TPVG - Earnings call 3 2023 | TriplePoint Venture Growth BDC Corp.

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Operator

Good afternoon, ladies and gentlemen. Welcome to the TriplePoint Venture Growth BDC Corp.

Third Quarter 2023 Earnings Conference Call.

[Operator Instructions] This conference is being recorded, and a replay of the call will be available in an audio webcast on the TriplePoint Venture Growth website. Company management is pleased to share with you the company's results for the third 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

make over you condition, Before any financial are I direct the The statements attention company's call, update by that that regarding statements required the during the to future forward-looking federal Mr. in will considered any I'd safe disclosure press like this your harbor law. to relate certain customary unless to events under or forward-looking future company's company or turn to performance does obligation Labe, statements forward-looking statements which securities law. call the projections not release or undertake and management remind to

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

I'd Now the Mr. to ahead, over Please conference go Labe. sir. to like turn

James Labe

and everyone, call. quarter earnings TPVG's third afternoon, welcome to Good

for results the quarter. to Turning the

focus be on the markets. us to priorities Our navigate through continued current challenging believe will the we to enable

our the maintaining for is and focus liquidity, power managing our Specifically, future. strong portfolio our TPVG positioning and earnings the

over share. remains investment distribution covers Regarding overearned and our again the million net earnings our or our NII per distributions the on share, power, of we share. TPVG of producing that of IPO, shareholders We once cumulative regular term. per income, $XX.X $X.XX $X.XX NII, or Since generated focus have the during $XX.XX distribution per the long provided quarter quarterly

income yield and spillover achieved average $X.XX end, a interest May quarter's of prepayment quarter benefiting as of an portfolio estimated July. third TPVG well as also favorable share rate during the XX.X%, the both we increase of income. from weighted As per for have

TPVG unfunded opportunities new and unfunded liquidity with repayment capacity We on quarter XXXX. we experienced higher provides into both us reduced as the successfully investment commitments ended and heading liquidity commitments. activity the now capitalize with increased to exceeds

shared of years. issues. we've third monetary National macroeconomic amounting venture lowest quarters, capital to several chain, other Association Venture investment to and the markets decreased venture relative the restricted backdrop given Capital quarter, policies, NVCA, quarter data, the As last remain inflationary geopolitical for According challenging total quarterly the X prior supply the uncertainties, past to in capital overall activity the PitchBook

relevant XXXX also in and IPOs into versus only billion PitchBook PitchBook. includes to This billion prominent transaction, points levels actually in of They're second a included was These numbers XXXX exit the featuring and quarter. 'XX activity This through are companies, investment Instacart. billion Amazon's venture growth well PE-backed $X.X $XX.X the in venture in experienced a out billion we below highs period. 'XX according late-stage aggregate $XX.X to comparable said the Having some $XX that, companies the in billion activity versus Anthropic. a activity, pickup period. stage number investment $X more and very into ARM, and Clavo quarter-over-quarter, and TPVG, up to third quarter the

were sizable transactions These exit significant and created opportunities.

a year capital point expectation we a within weeks, to to gradual we investing. be some and conversations capital XXXX includes outlook XXXX, will VCs and on for venture entrepreneurs, we've the investment more general pickup potential for the out last more and glimmers in we the are be rise conditions remain a are seems investors year activity funds lending. next that their and sentiment investment among citing see the This witnessing in in had the signs, with which recent as many While venture early active active expect few which same do close venture a momentum. in to the investment for There

This until The one to overall investors sitting its return There in public been more their waiting funds investor that deploy the the is the stabilize. in however, to path approach. materialize more the venture multiples X to has sidelines last further to of sentiment not on a conservative by in growth that market, dry years market market new venture a begin believe and is continues powder. amount a on robust is that investment by will VC significant actively raised improve be emerging, capital supported reality deployed. We with

demonstrating managing the market, deals investment projected today's principles changed. is burn path getting and a to the operational profitability. For cash on done have emphasis now in The

where to or just opposed at sought growth principle costs. the venture X As ago, guiding X all investors years

into, While increase our allocation changes, of get we opportunity to as able reflecting new continue this finite market we we be any reality. growth of pockets don't expect ahead. to And to quarters stage will find in new investments to the I TPVG for expect investments

quality. credit Turning to portfolio and the

teams will the and ones, developed some existing situations our cover to the others dollar-sized Sajal continue through during more brought quarter. conclusion, work detail, during smaller proactively in quarter, As to which manage credit

acquire remain for billion. Our some traded company, in notable announced SP environment. our portfolio quarter developments transaction, with $X.X publicly stressed closely were the engaged Metropolis, our and a portfolio There teams this Plus companies agreement an significant in to

BioCore, their and Lite, as video athlete an Monzo acquired sports progress rebranded as to operating notable proprietary challenging and overtime, achieving in in such sync Flash, companies and infinite others well they're Erni, data from analytics continue injury serves as make Caldera, whose system Portfolio plans this and TempesxMachina, positioned technology for Core environment.

in the market Valley year. long-term earlier Another this crisis positioning lending Bank wake Silicon leadership priority venture the of focused remaining in the TPVG's is on and

even backing to next venture continued such investors, and with without tech when SaaS, such investments there diversification robotics, rates companies enterprise are teams and having the those sector cash management in proven and year, TPVG tribute or improve, for conditions into business whose and as is customers. be This activity. economics venture unit in both market rotation strong as we from recently recovery companies ready artificial preferences runways, select technologies, for capital, includes fresh bases includes Heading with groundwork large customer generally broader This sustained a and sectors. models have high and enterprise fields capital transformative our setting raised health prudent intelligence, other having retention long overall

We'll future. are to we investment portfolio out as also while continue close conditions coverage evaluate in and In same we while these debt-to-equity opportunities. maintaining on expect the hold key credit other and we for the are our metrics XXXX, sites set sizes, preparing summary, quality, to remain and

portfolio benefit improve. when to to liquidity income strength and position building This on the further these company and expect our positioning maintaining Given strong continue includes strong investment scale of markets our yield, we existing financial to while strong the TPVG. deliver

range. our goal on the landscape building to diversifying and leverage portfolio, dividend portfolio time. the sheet our balance the stabilizing targeted value profile, Adding asset our the and our change new and pipeline of with a lending borrowers to sponsors. net competitive over-earn select Capitalizing in of over our to continuing opportunities Returning growing maintaining from yield further strong it

market relationships, tenets on the returns to as TriplePoint opportunities to core the the order the the many I'll philosophy, priorities TriplePoint in same wrap up long as capitalize is cycles. these focus investing term. we references years lending market over of remarks continue in reputation, we'll and here, term, on many for message long throughout continue that is and about Venture well discussed with to sustained

over me that, to With let call call over the turn Sajal.

Sajal Srivastava

Jim, you, afternoon. Thank good and

AI to reflect given included TPVG allocation companies third other platform with compared through health term elevated leverage smartphones quarter, conditions. of to prudent the quarter, both we venture Capital, investment during TPVG's Venture originations $X.X term investment in using commitments a technology. to million to in to new company X the investors, stage market of sheets adviser services approach patients by TriplePoint Kay to their global TPVG. company, our Health, current to signed X Cedar market growth During which to new our and provides Hospital across sheets allocated QX, remote portfolio of conditions $XXX platform ratio, backed This Partners, Lee light care continues TPVG access a regards Primary the with our and $XX companies Ventures, Sinai which With current new million in and million

during These funded carried $XX.X remaining in $XX.X During level investments utilization portfolio for This XX.X% and of companies. million of unfunded expiring during the our $X.X the quarter. investments and was quarter, $X.X guided made came use TPVG our commitments debt new a yield unfunded was to average quarter, debt funding in range X million commitments portfolio in portfolio disciplined the Of commitments annualized companies. below of third related continued the lower funded from quarter, existing origination. funded by to million the capital million a the reflecting weighted

range quarter, to to funded to million look continue $XX in so the we million As the expect $XX and are fourth to good a we million far. off fundings start with $XX

we QX, significant During reducing our ratio our liquidity, net boosting made our and reducing commitments. unfunded leverage progress,

our fact, market our as conditions as improve. liquidity capacity almost investment is today, enhancing our of In double commitments, unfunded total

our $XX.X our for loan debt average on QX, prepayments the During annualized million of weighted yield total increase investments quarter. helped XX.X% portfolio to

XX.X%. was income, Excluding portfolio core prepayment-related yield

QX expect rate and QX prime the in core benefit XXXX. the in yield in into to here increase our We investment

XXXX. likely upon of We announced our fourth completion loan in with are expect in loan levels $XX million lower second quarter its prepay half and to the prepayments transaction of the expecting Metropolis of

of our investment debt our representing was represented XX and portfolio of company at investments XX% end QX, cost. XX, companies our portfolio the different debt XX top At count subsectors, total

value $XXX environment million QX, with and companies companies companies seasonally raised third our reflects year-to-date. held capital, challenging investments lower also both equity with activity XXX in well capital debt, the the portfolio We of warrant quarter. with as with activity fair respectively. XX million million $XX.X associated outstanding cost to XXX our total debt $XX of fundraising $XX.X of raising a bringing X of This as level portfolio the total of million, and in outstanding In

our capital up and As raising going for rounds activity for reflection market to with quarter, to within imminently. one fourth especially in we on progress XXXX with QX to picking million are the positive companies portfolio raising into conditions, of companies fundraising a outlook making look close towards pleased quality company We and see another already portfolio million credit portfolio and QX in capital is considering portfolio of $XX several activity this $XX in well quarter, bodes portfolio XXXX. our early the expecting believe here the we

a regards rock from from With the upgraded quarter, result during principal Category to liquidation received we for its proceeds $XX $XXX,XXX. credit prepayment. with $XX.X million Category to a removed and exposure from $X.X the of of as X reducing our X We Rental loan balance of quality, X million of metropolis to million Category Run,

until asset XXXX recovery. full, are X expect Category expected and to represent paid will off is we occur in We to in Run Rental remain a which XXX%

During summer, market to the e-commerce higher inflation in manage path during sold, and the sentiment, third normal goods consumer quarter, they of ongoing continued experienced issues, including lower-than-expected companies as consumer and cost sector-specific certain profitability extension their impact and than in and challenges to runway on efforts, negative of revenue of of customer portfolio costs, strategic increasing inventory acquisition levels their efforts. our addition continued developments through

$XX.X During the companies principal failure Nakd downgraded the the of to to of companies a World balance Voices in combined a for X as of Outdoor consumer ratings quarter, $XX.X total X e-commerce category QX. due million combined of and X from we value and quarter, total these the diastyling, category with One developments million and X credit

operates Casco, X balance the Cenrv of quarter. the as Mystery Tackle of in of also with a QX. X fair rating as and combined and principal to X million $X due million X, as from $X.X companies companies which combined for consumer Box, these Category to of total credit e-commerce also which operates total and Project value also a We XXXX, developments downgraded the Category

year for X our with QX positions the a and put companies XXXX. boost potentially and better of in important see strong generally out e-commerce category close could quarter, Given believe retail, holiday as them which could upcoming they season, and an we some is the a for X companies, quarter consumer

off Labs, was financing and operated X. announced with strategic Renovations, its was the assets. its Untitled business fair which in to from unsuccessful selling value company a Category in QX the loan Category a it of under X pivot $X.X closing of as After of efforts, and that Made downgraded business the October name, and million certain

Our recovery process. our amount that from QX expected mark represents

bankruptcy HealthIQ of with its removed value in a $X.X filing. QX of as result a Category fair loan of QX as million was X from

due company to had As mentioned challenges quarters, downgraded raising ongoing and in efforts. with failed execution strategic we company's prior prior and the the capital

could see restructuring the in expected have during its written recovery to As that a call, ultimately, quarter's and QX situation with and to key not an to come agreement we we process a on entire extended that the had we process and and stakeholders, was enter into parties were bankruptcy result, behind in position us. plan, we And put instead. last mentioned company pursued disappointed full off to liquidation as the our

One and recovery quarter, by company, adjusted enterprises X During e-bike for the VanMoof, and engineering applied. demand loans X positive of a in scooter McLaren On the electric firm, based we the values the Lavoie, more the during estimates. fair sale also liquidation, unit Formula was on Category technology process portfolio the updated X underground acquired note, or loan quarter, of Category

forward former private looking Gravel the equity One and next and their Mercedes to their the Formula journey of working with our Fry, Capital, Chairman, sponsor, recovery. phase CEO of Nick VanMoof's the U.K.-based are team for We

currently closing the debt acquired include fundraising as companies ongoing stress believe the overall will that and we the the not process the for reflect venture as macroeconomic circumstances of intend to the at combined are private over year-end. sector-specific to well during equity securities investments in and We will coming liquidate transaction, the as certain well companies of as recovery assets M&A well in challenging public security Lavoie estimates certain the and conditions in any capital are in and quarters. VanMoof, as otherwise our both equity assets continued market combination recovery for the directly to the positions related revised We in TPVG's market continued the year related environment. revised Lavoie of a quarter as in and the by our scheduled

QX shortly. of to And as can are market I we remain in beyond. as succeed While and over starts, have past couple to reality, we and we the companies new expect the in seen this XXXX XXXX of conditions describe portfolio and see, market momentum what respond adapt to building favorably many currently here from same we believe our will quarters

raising and a had of tailwinds driving with profitability capital. additional have companies rates are economics portfolio A businesses, to profitability, year having cash or almost having strong for revenue Our their adjust unit now significant expectations reasonable achieved to number also lowering companies to to burn in growth path and margin achieve managing having realistic seeing and runway profitability.

navigate will As remain Nevertheless, see we credit we decline that look proactive as portfolio. to XXXX, we our currently their new and believe and see continue we begin to and performance to to market companies due we execution potential developments adaptation, we stress from despite conditions conditions. and portfolio will and positive diligent our these manage events outcomes will

preparing of companies, quality growth focused in and returning for liquidity In our XXXX. summary, credit frequent position are on and remaining portfolio financial Jim as portfolio said, in with contact strength we stabilizing the TPVG, maintaining to

continue expect deliver while yield, strong markets income, Given further existing and we improve. portfolio scale when to to company to positioning strong investment the benefit our

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

Christopher Mathieu

and Thank hello, you, Sajal, everyone.

loan $XX.X ATM third quarter, program, of liquidity core the we portfolio, During diversified generated as due as average This well the our in commitments. income investment the the while and third a as to quarter loan use from increased of unfunded reducing of XX% million unfunded in quarter growth net on the investment compared in was yields. the We our in of Total for through commitments. higher XXXX. our in commitment new substantial reduction accomplished portfolio increase modest high-yielding balance prepayments was and basis. expirations was commitments interest through sheet income fundings size reduction million position successfully leverage to $XX.X loan loan The excess

G&A million $XX.X Operating on These the increase recorded $X.X XX.X% as the legal the quarter Our year Onboarding compared $XXX,XXX was and continue XX.X% portfolio to million $X.X We excise the strong management to and yield sizable expenses to $XXX,XXX year. tax investments quarter $X.X higher expense for for of the of stable. prior third compared consisted in of be were debt full compared expenses $XX.X for this spillover income quarter period. million total as yields XXXX. million prior to expenses of of elevated expense, million of estimated expenses. and fees interest of due to

for during With expense million the months shareholder-friendly the requirement X the and incentive $XX.X the return under total structure, by $X.X quarter fee million our fee reduced ended was September XX. incentive third

portfolio. million, quarter per per and Net $X.XX and same of investment on XXXX. third of investment million were losses net We the adjustments. from of was million value The HiQ, net change investment the resulting losses million, for the debt removal on on $X.X rated recognized $XX.X period, during in $XX.X period unrealized portfolio X million in investments unrealized that realized of unrealized from consisting from recorded list portfolio previously compared equity our or the $XX.X losses write-off reversal gains million on income ended of of realized million share -- the fair the was of which its on of company $X.XX the watch and primarily share we $XX.X to investments XXXX warrant $X.X existing net $X.X our or in earned resulting

XX, As company's share per million million, $XXX.X end, XXXX. as assets of share to quarter $XX.XX per net June or the were compared total $XX.XX $XXX or of

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

$X.XX income, period investment to In regular end in which third share future. over-earning the continue additional retain $XX.X addition net dividends supplemental support totaled to the we the the or and million at undistributed to per dividend, of quarter

the strong portfolio, dividend yields of loan quarter year full was XXX%. at date and the size coverage the again Given strong to for this Coverage was XXX%. the

liquidity on sheet $XX certain Now We status investment unfunded just million $XXX overall commitments, quarter the down of commitments, quarter with company last balance leverage. from third in milestones. update dependent the with an million the $XXX million portfolio in reaching and investment ended unfunded upon

unfunded commitments these of contractual interest have floating All investment rates.

here the set prepayments, We of revolving $XX million $XX $XX of had of are amortization, million $XX repayments under early million total in expire and principal structures amount, liquidity million the during $XX of to Of generating million scheduled quarter. QX.

As of cash we of facility total facility, million our to and credit under end, pursuant in end, for credit facility. future appropriate. $XXX.X liquidity on enhance our million Near paid to flexibility quarter end, revolving investment $XXX requirements. quarter credit quarter decreased increased company available the as XXXX of consisting availability $XXX million, we had the drew credit certain After leverage and Act draws the the under down facility the down

well for In this contractual which flows, provides liquidity. current existing addition sustained to portfolio bodes the liquidity, cash

capital $XXX available an has We maintain XX, continue a million on as rate to which of total was million fixed $XXX $XXX aggregate credit and structure. commitment was investment-grade a outstanding diversified of term rate in revolving the of facility, notes September And floating outstanding million.

interest Our were leverage floating our our and rate rate of quarter benefited fixed increasing rates debt of have at investments sheet end, balance while account at for XX% borrowings over time. from outstanding XX%

ratio ratio to quarter the leverage a 'XX. We X a quarter favorably steps and of net ratio occur have compared net X.XXx 'XX of to compares the the X.XXx latter maturities leverage X.XXx. of This to XXXX, compared and the a ratio maturities with of in are set a ended term was leverage X.XXx. debt with leverage prior to We to

the to during the end ATM level delever sheet proceeds And launch XXXX. the to we the third announced first through issued of of our stock net program. Last aggregate and maintain we we expect balance $X.X year, leverage half quarter, expect the of of common this with the of in We year, million.

end And asset the had the issued $XX.X of were program. quarter, still above value, accretive we to Given net shares under of the cost-effective issuance all as million that available NAV.

and today, remarks we'd your happy prepared our be answer completes questions. to This

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

Operator

from question first Wells our with [Operator Instructions] And Fargo. O'Shea Finian comes

Finian O'Shea

fundraising Sajal, that Is to downgrades. to pullback First you if venture part portfolio these Was some gave it question how does that this on color on so, you a the translate of there your downgraded? related for that. to issue you capital companies? a commitments visible sector? e-commerce see in sector And

Sajal Srivastava

Yes, thanks question. for the

was companies. for portfolio is not a strong were portfolio is certain some sector these to e-commerce where were to summer, So companies specific enough, a as a negative platform again, Interesting some set companies weather all I This think great had and particularly or of our impacted success saw and consumer of the This sentiment. going we've the be a as historically. really downgrade well. to weather mentioned, during favorable the of the number portfolio TPVG

changes consumer we their negative And level saw Facebook the information of that Google of so customer search and course from sentiment over increasing costs. that year like the algorithms plus, again, that on Apple, acquisition share, folks the and they

So mixed. to the elements certain and it's with financing, again, say venture regards sector to I'd companies, to of specific say I'd specific

e-commerce We seen doesn't and this a are that to we of outlook in and would again, capital the -- are a to I e-commerce companies. our it's sector companies number we're change portfolio have balanced consumer. them of seeing overall and the consumer year, approach and say, have raised

Finian O'Shea

of do the cetera, currently? power the of Where earnings there's dividend, to continue bit a to you'll a on Jim of That's but dividend. payout your portfolio, this the follow-up XX% just as you fee would BDC helpful. And have sort incentive And overearn does the mentioned see following mean have deleveraging, like back rate for sorry, exercise? and you run that the course, $X.XX on. deleveraging et of the -- what you turn settle

James Labe

good question. Fin, Yes.

on the have analysis thinking overall and I impact think the about on done coverage. some that we

that the given generated are if right up being and incentive at $X.XX the for that's bring it have, as leverage but to had, long-term we fixed of far we've see think dividend, NAV. the looking the still Given increasing fee now NAV coverage it given rate dividend, right the that higher going consistent we fully Right make stabilizes, we forward, sense start once the number now and a the well strength even level strategy coverage. doesn't portfolio ratio, maintain as maintaining yields of rather back the scaled the leverage the bodes as now solid we

Operator

from Piper Love with Crispin Sandler. comes question next Our

Crispin Love

HiQ First just amount quarter, the And the there third any that write-off unrealized the as quarter in what recoveries loan? the previously? incremental was loan off, any are there write-off on potential expectations and on that then the in for well, on total that wasn't already

Sajal Srivastava

I'll Chris, the you Sure. with numbers. start the business and give if can update then,

not So additional I Again, would this expecting we're past wanted move we say, on. and Chris, any no, get recovery. us one to

amount wrote of the off we So our loan. full

Christopher Mathieu

$XX there not million, the was $X the million quarter plus current $X And $XX realized NAV. It's million million. total loss that in impacted was about and

in So already million the or in periods. rest unrealized prior quarter current million $X of an depreciation and was unrealized $XX had the previously been loss

Crispin Love

Okay.

bank just about broader any then pickup question competitive from year? turmoil competitive the involved there? just That industry any space banks or the shifted activity the the I'm lenders And curious or talk where I quarters impacting you and the you -- that's last this others could sense. private earlier environment. a or since seeing recently landscape in guess, the a has recent just getting Are how on the over if Okay. few makes environment or from competitive

Sajal Srivastava

the of down. would say you've And continue of as deal that I'd I nontraditional nontypical see we anything, volume slowed pullback reporting us in overall, add, to then would participants seen the say, just I market. has if from non-long-term most Yes,

the has changed. so wouldn't anyone And particularly more dynamic, share on necessarily say side, tech taking I is materially competitive or the market

Operator

Ladenburg The comes with Thalmann. question Christopher next from Nolan

Christopher Nolan

we leverage, the in that fourth Given levels levels the remain cash assume the your elevated comments on at should quarter?

James Labe

Yes.

Sajal Srivastava

excise And in than higher then should rather the -- of maintaining read comment NAV comments the increasing the taxes going Jim we terms a into dividend, forward? can then and that

James Labe

Yes. Yes.

earning we we so about additional far given I'll $XXX,XXX So year. of over catch-up were to call consistently that an this had this it, accrual do, quarter

we of level So the the tax should a higher end excise through expect year. of

Christopher Nolan

of applying venture the A looking how don't comments And while you effectively venture to on if you the bar where terms capital that at article investments whether raise new believe it? an possibly anything any capital not would standard talking know like in about in of the heard And I final Journal have, of question. if ago, I SEC fiduciary investor you was had responsibility the the a have companies. it or and

James Labe

I -- group of whom not about the investors select generally too relationships, with in look have would we very a table, not capital that just I as looking their had that deeply. Chris, around very fact comment, portfolio active or the only given work heard investors we've venture long-standing well. companies they're

and so their board involvement with opinions. their their with with And strong seats

active with their portfolio I our investors are So pretty well, would our could I would thing. good or in -- say, I guess, it generally, portfolio general. already be viewed companies a as say

Operator

with question Abraham comes Vilas next The UBS. from

Vilas Abraham

expected quarters. the you from in of on high QX? the the nature received been of as a quarter, they've Just you as in forward have that may in Is repayments of the pull prepayments what any there that couple

James Labe

not really. No,

prepayment, was that prepayment the the occurred ForgeRock that's we quarter, say, had that this of the and a not event. indicated was share we a largest expected QX So pulled and lion's that from,

Vilas Abraham

going Okay. beginning of think we And just really what be year, here to look next like function is deleveraging a in prepayments about first starting that half? then of as the the

Christopher Mathieu

Yes.

principal of through. comes portfolio of contractual the You a schedule of think just the combination the aging the normal repayments, and that it's

prepay loans X quarter. We loans couple a half each of of usually, the maturing are see have X first also in that or the we year. And

see some still even to we prepayment a if So expect it's that. more environment, muted of

of So all it's of a that. combination

Vilas Abraham

expenses, looks legal bit All you was that. item right. here. It a think, the here come And in like in Is said about part QX, of something QX? is G&A $XXX,XXX And one main in I on a I think potentially that is up expenses. little out to that going

Christopher Mathieu

Yes. Correct.

had Chris tax high So be will likely not similar legal think level be elevated mentioned and the earlier. that could I excise of as

Vilas Abraham

Okay. Got a bigger question. it. just then And maybe picture

months? mentioned And of I'm with that's and investment up the the little XX to is think had function if the do there, picking a may that You deals being over you opportunities they're that while powder the what Or for a VC quality valuations to guys do of are for And function curious, where kind that it a more think next a we just bit. very comfortable of latter, here dry the activity seeing with do see now? XX the have it have the means is they they now? of you investors something

Sajal Srivastava

little I been or to companies, opposed terms excited latter. new of handle several here Yes, smaller as where absolutely they be the the to future. and stages, it very is but TPVG, with the to in terms pretty shift. the not realities at And that the -- opportunities is path many investors what and that investments That's universe in just there's the it's for ago these that managing can opportunities consider a we -- select to as in they deal particularly now what investors, I the we're sectors, was certainly by venture mentioned, profitability only are which new top least in in are emerging is can of We're here driven opportunities There it the in less deploy. it's of focus early that. background, speak growth. there's the burn I pressure not a the more today, not are many particularly market years calling cash the at we but of are the

Operator

Lynch The with next question Ryan comes from KBW.

Ryan Lynch

working you your of investments. mentioned a this the call your VC First source would focus what sponsors with to question had really on group is you was, guys' select call top-tier in of past, and I kind

versus you top kind a out group much selected you focusing Given experienced the to tier group? credit VC or issues that this guys but a maybe cycle, sort on wider more venture in most what have guys modify guys of have more that recent down you of curated top -- would call top sponsors consideration any and group to put strategy of branch

James Labe

Ryan. Yes,

our from long-term to record. again, question. interesting very our look perspective, think, a track we So Listen, I

companies these our So years, cycles. interactions obviously, portfolio over and our our we're looking relationships funds multiple with multiple and to

And inception. the our XX-year time record so I'd to continues again, over since TPVG's period track strong say be

Having with with on with position work that said our evaluate their our the in always market, review them, funds we that, inter interactions record. performance capital and we them, based track selected the their

not benefits from it's that experienced list right? So a list fixed It's track living, a record. breathing forever,

And of say I combination a fundamentally both. so it's would

deals we the with, and So realities on yes, relationships correct has venture it adjust it experience also folks based of in and have the changes the landscape. it that and capital performance with also but deep

Ryan Lynch

stress I then into the credit to wrong, what Okay. in sort Understood. Or expect correct said believe believe, and that? continue have it decline right into And that as to based big last exit XXXX, feels you trends, that me sort in there's effect move on XXXX. current we shift your recovery Because in give seems VC you you to or it I'm I'm assumptions it's of whether I that if it order be confidence are a you portfolio. that you macro are that guess, curious, changes investment guys Is now, statement? sort what of marketplaces, I the like sentiment? would there just VC to you that or occur using the in in unless could well fundraising gives need like in to confidence to going of opportunities, for any

more? you I'd that to bit So love little have unpack a just statement

James Labe

absolutely. Yes, Yes.

we're I I is metrics that fair materially direction going for deal market our not prepared overall are a fundraising we're perspective VC here of XXXX, of standards amount also in market covered The the say, had success change to again, perspective. the a expecting realities it almost kind a to new and our But to only now right? the and So the new environment environment into but in have overnight. portfolio the QX to again, venture this operational ecosystem in remarks. an and change the have flip in think from what capital other what with then conditions companies the capital venture early not -- year would is from economic it right, seeing, not I of But understand

being about solid that you investors hyper balance between driving either or about cost. talked can talked We profitability, convincing incremental with having unit growth how and We all profitable burn managing financing. at to path an economics, a

So that making I of that and companies we through. it we're and as market and it's entrepreneurs and the optimistic or Candidly, changing XXXX. recovery our adapting the surviving not would on say of it's banking we're look to hard portfolio work our

that but that the also top -- the and to that roughly in they've companies the XX%, changes, sitting our adjustment. we we're in environment responded are we've explains But right, clearly, weren't of end, successful and XXXX, some and coming have they all portfolio success pivoting adapting to seen. categories we've adjusting have had in feel, given the the that X so that's stress and And I'd say them where again, not we

we end I but the points that not companies think least These portfolio that over, track execution. our and plan, the We're response, fundraising And are at at runway we that cash conditions the on the look companies companies. again, here data positive light the even at amount mistakes, in QX But for, 'XX. is so look then game today, QX can we us the into make of change. again, saying are it's last this as environment and of at the for of things But can go activity change, tunnel. it's small in we at could portfolio start-up as we some piece look look the

Operator

The next question Point. Alexander Compass comes Casey with from

Casey Alexander

me a cash that the the just to down the at tell said more the of from X.XXx. some Chris, quarter quarter get Could you Just meet hurdles. trying credit end pulled couple to you as the questions. opposed facility leverage -- reported much of to I Because how was? at I'm the a you regulatory ratio to of normalized end

Christopher Mathieu

Yes.

to but event next that at is or X X least So say the a quarters, cash -- for outstanding. would quarterly see I would expect that you the that's not average the

if interest weighted So outstanding for calculate expense. average trying you're to debt

same that where larger quarterly asset. doing the a have. there are a approach all I that BDCs that So handful say we're at gross there's have number they would do And a of least tests

gross people most existing to it's found credit through some facility or swaps that it the treasury use up We we use sheet. have And balance the efficient bills. to

I you that guess, quarters most X to another But balance X be should direct, would or cash the answer, elevated. expect for at least

seeing So kind leverage you're this gross of what quarter. kind be with of consistent net for would

Casey Alexander

Okay.

companies are Secondly, couple loans that maturing there's your that you by previous are more those binary a event to date question confident you in in expect And environment the first where will type or on nothing a them your to confident a maturity a of -- an don't How the mentioned have there's companies you you that next allow are the of of those conditions change. loan. financing term of the than response How that part year. timely to creates make repayment inhibition, loans. some that

Sajal Srivastava

this Yes. take is Casey, it. Sage. I'll

wouldn't be I credit we But and list I mean to our watch that's the think on would can that say, that amount coming. natural a future event. fair is wrong. I there extent you those companies wait amortization of I would say again, Chris, would the me So correct was today, concern, for

payments we or not case-by-case necessarily a have would it's bullet I QX of look aren't in QX, basis. QX, companies natural QX just But I mostly amortization. -- payment bullet say, and it's few sorry, may may the think these as it's So or QX, a to that on

Casey Alexander

payments principal to sum lump monthly maturity. as opposed final Meaning a

Sajal Srivastava

I just maturity the a runway credit to circumstance generally depending and credit it and And when say, then and on company. speaking, on fact the would extensions, extending dates situation basis of comes it's rating cash

Casey Alexander

Great. Okay.

that payments were million at principal amount, this a look in there? scheduled I of when amortization, some bullet there's $XX like Now seems quarter's activity high with

Sajal Srivastava

a was take another had cash And on I $XX to right, know -- amortization. Again, the I the we million then quarter that revolvers. during million We million the look, million if component it $XX I $XX detail... had Chris. of saw. prepays, the portfolio don't of We you think we had, cash we $XX mean, repaid is of, of had

Christopher Mathieu

seems that scheduled Right. at large as amount. the And looking principal amortization. I'm million a specifically like $XX stated

So to as I'm trying understand -- to in maturities there was there if that bullet was... any

James Labe

There representing million. was $XX one

Operator

next McCann Our Securities. from JMP question comes with Brian

Unknown Analyst

to the underlying and the appreciate I might the nonaccruals recovery play commentary And XXXX expected further. just next into if that What's pushed of has across specifically for heading mean year. as industry the But doesn't what performance, for out portfolio credit relates leverage? and as trajectory then expectation the So even outlook out quality? it

Sajal Srivastava

we say be take we news ball, take amount we of crystal it that make And cash in Yes. I a it the to unfortunate want look significant have would Obviously, circumstances. here. through quarter-to-quarter, again, as don't credit beyond. XXXX score our and is in higher-rated good with I to runway companies joking fact to

would as second underway. continues list million, be top say credit and again, element the our is one I in of I'd So existing companies. we with talked a X market, financing cash second rounds say that's already rated second the new strong runway to despite say for -- more $XX one of here about, happening the are one depressed element. watch so I'd imminently our portfolio companies raising QX

think, want I do again, continue and funded interest it's X attracting interest. to have that and in again, remaining QX sectors portfolio believe And AI, with rated top think, I -- they We attract strategic this are we Aon I seeing year. earlier anything everything follow-on we're here our they're So equity capital that are doing QX. then for say and our example, acquired today. to get feel companies so don't

delever our on I we than, that's other can't if say comment to virtue yes, amortization, is more XXXX scheduled a I'd see balanced portfolio upside outlook. So the by prepayments. think of I goal company really from

our the of capital quarter. of QX venture we million company of levels for had prepaying portfolio cash about generated we of third one was entire the how highest challenging in $XX And talked Again, ecosystem. liquidity

a conditions expect that the be to for prolonged again, to cash quarters, So continues of the doom again, of all we kind challenging tough and not that during period want same would I really say say, generation. don't it's gloom But extent time. this environment to I should

Unknown Analyst

the ultimately will a broadly does longer all time? for portfolio term? higher impact And long into you're invest then environment over impact does for just this And rate how the a Helpful. about sectors just thinking then managing follow-up, you the at interest

Sajal Srivastava

I look there yields, perspective, on the return and I from the a will warrant". from that equity-like think do I we're certain question. when you investors individual second "My total the an factor a take loan or say, look we Interesting high on to XX% can right? think would gosh, charging cap particularly as debt return right, a on in level the approaching is our equity If component, right, say we loan, higher make that's returns,

company I'll just venture it don't And do makes -- taking provide say, debt, forget equity it, who about who of raise this instead it maybe we'll or so financing think then that sponsors instead. I and the companies you don't

companies them ones why whose And then investors as rounds has with equity raised That's been of more profiles, have means stronger yields are adversely these are recently the take mentioned, high hold think selected you with talking lending credit getting on don't to same to companies it that to rates the are financing. our generally give what we approach to you're Jim capital. companies because level, new that in really but want

have reset We seen the in valuations. their

that using an LTV as then calculation runway. lower of longer perspective, terms from cash So have burn cash in rates, stronger we feel and a

impact on So the on their cash interest think hand, think the do of that. of that's we I other on think But our I perspective expense flow.

obviously that burn impacts rates. so And

it's the to aren't again, be profitability, are there mindful companies but so get they to today. And to our focused But of of. necessarily portfolio yet something majority

Operator

turn would closing go This to to I any Mr. Jim over for Please question-and-answer back ahead. like session. remarks. conference concludes our the

James Labe

in like quarter. Have it day. a next found participating I'd today's you helpful. you. always, all call. and We to you again nice talking Thanks, hope And again. listening Bye-bye. for Thank thank to as forward look I Okay. everyone with

Operator

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

now disconnect. You all may

TriplePoint Venture Growth BDC (TPVG) 1 Nov 232023 Q3 Earnings call transcript