quarter the then for private million on our gross our of third basis funding working notes getting and accelerated a while appreciate be sources. of closing recent to the our on quarters. our our after so and and goal rounds front, and $XX

to fund XX notes week We and to credit our was in have here the pleased to portfolio facility. of growth are to leverage revolving had to have advantage take eight this than more We intend us for had investors in XXXX. now offering banks have in this

third realize excess generated warrant have of to like leverage. to We partners. with as special dividend, and regards from during the as scale our year to equity order our JV dividend relief in to declared low distributions advantage and while syndication the exemptive primarily to we're to we our also of the continue IPO, other such co-invest investment us, XXXX, sponsor, benefit diversify still operating With take and among proud in gains funded strategic some since net have partnerships the further and entities our of our TriplePoint well income as our at from intend the platform

will both meeting growth maintain for more we In closing, policies. that, more frequent more but returns our on during and to strong follow review and dividend but we excited regular income, turn and venture disciplined realized portfolio special of over stage our strong with and a our our importantly, I'll for long-term to generating capital with playbook proud growth expect shareholders, as approach select and consistent deliberate further partners. to performance spillover significant reach focus pursue year, have are venture objectives Chris. seen scale relationships of our and of we gains, it to With to needs a continue are XXXX a continue the we've will to our this We companies, we we nurturing

Chris Mathieu

Great. Thanks Sajal hello everybody. and

again Before of I reached as quarterly the on ended I'd few figures, year the just milestones for the into highlight like a get year XXXX the strong we note. to a

year we had a balance high For both a million. the investment record liquidity high fully spillover We sheet, the full quarterly record total of XXXX, of sides $XX.X and the the our NII dividend. a million $XX.X diversified even overall of distributions, income enhanced increased covered our income and of special declaration portfolio, on after

of quarter compared as the million $XX.X compared Total full expenses year $XX an fourth $XX.X on XXXX. the compared quarter to primarily or per for results as $XX XX% the Total XXXX XXXX. on increase as quarter through per as $X.XX of was were or the increase in the total Net XXXX year for share, million Let financial higher to increase for fourth to investment the for XXXX. million to Net of income $XX.X quarter of for offering were $XX.X increase a of expenses fourth of for of the the XXXX. XXXX XXXX the full compared the January investment an the of income share compared $XX.X million $XX.X for operating for year for was in share is -- share base. share XXXX. full million was year the or per XXXX. or the for quarter update quarter for XXXX. fourth an by equity by for Total year in and $X.XX here Totaling $X.XX million expenses investment of XX% me in XXXX. operating driven quarter fourth fourth XXXX of asset you $X.XX fourth or given million take quarter to the of was year count, full income income we impacted and $XX completed million million million for the $XX $XX the per compared full operating share million million overall NII The investment year the full to or was $XX per

the in Nestlé. $X During held by quarter, traded of recorded the on and Freshly sale publicly primarily acquisition fourth from of Medallia million company net investments, the gains and of consisting from unrealized realized the Inc. gains realized CrowdStrike of gains shares

for resulted previously existing and full million value on year million $XX.X portfolio. XXXX, the primarily company of on Net gains a the quarter $X.X adjustments unrealized the and basis. of gross investments for During gains losses investments and recognition unrealized on recorded on full the realized fourth recorded of net from and the fair year the reversal

assets in of per special $X.XX as of higher as of the well equity year-end, the per company's in $XX.XX January of $XXX million as As change compared dividend The offering to the the net XXXX included or per million company's as net result XXXX. was a million share asset back count $XX year XXXX. share our or ago. $XXX of impact the per in a as share value $XX.XX share share

of per paid In our distribution During regular by the undistributed full $XX.X sourced this another or income We share during ordinary $XXX March by to the realized of for have income $XXX per quarterly total and will $X.XX the covered of from future. the $X.XX additional the XXX% XXth of distribution to special first record Board to XXXX, XXX% estimated quarter regular million quarterly distribution pleased special declaration, regular current After reported dividend. or support of spillover to on of of gains totaling as continue I'm declared not XXst. the and on be and that end our covered the our commitments which per expire March we our million, of Directors we we XXth of earned for we at stockholders declaring dividend fourth additional year, current fourth declared announce the share February significant unfunded capital this $X.XX before XXXX, share the earnings quarter, has quarter, in taxable distributions of prior to net expiration. per million from the XXXX. to $X.XX if recorded drawn XX% in year share with

In of addition, were baby outstanding have bonds, higher. unfunded set all consisted of revolving million under our debt, fixed commitments floor million or facility. outstanding Aggregate and as X.XX% year-end private to rate of term million a borrowings of our $XX $XXX credit primary and $XX million of $XXX

our as X.XX is With asset aggregate borrowings XXX%. coverage times the ratio of ratio year-end, leverage or an of

continue to accordion under $XX another maturity $XXX end date the We have we January, line increased our XXXX. our amended of the facility. existing and to total by million, liquidity year-end, of expanded $XXX $XXX periods million, December to extended and under syndicate revolving XXXX of $XXX cash bringing commitment after million year unfunded November the successfully while increase of revolving to had We the flexibility in commitments commitments was credit the by double the under also we feature. and to availability of total $XX credit commitments our in increasing to the facility from $XXX which million revolving in million, May million revolver extended of that As further company to announce and total consisting million in the we almost the lender our just million $XXX our were pleased

some to and which to on days. notes are York redeem million company listed within offering fully and this of by to liquidity use million of next the proceeds the to the earlier. -- Stock credit XX extinguished mentioned of are due fund we XXXX Exchange enhanced We advanced facility down week's that bonds, flexibility notes have Sajal $XXX our our expected the these this the capacity and the week our Jim be with private and and revolving baby our this investments outstanding from have $XXX paid we New of closing We plan week X.XX% funding offering all

and We cost strategy, a Concurrently, private our structure have portfolio the of reasonable TPVG attractive strength notes. continue blend investment-grade of its largely the rate leverage expensive an allocation more maturity and baby again to our refinancing rating we notes. floating we a borrowing the cheaper successfully and balanced are fixed with with bonds importantly, our week, leverage capital credit of are DBRS attractive on at extended debt level migrating most our this the we and maintains given instruments and term offering where notes of XX% a of diversity rate from liability journey to on long-term and execution revolving facility our the maintain, We floating between of

weighted Our XXXX and extended has now by the be been maturity most debt maturity to term will average followed recent for the term XXXX earliest offering.

take any So, have. at this completes our to questions that happy you prepared remarks and this time, be we'd

the open this so lines operator, you questions time? please at for could And

Operator

question begin now the go JMP with come ahead. will question-and-answer Please Ryan Instructions] from today [Operator we And Devin session. First will Securities.

Devin Ryan

great. All afternoon, right, Good everyone.

Jim Labe

Devin. Hi

Devin Ryan

the more So, really target on in to dig of leverage appreciate below outlook portfolio but want now still and right levels commentary, times. all bit I the one well a little is the

bit portfolio lot portfolio that? kind got be you of And that the or just are some about thinking you've so with kind through? yield a the and of should potential of commentary we about that commentary side little the some the kind expectation. growth in But appreciate And capacity for how XXXX a that given investment or of of on overall impact exit plays tied into of, activity, elevated how kind maybe thinking of then on and all how pre-payment the

Sajal Srivastava

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

line focused be backlog we have thresholds this have we that we this want have Obviously, term think confident in nature. outstanding, definitely investment portfolio to things ability or into Devin, year, our year. of the on pretty and So, sight coming commitments of terms feel return plus since grow pipeline to quality that the we given of on sheets unfunded the I But and that growth we're balanced we portfolio.

diversified the as as some raise offering It's the keeping we those rounds our also can to help we and view sources on from capital as how But have the term very accelerated debt from that see pre-pays. a us get there both thoughts my important. amortization so high to And keep that a have lender take as not to financing and growth time, primary your income. We wanting huge mitigate. pre-pays we to do companies and large thoughts -- as at a in is we balance we'll then portfolio, get same back situation of using of pre-pay write-up, quality revolver and well assets quality of get some portfolio high it as portfolio those mentioned

And so is pre-pays, continue of a year bit. our anything it's smart we to a what I always the to nature do that way can the slow we'll in this But to down think to beast. goal Chris, have add?

Chris Mathieu

I Yes, It's would the also right. have fees for challenge portfolio spreads growth, which given income pre-payment NII kickers between but I thing with a enhancing is also our and nice pre-payment accelerations the you're think are business, year. just fee constant we great a the say for that in the

velocity to here, and that project, pre-pays I the the with the are when of the just would portfolio mature those built continue, and we not to they portfolio, they expect sure frequency hard into have are So, come. of

Devin Ryan

really this think have fighting portfolio maybe now, I -- of of companies bit right And that of SPAC are thoughts on -- taking implications a anywhere. we're [ph] the great Okay, the I kind back, few terrific. step what going it's maybe expectation [ph] follow-up, market, a a wanted overall little color. kind seeing that structurally hot a the to That's in is not your it's but then trend, obviously, you just

And you all, at it's changes even kind so I'm kind how overall opportunity, underwriting whether you're the an guys view investment about the of or that you curious as frames, how thinking of funnel. or

and over Just come like, big obviously, isn't the we've the bigger acceleration going there's anywhere? the because raise and SPAC upcoming to past necessarily to seen picture lot this going it a year, be year over perhaps a pretty feels

Sajal Srivastava

Yes.

Jim, I great got you've and from start world. then me the think insights sponsor Let some

question. great So, Devin,

refer the our to announced to dozen, SPAC I and approaching soon the platform bankers TriplePoint of use across word announced think since one we're to platform. think I SPAC both exit be Capital global almost factory two our

that say, to group of the testament venture investors. a the select would I capital VC of work with, again, on sponsors So, quality again, we the it's focusing

mind, And think, so in we're lender. keep a I

thing. So, look liquidity portfolio as we great a lender, to is companies for a

So, other if zone field cash, playing and public more our -- that they're or we touchdown, raising From football or capital in the we and the end helps the the the about have we're perspective, it right, right. debt. talked than the in for service private like different markets we analogy markets,

kickers a so warrants. exit liquidity and an is event. It's equity, our And SPAC for

public And a to so, companies through IPO. traditional through it go portfolio our we view if can a that can means that we're faster an event. then And have appreciative exit SPAC they

exit of them. supportive or about our supportive we're have other say conceptually, But our select We'll we're nothing supportive we're which think perspective, companies. our we I'd We're liquidity I let thoughts? determine they indifferent. your more lender, from general, portfolio prefer. board members as for exit Jim, in VCs how of against and path and a

Jim Labe

way in targets, there'll others in my of speculation. with administrative of the -- year for a the SPAC out mind or instead to get across not month a venture SPAC XXX some what business the go to kinds generating and of moon be if companies, you depends land, companies, funds, we well, hypothetical that, cash doing based plus companies whether and when Sajal it's of all which that the way we certainly suppositions, our I positive, not for they're again, getting hassle great have more business one out running already platform there good of XX long call And plus run cycle and to SPAC comes is going out And out. cases portfolio are vehicles, shot so of for technology are to through or now, whole SPAC, number of these it's what to And even companies, companies, at it's also guess currently, for you as of revenue our last is either, to know, earlier, SPAC. favor board just venture forth. a get takes extremely are companies, electric a billion raise we're these and on XX mean, days batteries, select, funds, which R&D also But based and revenue the for not is But generating talk a for having I there, Yes, on themselves in that I which years. going who could round. and away be kind growing. over think process. into it bunch some or while other for level our mentioned, plus And another most equity It's issue process a that we're have the when and on that looking XX -- on going not you flow next

we think not right a we're So, it's running on it. on but again, business now, good trend our dependent

Devin Ryan

taking guys. the you, congrats of Thank Okay. year. nice the on questions, and you Appreciate a end

Jim Labe

you. Thank

Operator

question Wells next Securities. Please And come go with ahead. will our Fargo from Finn O'Shea

Finn O'Shea

you. Thank everyone. Hi,

there. to on continue interesting dialogue that Just

taking, With the SPAC loan talk the level this earlier VC as capital from raising have, mentioned, you you markets, growth tie competition you apparently stage. right high for funds. lenders just all farther together the venture new to and about now? you pre-IPO Then is have what stage down of adventure like, Can raising digging

Jim Labe

years, stab various interest in about Sajal returns good plus, not over obviously to in entrance. folks firm. over for what's come about deal even go the the XX that leader We've take in having many what's I'll not attract But the XX or about together that percentage the Yes. The about party. business the as flow about in the segment. terms. this, cases, first a this very add. is seen expertise. relationships for free been reputation, not been the the the or some about this cycles. reputation, I about, not to a about a it's and times, rates. my and the the references It's believe and and about reason this day, the we we're very Sajal, this the going through attractive name experience. It's there's at names Yes, end feel team, as much the It's doing and It's It's But spread, the and the is case, and that, market. of we've specialized at there and in it's

Sajal Srivastava

so global the what Yes. recovery signs of, ecosystem. are the is as And of the pandemic, and off, could think the resiliency up. heating add to hopefully Maybe I talked capital about, we're Finn, venture you I then, coming tech economy, the particularly of seeing the some. markets

think I that's for what to So catalyst causing grow. a companies is

And companies think I Venture-backed factor, companies, need so capital. growing, are they means which that's fundamental, right? tech growing, important the kind they're of most

environment if anything, burn, so They're of And up they're the that actually right. a -- and because turning capital in.

saw companies runway. other portfolio were marketing tech So, when and backed venture spent, to preserve cutting cutting we or headcount cutting in midst companies, the companies COVID, of burn,

Now we're growth, causing is increase in capital. seeing demand signs acceleration, again, for which of more burn, the

and as, side. are debt the side of the sides the equity there right, two So equation, there's

value table. role funds, companies of you with total firms the of for venture to That's has thesis important, your raise venture is your certain get and quality a source to There's capital associated capital minimize equity critical the equity sponsors, equity in strategic business. right? been always and the debt them And capital. venture the then backed our want of So, to private cap complement from that's dilution

parties, on right right equity, it raise layer the venture raise the over valuations, don't and sponsors, So, debt. right the from then

their you and And help well, check as get as time entrepreneur reducing necessarily total ownership you returns existing their or VCs to and of -- needs So take. business, but to have that size the the also they for that existing the minimize right, sponsors, your write the that same you total well. the capital at dilution boost we by preserving

So, from causing from And perspective. the it's perspective, debt. environment, it's the investor's again, the win-win for current given demand existing going to entrepreneur's the

Jim You the there heads. be we as that just always I coming know, handled to listen, than that. about value But the trusted volatility, year's good but pedigree particular, be we we'd being the of only offer our last going our Jim theme think with, partnerships, more the think track money, If competition. which said, not tech the before that competition, particularly sort I wasn't, way And is think scratching in cycles long-term during the records, world, sponsors, and there's in I recognize reputation. it's in and bad world, venture there ourselves in and times VC was

the highest wrote VCs they they check, companies or add. sponsors, valuation, certain the the the value or track right? It's biggest don't certain record. It's pick them Our portfolio because gave

been think we the term are of how that has always so business want And and we ones track work value long that reputation, we entrepreneurs thesis with. partnership that to our that's the run so. And record our

Chris Mathieu

lenders, and there, growth out spectrum as the not many nerd triple the of can right alternatives with venture primarily depth balance And I equity. a adventure the question Sajal so the is. and guess much equity spectrum. I debt a so amount equity that in point as definitely question equity add venture as footnote, hit at others, amount that Finn, only on as here and much you nerve competitive the remains called stage It's competitive so hitting competition, so four -- says, companies the it's of of But

Finn O'Shea

Sure.

And financing a growth? relates you it's think color the give this all I very me it it both us and follow-up, How Can I new think products, platform Jim new BDC? products. just And Sajal I let on in guess, actually, there. just to helpful. throw mentioned any

the you products. that as us I not just website, the your think I but sciences new, life if sure make to more that's address Tell also term new about me well. in see correct

Chris Mathieu

I'll Well, Yes. start. Finn,

tell products overall those. to going not all that -- the we're our first, so of you So

think say We've I companies. recognition, we've pattern the and listen, given and said, generally given exit profile, identified I We've relationships. growing record our have So in just base, the those our particular, the the mentioned software expertise we of sectors, the needs in companies just and unique as certain burn the we and and and needs track asset again, profile. consumer, the and Fintech

and vehicles -- together multiple our given large have allocate platform products years and And so appropriately. putting we've many for have -- been them for financing

And use help with target opportunity their specific on. so for focused see really companies that just case growing they're those capital and our we to a growth to the

think to be key exciting, And scale. some thesis several had revenue, I they we've pretty of And is bigger, successes. and I point the of worth nifty a getting again think so growth definitely our and it's company. other back we're companies it's continue I to million companies going portfolio to are and reoccurring our mean, a triple real seeing want $XXX

very but that than the like And of different to are a company limit million just stage so, $XX growth million for $XX venture the on needs that's cusp a the company it's the later call the for metric to products so those those earlier us to whatever important for broad growth, and growth needs and want and have qualifying or them. us you

us. so thing And the for that's I exciting think

Jim Labe

starting an do that certainly market wide, Particularly we're TPVG. number sector, sector work only to I extent in continuing we to And our in at and select means a But extent an as broader and big little TPVG call platform health And Sciences lot more in different not health a wellness just in and have investors what of And portfolio it word, stages, function grow seeing is the early active so is folks. to do. Life the to we're a activity digital and is area large well. the add that a that bit been that companies a would a what definition. that's is to definitely of segment

Finn O'Shea

you. thank well, Very

Operator

And our will with next question come go Compass Casey Alexander ahead. Please from Point.

Casey Alexander

And I think call. of afternoon. person attempt good the on an describe every this Hi, single Yes. nerds to slip Jim, was your competitive tongue

Jim Labe

Got it. it back. Take

Casey Alexander

certainly be? that'll be know sad and see for financing. bonds by a those. to is see on to deferred this not enjoyed second and people bonds the remaining assume going lot million -- a you Congratulations on Chris everybody baby to are you Do the the go what surprised the actually, costs to $XXX is know be offering charge? of going I do the what quarter amortization baby I'm

Chris Mathieu

That -- yes.

debt, loss a about be cost from the not of a line will $XXX,XXX. So NII of a so from as be realized that'll below charge extinguishment part

Casey Alexander

companies? brought right. the Thank Okay. SAPC you. line $XXX,XXX. get generally, below leverage does Great. substantial to SAPC, Is the brings to SAPCs a day, lenders make bought additional who non-public in is All that it the end at capital. the ratio? the out. the That'll some to are to investors as there hitting the Seeing company target of create preponderance a And the you taken when be Because self-described your for difficulty factory, going company by portfolio of as you get

target the make going to that to ratio to leverage it is So get or some difficult create difficulty?

Jim Labe

we time it our on SAPCs, historical ago. some the have Casey, us I at think depends those if company, of off maybe look profile that are paid the been companies

for so would of the bar a is SAPCs. And I say it's function set that

And lend so, we -- to them. platform, years ago and XX the originally a we we had portfolio company

an have existing It's the say where so outstanding not has pursued some off. debts our loans merger. SPAC been we So I with would case paid seen a time far, obligor after

haven't we capital. but any yes, to extent debt cheaper the had attract existing impact that they from outstanding, so near-term can And

you the and a I'd again, there's the company clearly of there potential if in debt most -- provide Although know these have an so a to not you pipes and equity, to time say are credit history if IPO. necessarily capital opportunity de-SPAC post

Casey Alexander

was clearly bit down hour you. a essentially In Thank maturity. it XXth great. bucket. before you Prodigy. and in of situation at that the Okay, curious down were I'm to had came one they that the little credit about Prodigy marked to dicey pay And able a

So loan extended at a the last picking. then and rate than loan a you new lower

to the an facts a as at result are incongruous a curious lower the those just combination sort in of interest? loan picking new code of but I'm would so because that And rate,

Jim Labe

Yes.

good, Casey. So

out, it restructured the other loans during which actually, during and significant international a as on the raised -- well yes, as is QX Prodigy, was you capital quarter, And capital QX So the for for lending leverage company. business. as student graduate we side, those they amount our of with pointed a

loans a our the we so did equity tranche Plus actually convert of of So we a company. into our portion restructured portion -- loans. portion a preferred into a

in that actually actually is importantly, long for we the And and well really come securitization really kind the set think portfolio and thing the back are are more think I company's the term so their -- impressive success, up of activities quite has have well. the I on held progress, based markets favorable. And pretty up

in I we our more a noise of from is up we've But So set the so little same to other factors. opinion. term essentially mark the the some we're of for again, long -- reflecting the importantly, were think our think -- in is aggregate, bit success QX where QX, I company and

Casey Alexander

might a have at which it able to in take you be think mind Do you of sort pick? you off timeframe of

Jim Labe

actually It structure. has a

the don't I -- And to but it near prior future. so too pick expect can we -- it's do in yes, in think off

Casey Alexander

Okay.

Next, if you the you fair Was and in what guys making the like in over to all from make and marked ultimately light What ask something guys could experience gained XX% to I'd I have mean, my share them. experience? a that about the from Knotel asked asked experience? payoff. I resulted learned Knotel anything, possibly mid of I we you think high-XXs was And of that several there the to fact from learned still in it it mistakes, I certainly quarters, learned? be which

Chris Mathieu

in. jump then Yes, let please Jim, and me start

real of quite wealth place, from COVID So of was equity venture hundreds Knotel millions funds, and of and capital company victim I'd funds, premier estate raised of say in -- the sheltering organization. This again, right. is dollars large sovereign

the had as us it of leverage the investors on backing side. very as sophisticated equity So, intelligent some well

had during for were we unsuccessful. or attempts had pursued write think, attempts discussed so them as and strategic and offers And they and up, the I and the liquidity company extra

our our fair during events, the that. and value associated once likelihood pattern, that think of assessment with then period reflects So, the fact those and facts them circumstances And events. mark associated our time the with I those of reduce the represented, probabilities

is didn't, a fast, Things we had And the change, occur, takeaway for moving right. sooner. when strategic that's I So say, at hoped events listen, had be We M&A. think I change to would I think recovery equity, for we at quickly. things hoped when those be

And interesting here. scenario it's so think I

in through quarter, had the with the makes have was difference If and of stay kind pick And isn't pick success credits, assess this listen long-term for the in, complexity sense think of our it, working determined, full we you we've Mind here situation, gotten capital look, we challenge investment where that exited of on us more Candy, in the company. some near-term repayment. of we one, the to of hey, one put fact, I'll and some it And I teams teams names, engaged. be in, Knotel needs on workout kind I'll the our other

we more, took advantage and opportunity it, listen, assessed said, For of came we it. an we and

So, credit manager said never perfect. is no, listen, no were. we we And

I I don't think we entry of it we is upside filed company COVID. we the we of proud recovery. that world we did it is. of and fact handled look we lending whole I I could it think think us we any bankruptcy it Knotel that some us think But mean, amounts and we're lending and return and pattern about any company all how credit, as point underwriting plus knows have not the what and our timely have potential. in I the that of to to a in of ultimate supported the the so that could factored the for got how have did. don't factored XX% of

a on from a team. capital on it's our drag So not not I It's think more drag us.

it losses think our ability And as a optimistic in and to we're and equity past. us taking should happy -- anything it's We resolved. portfolios being Jim, done things those And we've so be. never add. of not recover all a to want the was considered loss. something yes, I we're that's existing behind But warrant about you

Jim Labe

Yes.

Casey Alexander

Great. Thank All you right. for that.

Okay. I’m sorry. Jim,

Jim Labe

Sajal mirror foresaw and no of coming. and comments because one a my COVID would different, likely it's COVID what most much actually, Well, have what would were be in said casualty, nothing, terms pretty

held company. So there a it's certainly privately -- were and multiple

were And things to say. and Sajal we didn't term there's much work term debt considered cetera, mentioned, sheets, can But you et there words. sheets, equity, just multiple and so Sajal’s just things assigned out all exact as so

we'll not we think it, so of you larger the there's more had of actually, otherwise So any as here, look good and credit costs, from portion when recovery only a at what but bankruptcy a on very been goes see perspective, to go. picture, that then still years on we have as proceedings so as might managers, I forth. where and avoided well And and

Casey Alexander

that. great. Okay, Thank you for

Lastly, just ROLI? any on update

Chris Mathieu

-- it's won for you of but Yes. QX. not at look quarter-over-quarter if I so that the if and value you've favorable mean, the they woods, out we product product seen ROLI, some accreted awards in some for their very reviews,

So we continue balanced, we to conditions but to again, be ROLI. continued improve feel at

Casey Alexander

for All it. taking right. questions. really you I Great. Thank my appreciate

Chris Mathieu

Casey. you, Thank

Jim Labe

Thank you.

Operator

Nolan Ladenburg question Thalmann. next our with will ahead. And from come Christopher go Please

Christopher Nolan

what the leverage best Jim, what operating guys. your -- growing, company is as do see investments company? Hey, for the you invest offer

Jim Labe

by you Well, operating leverage, could elaborate?

Christopher Nolan

the growth Which net for grow revenues can ones Sure. expenses?

Jim Labe

the where privately want these individual sure, into Oh, to, again, names. are get level well, companies we'd we're not I'm held at

One of the biggest….

Christopher Nolan

or can back I'm your make you actually the you TriplePoint. not TriplePoint whatever, business existing about business? grow will talking in systems, that in What investments people

Jim Labe

Yes.

we're standpoint, from So that and scaling. talking about growing

some across say or and here. new the for plans mode is well how again, expansions, But only but increase underway. in about so focus TPVG mode, financing mode products, and originations a staff platform, ones not talked subtle are we I'd hiring of the And underway, our

a continue growth are the the do And expansion I so And we and always think how to just say between the so But There's growing itself. markets. in trade-off and of build infrastructure. terms it's the building to we in European much that's it. cost I of want

Sajal Srivastava

relationships just into so I turn their we the really, in because fund critical, to, portfolio add, us. that our -- and capital what's companies companies potential are look perspective would it's they're portfolio Christopher, venture right, as sponsor, for investing so

the stage. element solely to Growth to focuses portfolio And in is right, companies, all Venture platform on later of early so TPVG lending a the strategy stages key growth.

segments, the like and system, active right. -- TPVG is stages, a translate as benefit the in it's is early the So the later leverage farm those portfolio in to our companies other those sponsor

grow and develop, relationships So for select they growth build the and leverage potential TPVG or stage grow foster and early so and foster to VC as become and because companies. But to to obligors. stage scale one will up portfolio stage TPVG it's up our only is day grow portfolio continue from flow our to be also not deal companies deepen the portfolio and they continuing later our those companies segments hopefully business again, platform, of

I financing so quote or e-commerce way right, you vector on, elaborated and portfolio vectors a underwriting, a there's that's a then a of portfolio and credit time certain there's credit And then of products. driving facilities drive up multiple then you've got lifetime with up critical And different right, our lifetime a we think CAC, right, some value to value. is the driving that either or company, multiple that's element one so that's LTV, up growth. And that. consumer And to companies, why of couple

about And structures, we it's on. with and talked ones. portfolio new And potential strategies potential that's up companies, some and what focused existing so we're as new of driving these LTV

that's And excited we're what about. so

Christopher Nolan

it for you. Thank Okay. me. That's

Operator

And ahead. go come Please our Lynch from question Ryan next will KBW. with

Ryan Lynch

afternoon. Hey, questions. two just I good have

The Can participate first would them. confirm I well? the allow gain that? value then that one shares, have perform then potentially out that they structure company's of if performance any that you that on to to believe component that you your is Prodigy, into on preferred and don't, investment would turns I in don't that to upside assume they And the yield assuming

Sajal Srivastava

Yes.

the they yield And have a ranking do them. table. So a associated component Ryan, with senior cap do they in have

not seats board position. have like a don't We anything equity. traditional not they're So that. control in or We're

benefits, kind of think structure. much of I hybrid it's a very so the the And a that's like one

Ryan Lynch

the is on the What and yield X-K XX-K? [ph]

Sajal Srivastava

Chris, do you have anything?

Chris Mathieu

It's Yes. debt. with X% pick the consistent

Ryan Lynch

$XXX in And you what that gives to today that back other be confidence are guess, that to the was to in you you'll making environment XXXX? changes I from fundings environment had looks you QX $XX QX. what talked and and one the million that Okay. funding million $XXX then quarterly going just QX, million basically million to only $XX I in sort or half of like your market market able assumptions QX relative double of the the that in to about

Sajal Srivastava

Yes.

say, at And you've say if if we're track of look crossed TPVG, let's I'd to at where before. Ryan, So we record the seen basically, articulating were out looked we XXXX. a you XXXX, we pattern were

it's factors. so -- a And of couple

audit billion the a guys want couple want So for One companies expires. great we've because to not to kind things. towards or it pipeline some have these that's it hope And of where year. is of -- because they're use as and What go portfolio back boost generate is, sheets they it balance the going half one, is. year, debt gotten generally end it promise a is, if fundraise to year. year-end it's right, next got They drawn to of before purposes, in their the the plus

there's panned the first half people fundings part or the see of generally raise year. I capital. than up were other before the more why out look is this think they of to equity XXXX is that year debt half then more how that's of pent just of And the So, raise it larger the of fundraising to waiting second

in we're kind that that also and of the seeing demand the there. as seeing portfolio now right continued increase we And so to look we're

find of methodology, go say, sight It's demonstrated lots hiring pipeline, to got no line what of with no in kind years. we've assumptions, I'd So, people we've change it. huge growth in consistent no prior to of

Ryan Lynch

Understood. taking Thanks questions. my Okay, for

Sajal Srivastava

Great.

Operator

will session. to I'd Jim like And Labe remarks. to question-and-answer over closing conference conclude this any for our the back turn

Jim Labe

next to the operator. participating we And you thank stakeholders few you, forward all look quite and Goodbye. everyone. everyone always I’d our our a like TriplePoint thank to Thank there's with in else to line or and friends, and Thanks, healthy remain on everyone as for our I’d call. like continues Okay. talking quarter. to listening hope

Operator

Thank today's concluded. not you for is conference The presentation. attending

at lines may this You disconnect your now time.

TriplePoint Venture Growth BDC (TPVG) 4 Mar 212020 Q4 Earnings call transcript