Earnings call transcript Q1 2023

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Operator

Good afternoon, ladies and gentlemen, and welcome to the TriplePoint Venture Growth BDC Corporation First Quarter 2023 Earnings Conference Call. At this time, all lines have been placed in a listen-only mode. After the speakers' remarks, there will be an opportunity to ask questions and instructions will follow at that time. This conference is being recorded and a replay of this call will be available in an audio webcast on the TriplePoint Venture Growth website. Company |is pleased to share with you the company's results for the first quarter of 2023. 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

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

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

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

Jim Labe

Good quarter you afternoon everyone, for and first earnings call. thank joining TPVG's

or year, third of TPVG's in since quarterly grew share. the income quarter distribution increased portfolio investment NII to of portfolio. power our we most the selective March we billion to of $X.XX continue We quarter distribution generated demonstrate XXXX, these share of continuing the net markets. our the now earnings Including During for XX% approach nearly quarterly our first recent to of $X.XX have maintain to given increase XXXX. distribution the of this our exceeded and per $X NII per quarter

the a we level. which consecutive second net been Based we've above quarter, on the during XX% XX.X% quarter our realized ROE, income ROE the is

the for our quarter of yield portfolio portfolio consecutive quarter average core weighted the increasing eighth and of achieved also We XX.X% yield.

in current working through the these While long-term team credit quarter, venture cycle was market experience impacted it's our part conditions, record. multi-decade as track given and our down this lending macroeconomic events cycle in of the in this is

was TriplePoint Given the Signature a overall market and situation monumental the institutional these we significantly from the into extending and Bank from outlook Valley quarter capitalize at altered quarter over impacts platform increased potentially changer and human Republic unfortunate our a are lending, an market. venture including will both Bank for growing have lasting opportunities permanently Valley competitive Silicon The translating into what is game at developments a for a these unprecedented very Bank promising demise into long long-term we significant perspective. expect the turning are term, on continue to believe From right a landscape of very and for to last First developments in Bank, perspective, is there that this TPVG. it and events effect and major Capital a Silicon

process has of other and investment fill created their the traditional SVB, by the been services. stepping in are in card, management, focus such banks services some While credit depository, bank to as on void

appetites of emerging have given terms environment, have tightening. this post-SVB witnessed In lending bank and enter considerable changed we

hidden on now lending banks venture really meaningful other that that our way. capital other market these This partners, is cost it's more bank the are lending companies, seen and as venture relationship as conversations of financing Based any of date the in of pipeline in lending as drawbacks any the and a and participants venture lending. well role becoming portfolio entry. commercial past, separating the of limitations relationship the this importance in we've these demonstrated associated haven't they than discussed enter a prospects ever, part the and more our matter has importance recognize and of with venture the the active for conscious the has To TriplePoint strategies. bank lending specialized the to significant of the we companies value barriers highly further As overall business or and financing of

where participant, build or pipeline to we as next will longer who The received departure major building source number these and new which the loans have market situations is has we're active flow the resulted years. growth for to over high from quality few lending no our overnight of has quarters platform to not is be of venture are to and portfolio replacing opportunities also be banks. of where replacement will or continuing companies deal includes and future a backed we are becoming SVB The in At as our newer the partners well build our previously contributed part also platform, and providing the increased TriplePoint level, active by into continue select out lending. and a

growth quarter, Turning period no lower the to valuation quarter-over-quarter primarily resets to cycle. markets, surprise, venture investment the venture continued by during We're of valuations. in companies. a tightening We're policy company monetary in capital stage and for in the the activity we've current downturn multiples first venture and see a public by driven

with conversations is their have up into pick capital and market there PitchBook powder funds venture given on later this our signs NVCA's partners, at early of disposal. estimated the momentum capital based very this already backdrop, some still venture will XXXX, especially that belief year widespread billion however, dry and XXX investment of Given that a

on AI, us our forecasting pop generative but pockets this said, growing as and capital other increase new in out sense strong appetites there's it's witnessing in volatility, venture several such companies tech as and are and in activity investment they're to to market to and of better investment only Although starting sectors among VCs finding starting up now wait tell fields With ahead. investing we not them to well. a sponsors that existing continuing platform, continue times focus across

We are still getting a continue slower the to find pace. been It's simply taking in deals done. longer

venture also debt have to lending companies their we timetables for out demand their continue also pipeline planning plans. capitalization in the Within and financing encompassing strategies and from

additional these only which companies financing or turn continue valuation plans. forward opportunistic growth year companies seeking of and equity are attractive to equity stage believe the given venture debt towards the another as we at raised markets. are previously to sensitive TPVG And companies, the in their towards valuations turn finally, the debt stated these to over opportunistically continuing for of go Some or highest for acquisitions need runway so in last equity part rounds stage have layering opportunities, however, Venture going the that Having longer to public concentrate on venture remain listings be all serving selective what and as companies. to continue is quality between for growth investing we driver. timelines been ourselves as

TPVG XXXX on Consistent frontier and outlook broader We're macroeconomic that for these pretty investments environment sports, whose space, to and focus detection, Despite many on fintech, economy, portfolio investments years portfolio sectors profitability. a network continue to of software, optimistic as enterprise, of with in for from some digital grow achieving the the experiencing funded as vertical next diversified diverse that media, these tailwinds generation name benefits tech in others we the plans few. approach, to with revenue in challenges. current capital, in will scale the and companies to our position inflationary we this next raised a the have them two and environment, under concerns will recently one perform number companies volatile economic these in have meaningful well

Based maintain impacts wrap on To during long-term of end investment will up and of we'll underway pick into the long-term team with create widespread and up belief on to market capital shareholder track portfolio and the well our a at and value. our of experienced venture select in differentiated partners that TriplePoint our over our in forecast working our the these $XX quality the of opportunities continue March billion and to to select draw already in as the exit these opportunities. create momentum investing add XXXX, year later to of multi-year significant SVB platform us success the we development lasting developments approximately times our disciplined on We sustainable venture wake record to level, of partners capital the platform over better loans will the capitalize the on venture along with for and the as have SVB investment fashion this these ahead.

With that, I'll turn over call to now the Sajal.

Sajal Srivastava

good and Jim, you, Thank afternoon.

market with stage $XXX Capital, lending discussed, companies continue million and focused venture to platform TriplePoint our with in sheets extremely approach of and in remain at venture signed active Jim term our growth As selective the QX. we maintain

debt TriplePoint the totaled to commitments majority for we quarter a vehicles the selectively at the Given on as Capital million. other TPVG's new position, going TPVG are commitments platform is leverage first closed TPVG result to with and allocating $X

companies. annualized reflecting $XX.X the we $XXX the and which in million the debt range quarter, portfolio origination. to portfolio million of excess portfolio the carried Of in XX.X% scale obligors During at for during first our half roughly of investments funded lower revenues landing adjusted the guided an companies, yield quarter, average at of quarter, our generate end annualized size weighted funded the of XX increased

increase. core was QX and XX.X%, QX Our in quarterly represented weighted which our consecutive yield XX.X% for from up portfolio average was eighth

February and XX reflect portfolio QX rate which will March, impact yet yields more the Our – basis yield portfolio QX. does starting point in X meaningfully announced increases in not

rate for for strong given As portfolio the of increased another and to environment. a to portfolio are result, yield we in quarter stay XXXX continue optimistic yield

$XX continue Although still customer and to we one closing they take least ForgeRock's part private their to loan prepayment of expect transaction of announced addition at million in any in in per others the a works. two business to one quarter previously with in expectation didn't with QX, be prepayments prepayments have conjunction the we

forecast of QX million million expectations quarter, reduced million is in as our allocation commitments for our we In new of guidance of to low our of for for fundings and utilization grow allocation unfunded $XX $XX increase existing to our with range new investment potential the fundings terms of in commitment TPVG. $XXX TPVG down second our from commitments, the the gross of to prior million to $XX with to

compared continued ago. increasing funded by TPVG number portfolio made borrowers XX progress we one the quarter, diversifying the on as the During to year XX to of

of to total compared XX% represent obligors one our XX top debt our XX% as investments year addition, ago. In

for companies, half EBITDA are to projected XX While of venture our stage EBITDA. either are growth achieve or more than obligors top not positive typical

year. seven QX, continue XX $X.X in brings the We banking rising believe see with associated This In in capital. million during to although environment, venture portfolio QX, was the events to our billion fundraising companies lower market we levels past quarter. by which over also challenging in portfolio of impacted total at capital equity of activity despite companies approximately $XX the the raised portfolio the

We over expect fundraising pick see gradually quarter-over-quarter to year. the course activity the portfolio within our up of

warrant and warrant compared with one investments as equity of portfolio year as XXXX XXX investments equity QX as Our grows ago. to of well XXX

companies XXst, million and equity held March as and XXXX, XXXX million XX up we respectively. and companies, investments of QX XX up in As warrants from total as fair of from value of companies QX in cost with companies held XX XXX a XX XX of

growing numerous investments in the underlying and ahead to quarter, realized is in that of cumulative down to our companies and despite we enterprise gains to companies. realized well excess the have of as the expect important expanding particularly cases our portfolio are over strong long-term. fair the of our achieving cumulative warrant warrant continue to we many During fintech, many in reflecting travel companies executing we and from EBITDA, performance to reduction those a according market some software, which positions as that why note of conditions equity rounds continue segments, equity plan, saw in as losses generate our It's and and value well and as cases

burn $XX for profitability to companies In but for future the their achieve thoughtfully continue credit grow, cash while outlook our With to terms direct conditions, despite end they for portfolio from the we this is one and rates. scores, a of principle at their which or so most or fundraising, means XX% of market given our best company that of to either category above two of ranked background, category do optimizing performing credit to as at the quarter, with runway the equity playbook rates quality, are approximately for portfolio equity and upgraded to our of expectations extend to one two of is environment the a balance portfolio million.

believe delays insurtech million were banking downgraded in category conditions impacted process. fundraising an market. also due as of balance which Luko, market, to known to As three by strategic due impacted venture Jim mentioned, its in category also in was company with $XX the to two credit the the quarter demand, during principle We we equity financing from events

or We million also principal Canada RenoRun balance has filed and from to liquidation construction, of to creditor X potential sales, RenoRun, from and entire asset logistics cash we on other a Category sorry. company a for asset facilitate look recovery IP, their and downgraded with process, our sale technology our and in and including – hand both protection loan, X. enterprise Category to on $X the

and well from to entire the loan underlying principle provided X of Category potential filed protection. look inventory and and IP. other has financing X to the the balance company on was Chapter $X We asset as an and retail to as downgraded with enterprises enterprise inventory our from bankruptcy Underground recovery including e-commerce based sales, X the for facility million Category

standalone Hey Favor, situation we potentially ongoing to million the an and of or Club, protection or XX online also as balance sell result a could an with reorganize near continue of in This as occur principle recovery term that bankruptcy substantial for to filed another known Pill Chapter developments with the operations the more in full loan. and pharmacy intent is $XX our enterprise company. to expect

million, their quarter downgraded balance company strategic e-bike were X, X million of businesses financing as were Category of in navigate well as with challenges Health tech to to rated and through Also, as VanMoof insured the during previously a both sectors a an IQ, continue principal in an balance and $XX $XX with principal they developments processes. company which their

time venture technology of We and are to and stress. for some expect period investing public in challenging for experience capital a obligors companies

these we our effectively through managed demonstrated teams have before have As situations.

of XX of loss As per and since years under annum remains TPVG or per basis points now fundings inception rate net ago, a XX commitments cumulative X% reminder, points annum. our cumulative or X% basis XX

follow with we generating closing, partners. strong to venture aspects our our on returns with continue In our companies, for nurturing business remain needs neither relationships focused growth further long-term capital shareholders, select and of of on stage focus playbook all strong and we'll a venture

With that, now the to turn I'll over Chris. call

Chris Mathieu

Great. Sajal. And Thank hello you, everybody.

continued while a to sit core quarter diversified had and elevated range. end, portfolio, first diversify record the yields grew we leverage During quarter, a the income portfolio and capital from of now with loan our to size, ample structure, we we meet as funding portfolio we liquidity our targeted

update for of drill me and XXXX. down on share income quarter first compared million Let an the investment for as financial first $XX XXXX. $XX million results to the a the quarter was bit of more Total

and onboarding for as loan Our quarter strong of total core portfolio yield, be XX.X% XX.X% XXXX. stable. which prepayment income, impact investments debt excludes was on compared to the the first continue The to of yields

consisted and interest of expense, G&A $X.X of expenses These expenses of quarter Operating fees first XXXX. for $X.X million million as expenses. $X million management the were million to $XX million $XX.X of compared of

shareholder reduced fee friendly income fee structure, structure requirement under total first expense $X.X the million incentive our incentive by Due of during the quarter. return to was our the

We income $X.XX last $XX.X per in compared to earned period investment of or net $X.XX the share same per year. million share

net losses unrealized quarter and of Net consisting warrant losses change and the fair unrealized adjustments. first million portfolio, million $X.X from investments $X.X of and the on on losses $XX.X unrealized portfolio debt net value equity was million, resulting for on the of

share million as quarter share XXXX. or December of end $XX.XX $XXX or compared $XX.XX total million $XXX XX, of were to net per As assets per

from paid Directors share. The dividend ordinary per of a as to record of of income XX. to $X.XX of June declared regular Our XX June is on stockholders be quarterly dividend Board

$X.XX the overrunning the to and addition period support dividend, future. which totalled to or In per the $XX retain first to the additional share income, spillover dividends supplemental quarter we end in at continue of million regular

We $XXX total unfunded ended XX% XXXX. our Of to excuse of certain reaching upon commitments, million move will million this quarter let's during or $XX $XXX the amount, million an was aggregate me, with of this – expire milestones. total which portfolio commitments. of Now, company investment investment the of dependent

leverage quick liquidity. Now, on update overall sheet a and just our balance

a reaffirmed XX, the $XXX grade grade at rate term outstanding standing credit notes. and investment March facility. In aggregate And was was of an BBB. As fixed term an revolving our $XXX million in with in million outstanding the with issued of on DBRS connection transactions recently investment-grade rating notes, those investment connection

quarter ratio the a ended We with of times. leverage X.XX

available of million credit As $XXX company had revolving of facility. the million $XXX total of and $XX quarter liquidity consisting under end cash in million the

existing, In sustained predictable addition cash which seasoned liquidity portfolio throughout the to flows, provides bodes liquidity, for well and diversified this XXXX.

of the more cash $XXX XXXX. than $XXX back flows to than and portfolio have more we Specifically, to from throughout existing flow in XXXX scheduled company contractual million the million

I venture a would particular are quarter-to-quarter, have any long-term. of also prepayments loan the customers to like vary that from in will one to lending expect we and they while remind over you they model, two natural that part quarter prepay our

As an in of example, had is we QX on mentioned, this all aggregate as such of ForgeRock, its in companies expected an amount have or sight Sajal to QX million. prepay $XX of line year loans as which

shares over look to program, of In under program ATM launch issuance of stock announced that not we we an year. coming we have and issue today, the issued the as November, although shares any do

this questions happy to remarks will our from take prepared you. be So completes and we

time? you the could at open line please so And this operator

Operator

We our come ahead will Finian Instructions] question your session. go Please now from first O'Shea Fargo. Wells with will with [Operator begin the And question-and-answer question.

Finian O'Shea

you and the want then quarter? does on that where net you right gave know on and such, a Good bring fundings afternoon. say, do you be leverage. overall with ForgeRock of BDC everyone. where And to I for in terms next repays now? leverage couple Sajal but Hi Question guideposts

Sajal Srivastava

to do take Chris, Sure. want this you actually question?

Chris Mathieu

Sure, yes.

gross we balance the on do at leverage. expected sheet cash fundings the for to have So the current essentially quarter. X.XXx We next are all of fund

don't and but look We would use normal portfolio as just cash in QX. we we QX the increase flows to from well leverage, as liquidity sheet. rather the QX expect prepayments just So balance on to that the into mentioned

quarter not leverage the expecting next movement two. over overall really much So in or

far of on that look what the depend end will would what like look Depending as on activity – prepayment overall at the year leverage. would the we as

Finian O'Shea

Sure, this the anticipated fundings a that follow-up coming that’s commitments? of this for ones And how from both quarter just been helpful. on underwritten, and has you. the unfunded Thank quarter, much previously

Chris Mathieu

Yes, say and here it's – percent I'd from well, XX QX from to TBVG. hundred QX of commit given the existing plus in existing unfunded commitments, a allocation pace or slower unfunded percent

Finian O'Shea

any And final reflects level? much color how that question, at liquidity borrower on give just us you the can

Chris Mathieu

Yes, question. great

it's So, would utilization I the say, say than that function a would balance given versus burn what cash lower is anticipated, of of we think, companies are doing expected growth work I our to portfolio rate. I this

environment think not all it's growth costs. this at I in

said having As think, I and between a of line appropriate having beyond. or sufficient balance plus levels EBITDA cash growth, runway, I earlier, of profitability it's sight to

I their So, lower it outlook. disciplined of cash to resources when cash existing growth lower being more effective of and reflection just would is utilization comes rates use and say the burn more

Finian O'Shea

Great. Thanks so much.

Operator

question Crispin ahead our with question. And go your come next Sandler. Love will with Please from Piper

Crispin Love

everyone. afternoon good And Thanks.

you three as investments for you mentioned, you looking your confidence those what or filed on some types Just deeper – can release, and there? And now category, percentage comments you but your on to looking a you recovery companies expect Sajal, a as quality, bankruptcy recovery those either right have mentioned since recovery investments, investments for quarter of little what but at of dollar first the in on types basis, then asset zero red end. into at that dig might

Sajal Srivastava

and remarks, that said they ongoing I assuming But for Yes, our circumstances situations develop. or confident today say, are see again, of prepared facts we in as give to or because hard so occur. mean, as are full obviously I it's these to we think, believe complete generally recovery, and information I expect to developments to just we would full in continue

Crispin Love

And of some to from environment, just – additional can quality the in portfolio, the outlook separate the those just near thanks, we And environment? then over investments? think might Great, then term credit bankruptcies Sajal. speak you thoughts just just seeing in current would given see if relatedly, kind your you if be broadly we the

Sajal Srivastava

I'll Yes, ask let to me start then jump Jim and in.

is a So, say for listen, environment. I venture direct debt I critical equity investment think, outlook would lending venture

And is say so was for QX investing. equity I a direct absolutely challenging a – challenging would environment

I environment. mentioned developments to and and I exacerbated factors Jim the think banking due in as mentioned, critical conditions the in as venture was market equity further Jim the world think, by it

both sort and So a of much uncertainty if VCs, you the were was as and they that bank add that and time March the volatility navigating month companies the of environment. in venture very challenging for

is to what think strategic events of just not things I delayed you of a And or either so And other those improve. and then or and paused continue. as lot either conditions and continue things see saw financing activity kind

say I'd all worst direct one probably in again, the environment my of investment so opinion factors. from was because quarters And of equity those of a QX

are deploying they to look Jim QX, think, they I are our are – we how VCs QX, being deploying capital, capital. they beyond, selective and are mentioned, select as As

And it's ideally pick and the over into we to think course this so, we going that, have year indicators listen, then stabilize of XXXX. to and up, see

head. sheets. banking volatility of critical – And a and developments the a think, portfolio element the As adding balance the been have and to managing QX cutting and I news credit was things our we been the runway, look in capital lot that, venture their good outlook, again, to the companies brought really think, have is I uncertainty other the preparing again, burn, to

runway for up profitable think expecting may again, sufficient the stabilizing portfolio. it's to it XXXX into of picking those comes stability be the on But investment beyond. when we equity critical direct not all are I or and the rest companies of and year So, the have activity, that over course

Jim Labe

rate, got a it balanced to by But also, I add really Yes, than, to there has some market. But moderate other I situations stressful companies pullback this venture the and going in same nicely. funds, cash, continue can't much been there the time, of conserve through think surprise again, are at no you some and covered is it's some plans not profitability. growth be experiencing amount plans also as the dry that portfolio, tailwinds their growth a to powder, moderate of and I but burn the by number work this of environment. revise in only there more on of mentioned, is companies are paths within

company public, And maybe signs portfolio sheet in today signed which a uptick, an environment example this the an headed. it. not at of but are term some things just given Got is where

end Just the outlook working good looks pretty of and investing. the terms the XXXX for in tech through the year of situations

Crispin Love

you Sajal. and guys. really the Jim I appreciate time, Thank

Operator

come ahead Kevin with JMP next your question will And with Please go from question. Fultz our Securities.

Kevin Fultz

company late that Hi. taking late has Good VC. accelerated ratio funding guess Venture you NVCA liquidity, I XXXX recently should gap or the I'm my X.X a afternoon you're Essentially of supply in to remain in that Monitor shows both shift a about the within of stage own even late is thank in capital demand deteriorate XXXX. highlights the what for in X.X companies of trend portfolio times capital to you. the portfolio, within and could decade which times, to compares curious in terms high Thank further? that balanced, the question. in seeing in figure that what what the quarter supply on PitchBook reached the capital first your first just availability and view figure There's your stage quarter for in at the market mean demand stage

Sajal Srivastava

good a that's Kevin, Yes. question.

the of right? and reliant companies probably couple later look a public multiples. the say factors Those would are companies, as the to is I So where the more public methodology stage valuation we on comparables

today. Jim there prior multiples XXXX where and And a were during companies as so challenges mismatch valuations these number to, and are XXXX the a round terms of for think I is in alluded of again where

some the you've listen, companies to those we valuation? so, And grow obstacle got from so recovery. raising decision. is and the not how is, into the to playbook add incremental – valuation and your But runway, make investors get, just is, for can existing And fundamentally then a your of you for function extend incremental some if Will multiple capital. for your multiple current capital time an hope then playbook it's

of I so in issue a a And so, think other hedge financing element companies. add it's rounds the included market were with the back of down not other on then may rates flat do of to forms I'd come that valued are the valuation preps? are venture decision funds. not on or do robust Do other make I that the that capable funds, for multiples of think they number hard do And this for that is, the in environment. listen stage it participants funds, you PE companies growth round? of; have where, They crossover you funds,

given and those not a so on as they book, compression again private experienced their public used And major so non-traditional to currently book, multiple of I'd their say, marked have participants on downs number be. they're markdowns as active the

or mismatch in the versus what's demand shortfall the supply. also that's so causing the And

transpire, multiple you need good So is you need data points, time you come need what good need to you need to you companies accretion, market. to

And this of in those this the later so year I'd year say a number factors again see why we're this improve But later together. recovery that's so. income come XXXX into quarter or to all next is expecting not

Jim Labe

key selectivity and highly but at. as to lending for look opportunities our tend us these are selective, actually being for The well to be also opportunities in They venture is the pipeline.

Kevin Fultz

it Thank I there. I'll And appreciate you. insight there. Great. leave your

Operator

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

Ryan Lynch

throughout be given use the that prepayments just certain primarily just one first existing to and deleverage new My of X.XX companies assume repayments on portfolio too XXXX afternoon. ratio good to balance will and majority Hey, you'll Is of commitments funding to sheet? that it the times around fair aligned are that and pretty much has of unfunded $XXX your million with current do leverage milestones. any

Jim Labe

Yes.

I think that's correct.

Sajal Srivastava

Yes, I think that's right.

Ryan Lynch

I on come, you that fine, one legal Club. out there's I hear it's say and can't is that decline had, articles as like mean, if in I'm thoughts and then as – a love the I'd your well And get hear sensitive so revenue I you business. fees can been that talk but other huge The investment curious to there the Pill whatever it, bankruptcy to in just Okay. but huge about

can't or that. or collateralized, cash they're something I sitting see but that of don't see something your I so don't like know a it’s – like Now, over I on loan financial, if bunch is

guess in the… what the you - mark specifically are in pretty loans portfolio in other that The gives pill are it guys process as But you the where through have in that period, investment to investments that bankruptcy of well sort Clubs of the par. bankruptcy marked What that deterioration it other or the you where to are going on gives close that there's I this despite confidence as any of confidence you Pill the or and either these fundamental kind mark is

Jim Labe

answer me that. let Ryan, Yes.

great question. a think I

shut necessarily the go remember have to that paths easier that to you they're – down a through company if I to So wanted bankruptcy don't process. you

you parties. assets the collaboration to reemerge with in in free-up assets, those look or there's those C what's to there's look to in to our other there's the at those to value these select you sell from assets funds, interest perspective when value company’s So path either at and best investors

playbook our it's assessment value of managing with playbooks teams. function in stress underlying a our a would So of situations, say our and credit I there's and

cases we're – so as And there as for not doing to In have. formula a that and these so, are right which discount. the a assets secured so I you companies by certain to generally by the you recovery then we're not only look method inventory financing you based financing, when said, various financing XXX%, we're would say look inventory, it's

secured by the too. we're enterprise So underlying inventory, have plus that we

property a When those unlock So say and intellectual its free. other an that out it of you assets in benefit there's of underlying acquirers There's senior things business, recovery and to again, be. want as look scenarios, to the value the the and there is then you generally cash you the this whatever orderly liquidation then we again right? broadly, to process when creditors. you they look through And look liquidity, look way financed again, more the so environment, as to asset the clean great, I'd to may

a think creditors. right, themselves, these and when businesses, a bankruptcy unsecured companies for may they solid way or there's I there's claims again, have strong, So process fundamentals of but

going so sell another give is debt cleanse, or clean Chapter again, the back secured through come shot again to then way in up, restructure other it companies. process a And XX to and and general

it's that, playbook, our of with companies, think the collaboration underlying action assets. assessment I values that's those set course and likelihoods based team's to again assets. the And probabilities, and and look path our the the determine how our values we the on fair of the and So of in the assessment we of

Ryan Lynch

potentially and of I picking Very in today realized equity well of last one detailed, capital it year in if just I'm venture into investment high venture the are throughout with that, losses in portfolios. you meaning up that drivers what you most investors just momentum really behind sort like just continually some one are could, I because seem year that things your that then going then of XXXX. just the appreciative obviously system get capital curious slowdown probably economy. this momentum position later mentioned the think And There's been the lending probably indicators fairly tighter rates and stress seems to the some comment.

investment I that you'd the you obviously year are know think case? that later that but seems guess, that what activity I that and the just XXXX, reverse could this in up factors make it that like pick in So to

Jim Labe

grab that feel... and I can

Sajal Srivastava

wanted... did I

Jim Labe

looking so it investing. but, is interest there's reasonable valuation these to market capital are Two, highs plus my is for $XXX that future. it's deployed. past, are dry about and investing a headed of towards are? are get Feel a powder of funds quarter long-term more or typically or Sajal looking the venture increases. Those this there's the rounds plus to in They're recent and and momentum and for terms we of another irrational call in long-term, Well about one, after billion type the of the rate they're at the factors. Yes. looking are at add not free not factors What the XX-year investment today's

if or new Three kind the appealing if towards very may environment the three, of investments of investing more couple all particularly whatever that's and head AI, here we dead last, these are towards proposed and is in very high and which a something folks the be tech artificial IPOs. valuations as conversations look five years – of because years is is as not efficiencies, anything, is everything recession it else

have as finish, investments lending in and the some down opportunities of and were best periods. well And here successes add of TriplePoint so and the been free tech at feel past so forth. the best historically Sajal investing We're there's born a as to the XXXX decades cycle XXXX, some done just cycle perhaps we've I'll but within down of in venture these

of ripe next investing the future. lot and So year, capital in year for venture things there's up a later shaping this

Sajal Srivastava

Yes. Ryan gleaning insights, the has I function. this cycles that with have new definitely of we're get a talking It's from it's funds of One think we're question the potential fund as market. to through is the, time I'd have come best building what I a that mean, of that's themselves, been for over to What I'll companies is and only the the opportunity second, and seeing but view experienced you to environment entrepreneurs quality the its clear add is building do done, but conversations storm necessarily the deals that say having also when is the we're weathered things. two and that more these some momentum capitalize? it's not

communication of then their to the other from investors. is And say the I'd piece it just

LPs fundraising. [indiscernible] their to So venture

the expect the that's Given it really they're of and on signaling vintages some the be also going that environment. expect, the do better XX they messaging, to they vintages their up fundraising and vintages, given XX that and marketing pick to

Ryan Lynch

the appreciate this I Okay. time afternoon.

Operator

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

Casey Alexander

it afternoon. right. safe Hey Is in non-accrual second All go Good on and Favor to all say the that will Underground quarter? RenoRun,

Jim Labe

unless – more Unless would happens that fair something assumption? something that immediate be a so yes,

Casey Alexander

Okay.

your to that pick pod. looks contributed cases to I management rolling process in in underwriting Hey flaw relation of fraud Hey Favor underwriting both form same the up me existed there Health, and that and there Health? in were is on back Medly Secondly, you the the to to failed mean, situation. of a And Medly in Favor to out situation like came it they they that some

Jim Labe

Sajal will Okay. answer.

Sajal Srivastava

again our we we've XXX as look track XX. losses by our to stand and obligors credit or borrowers you in underwriting XX Again, not. we've had record, TPVG Absolutely at had roughly

works. say I for are loss Our speaks record X% over underwriting the our track itself and rates of funding, that long-term would data of commitments, our X% so the

I filings And first so circumstances they're at the the companies and are we're Medly, that's again, suggesting answer. both I'd Favor, it's in again again not public Hey at – say say, all fraud think suggesting where fraud, think would and situations. not in I unique I

Casey Alexander

All right.

I'll, Okay. now. for there Thanks. I'll stop

Operator

line go your your is Mr. ahead next Christopher question. from open. our Nolan, Nolan come will with And Please Thalmann. Ladenburg question with

Christopher Nolan

two Canadian in of Sorry companies going guys. that VanMoof and earlier process? into were Is the IQ, you bankruptcy discussing terms the

Sajal Srivastava

Canadian one was The RenoRun. no. No, company

Christopher Nolan

Okay.

I from believe are HighQ So and which non-accrual VanMoof are this both separate quarter completely that. [ph] [ph],

Sajal Srivastava

file did for not They're Correct. they bankruptcy. not –

Christopher Nolan

Okay. that that? something Any details that you can to is or provide on

Sajal Srivastava

we as well and environments their processes. in some as of market were I during they think the remarks, as Again, downgraded due mentioned their financing challenges prepared their to just performance

Christopher Nolan

Okay.

it Thanks Sajal. Okay. me. That's for

Operator

concludes this question-and-answer closing I'd the our to Please for or any turn over back go marks. Mr. ahead, to Labe Jim sir. conference session. like And

Jim Labe

Thank you, operator.

We always, you to everyone all talking again a for day. quarter. As next thank forward again nice participating have everyone and I'd to with listening in call. today's look like Thanks and Goodbye.

Operator

you today's Thank presentation. The attending for conference is now concluded.

now disconnect lines. You your may

TriplePoint Venture Growth BDC (TPVG) 3 May 232023 Q1 Earnings call transcript