SuRo Capital Corp. (SSSS) Q4 2012 Earnings Report, Transcript and Summary

Good afternoon ladies and gentlemen and thank you for standing by. Welcome to the GSV Capital Fourth Quarter and Fiscal Year 2012 Conference Call. During today's presentation all participants will be in a listen-only mode. Following the presentation, the conference will be open for questions and instructions will be given at that time. [Operator Instructions]. Today's conference is being recorded, Tuesday, March 12, 2013. At this time, I would like to turn the conference over to Tricia Ross with Financial Profiles. Please go ahead ma'am.

Thank you for joining us on today's call. I'm joined today by Michael Moe, GSV's Founder and CEO; Dave Crowder, Executive Vice President; and Steve Bard, the company's Chief Financial Officer. Today's call is being recorded and webcast on www.gsvcap.com. Replay information is included in our press release that was issued today. Please note that this call is the property of GSV Capital Corp. any unauthorized rebroadcast of this call in any form is strictly prohibited. I'd also like to call your attention to the customary disclosure in our press release today regarding forward-looking information. Statements made in today's conference call and webcast may constitute forward-looking statements, which relate to future events or our future performance or financial condition. These statements are not guarantees of our future performance, condition, or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements, as a result of a number of factors, including those described from time-to-time in the company's filings with the SEC. Management does not undertake to update such forward-looking statements unless required to do so by law. To obtain copies of GSV Capital's latest SEC filings, please visit the website at gsvcap.com. With that said, I'll turn the call over to Michael Moe. Michael?

Thanks Tricia. Good afternoon everybody. I am going to begin today with a review of our portfolio as of December 31, 2012. As most of you know, our investment philosophy is based on studying the intersection of megatrends across the growth sectors of the economy to identify game changing businesses with disruptive and innovative technologies and services. We primarily invest across five themes, Social Mobile, which is currently 25% of our portfolio; Cloud Computing and Big Data, which is 28%; Internet Commerce, 7%; Green Technology 9%; and Education Technology, which is 31% of the investments at year end. We now have 47 companies in our portfolio that represent transformative businesses which we believe have outsized growth potential. The fair value of the portfolio was $226.4 million at December 31, and we also have cash and short term investments of $27.3 million, that equates to an NAV at the end of December of $13.07. At December 31, our top 10 investment represented approximately 60% of net asset value, and the top four investments, Twitter, Palantir Technologies, Violin Memory and Dropbox represent approximately 34% of net asset value. Twitter is our largest investment by a wide margin at about 14% of deployed capital and a fair value of $36.1 million. I emphasize the point that our focus is identifying hyper growth businesses, because of our experience that over time, equity value is highly correlated to revenue and earnings growth. By looking for the right type of companies, our emphasis is our long term value creation and the potential for sizeable returns. Indicative of the types of investments we select, the majority of our top 10 companies achieved estimated revenue growth in 2012 of over 100%, and we estimate that our overall portfolio had revenue growth of approximately 80%. We believe the outlook for many of our top holdings is very strong, and exits look promising, both through IPOs as well as mergers and acquisition activity, and as the technology sector continues to experience massive consolidation, we are in a favorable position by only many of the industry's leaders. All this bodes well for long term value creation of our portfolio. During the fourth quarter, we made initial investments in a handful of new companies. Parchment is an Education Technology company that is run by former CEO of Blackboard, Matt Pittinsky. It's a software-as-a-service platform for conventional management. Effectively, what the opportunity here is to create a New York Stock Exchange for knowledge, which we think is very exciting. YourOffers operates a personalized marketing and payments platform for retailers. S3 Digital Corp is a sports analytics company, and Ozy Media is a social media space, with investors along with us, including Ron Conway, and Marion (inaudible). We also made follow-on investments and adding into core positions in Palantir Technologies, Control4, Grockit, SugarCRM and Whittle Schools. Whittle Schools is effectively a derivative of Avenues - The World School which is a top 10 investment of ours. Let me talk about a few of the companies from the standpoint of our initial investment to where they are today. We think these are examples of the support of our investment thesis and good examples of the value equation, and that we believe is incurring in the portfolio. Let's start with Twitter which is our largest position. When we first invested in Twitter back in May of 2011; Twitter had 200 million registered users, now it has over 500 million, with over 450 million tweets per day. This excellent growth potential here, increasing the share of global population, and gaining access to mobile devices, currently there is roughly 1 billion smartphones in the world, with 6 billion mobile phones, there is tremendous growth ahead, both as mobile phone population converts to smartphones and Twitter is the leader in real time search in this new medium. We also believe that the opportunity for [targeted advertisers] daily analytics should open up new revenue streams over the near term. Second position, Big Data company Violin Memory, represents 5.8% of our portfolio. At the time of our first investments in April 2012, Violin was already the storage solution of choice for names like Cisco, Dell, Fujitsu, HP, IBM, Oracle, SAP, Microsoft and VMware. In October 2012, Violin Memory partnered with Cisco and Oracle to achieve the most efficient 2-processor performance record in world history. Cloud-based storage leader Dropbox represents 5.7% of our investments. We initially invested in November of 2011, when Dropbox had 50 million registered users, and now has well over 100 million registered users, and users upload 1 billion files every 48 hours. Dropbox is a very powerful platform that is disrupting the file storage space with its superior best-in-class solution. We first invested in education tech company Kno in May of 2011, because it [has always] had the potential to be a major player in disrupting the $10 billion textbook industry to its digital offering, and also social integration. Kno digitized textbooks and created social learning communities and its additional revenue streams of tutoring assessment and content, Kno has since announced partnerships from McGraw-Hill, Houghton Mifflin, who are the two leading educational textbook creators. A couple other education investments that we have made that are in our top 10, 2U, formerly known as 2tor, is experiencing rapid growth, the reoccurring revenue business model, where it partners with leading universities like USC, North Carolina, Georgetown, to create online accredited courses, additionally it has just announced Semester Online, which we think could be totally disruptive, creating a consortium of leading undergraduate schools, that will let student take classes from any one of them, and get credit where -- if they are taking a semester abroad, or if they just want to supplement classes that they are taking at their current university. Another education business that we are very-very excited about is Avenues - The World School, which is creating a global network of elite K-12 schools. It first opened up in New York City this fall, to enormous success of having the most famous kindergartener in the world in their school, Suri Cruise, Tom Cruise's daughter. But they are now opening campuses in Beijing, Sao Paolo, London, and again we think the market demand for this is tremendous. The former President of Yale University, former Head of Phillips Exeter and Hotchkiss, all in the management team here. These are just a few examples of our top-10 positions and what's going on in the portfolio. We have other great names that are making headlines with their achievements. Companies like Spotify, (inaudible) fight music piracy as the key reason of music sales in 2012, grew for the first time in this century. Today, Spotify has 24 million monthly active users, 6 million subscribers. So a 25% of their users are subscribers, which is an enormous number and shows the power of that model. We are very excited about Spotify investment. Additionally just to make note of a company we invested in, called Dataminer based in New York City. We were introduced to the company by Twitter, who was very impressed by how they are using the Twitter firehose to use real time analytics that helps traders, helps government officials and so forth, it's a very exciting business. The third company I will make a mention of them, we are very excited about this, with the confirmation of both our thesis of the private marketplace and our role in it. SharesPost announced last week a joint venture with NASDAQ, creating the NASDAQ private marketplace, which we think is strong evidence of the secular trend that we are seeing with private companies staying private longer, and we think increased activity from traditional public investors in the space, which we think bodes well for a number of our portfolio of companies, and the development of this market, where GSV is a leader. So again, we are very excited about that. Going through just some of the numbers; net assets totaled $252.6 million or $13.07 per share of net asset value as of December 31, 2012. This is down approximately 2.8% from the previous period. Of this decrease, approximately $0.22 or 60% of the decrease was due to the write down of our investment in Top Hat. So looking ahead, our portfolio is well positioned and comprised of all very high very conviction names that we think could be, what we refer to as the stars of tomorrow in the growth economy. Right now valuations from many leading growth companies are compelling on an absolute relative basis, as compared to [bonds] for sure. We believe this is a good environment for long term potential for great growth companies, and we are confident about the next few quarters, and the companies in our portfolios continue to create value by innovating and advancing in the business strategies. Moreover, looking at the IPO market, which is clearly something that is healthy IPO market, is very beneficial for us. Well, IPO activity has been kind of consistent with what we have seen over the past decade, 16 IPOs so far this year, which encouraging is of these IPOs 50% price within the range, 38% above the range, and the first day of [pop] is 16%. These are much better numbers than what we have seen for some time, and we think that will be encouraging to many of the great companies that we have invested in, and looking at the IPO market, and wondering if it's safe to put the toe in the water, we think that is very healthy and good data to provide that type of incentive. Also, corporations with $2 trillion in cash in a very low interest rate environment, increasingly you are seeing them get active on the M&A front. Again we own leading names, and we think that's going to be a good catalyst for our portfolio. So thanks for your attention. I will ask Steve to make some final comments on our financials, and then open up the call for questions. Steve?

Thanks Michael. As of December 31, the total value of our portfolio of investments was $225.4 million. Net assets as of 12/31 were $252.6 million, which included cash and money market securities of $27.3 million, and as Michael said, that translates to an NAV per share of $13.70, which compares to net assets of $259.9 million or $13.45 per share as of September 30. During the fourth quarter, we invested $9.8 million in four new portfolio companies, Parchment, S3, Ozy and YourOffers, that is exclusive of transaction costs. We have also made follow-on investments totaling approximately $2.7 million in existing portfolio companies. Since inception, we have invested approximately $236.5 million in 47 different companies. Again, this excludes transaction costs, represents about 85% of the net proceeds from our IPO on our subsequent follow-ons. Net investment loss for the fourth quarter was $2.8 million or $0.14 per share, compares to a net investment loss of $2.3 million or $0.12 per share for the third quarter of 2012. The net change in unrealized depreciation, which is comprised of transaction costs, finder's fees, legal expenses, escrow fees, and most importantly, any fair value adjustments, markups and markdowns was approximately $4.5 million or $0.23 per share for the quarter; and that compares to $4.7 million or $0.24 per share of unrealized depreciation for the third quarter. The result was a net decrease in net assets resulting from operations of $7.3 million or $0.38 per share, again, compared to the net decrease in net assets from operations of about $7 million or of $0.36 per share for the third quarter For the year, for the 12 months ended December 31, net investment loss was $8.3 million or $0.51 per share, and that resulted primarily from operating expenses incurred during the year. This compares to net investment loss of $2 million or $0.60 per share for the period from inception, which was January 6, 2011 through December 31, 2011. For the year ended December 31, 2012, we had a net change in unrealized depreciation of $10.2 million, or $0.63 per share, and this change in unrealized depreciation is primarily the result of our investments in Facebook, Gilt Group, Silver Spring Networks, Top Hat and Zynga. We had a net realized loss of $1.4 million or $0.09 per share, resulting primarily from the investment in the PJB fund, which was a derivative investment in Zynga. The net change in unrealized depreciation was $1.6 million or $0.47 per share for 2011. The net decrease in net assets resulting from operations was $19.8 million or $1.23 per share for 2012, compared to a net decrease in net assets resulting from operations of $3.6 million or $1.07 for 2011. With that, I will turn the call back over to the operator to start the Q&A session. Operator?

Actually Steve, I have got a couple of closing comments. As in one, just wanted to make investors, our shareholders aware, in our effort to continue to enhance our governance and the way that we run GSV Capital, we have brought on Cathy Friedman as a new board member. Cathy has a very distinguished career as an investment banker for Morgan Stanley for 25 plus years, which she retired from several years back. Sits on a number of boards in Silicon Valley, and we are delighted to have her on the board, providing us a great counsel. This is in addition to Bill Campbell who we brought in the last quarter, who again is somebody who is extraordinarily well respected in businesses in Silicon Valley, and again, we are doing this all with the eye on how we continue to get better in what we do and do best for our shareholders. Lastly, I'd like to thank all of you for participating on our call and your interest in GSV Capital. I want to also let you know, we are going to be getting more visible in the conference circuit, because we think it's important to tell the story and what's going on in the hood of GSV Capital. So tomorrow, I will be at the Piper Jaffray conference presenting next week. I will be at the Roth Capital conference in Dana Point, and we hope to see some of you there, and please feel free to reach out if anybody has any questions, as we will be delighted to answer any of those, in addition to what we receive on the call this evening. So with that, I would like to turn over to the operator to look for questions. Thank you.

Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]. Our first question is from the line of Ed Woo with Ascendiant Capital. Please go ahead.

I had a question. In terms of cash balance that you guys have, what comfortable cash level do you see yourself of reaching in deeply that you have enough to continue making in that sense for the near term?

Sure. We have relatively detailed analysis, not only looking at the cash that we have on hand, which as we said, was $27.3 million, but also we have, positions like Facebook which we could liquidate when we feel it's appropriate, and we also have calculations on the whole portfolio of what we know, and what we anticipate in terms of liquidity. So as we look out both in the short term and the intermediate term, we see cash and we see appropriate cash to allow us to continue to do what we have been doing, which is primarily the cash that we are using is to build on core positions, like we did in the fourth quarter with Palantir and Control4 and Grockit should receive and effectively, our philosophy is feeding our winners, right, and that we believe we could continue to do, and we are comfortable with where we are at.

Great. I have a follow-up question. Do you feel that you are reaching close to the capacity with the number of companies you want to be invested in at 47?

Yeah, that's a good question. I think the 47 number is a little bit misleading, and that if you look as we said, at the top 10 positions, it's -- we are 60% of the portfolio. If you look at the top 20, you get to 80% plus. What you will see us do, and again this is something we are evolving from is that, what we thought the best strategy for us was to have about 90% of the portfolio and what I'd call emerging growth names, above $100 million market cap in the good old days, these companies, most of them went public already. What we have seen, and we have made small opportunistic investments, and in companies like SharesPost, which again we think is -- we are excited about Dataminer. I mean, I talked about some of these on the call. But what we found is that, while we think that there is tremendous opportunity and that gives us a window and an opportunity to add to, that from a portfolio management standpoint, we are spending more time with little investments than we think is in the interest of our shareholders. So I think what you will see us likely do, is not broad and the number of investments we have beyond what we have today, from a practical standpoint, and really focus on adding to core positions, when we can get shares at prices that we think represent great value for our shareholders.

Great. Well thank you and good luck.

Thanks Ed.

Your next question is from the line of Jon Hickman, Ladenburg Thalmann. Please go ahead.

Hi. Michael, can you -- I mean, to the best of your ability without compromising non-public material information, could you talk about potential exits, kind of what you are seeing or looking at?

Yeah.

I know Violin Memory has rumored to be ready for an IPO shortly. Silver Springs is rumored to go public this week. Still, anything else you can add to that?

Yeah. And you are right, I'd rather be careful, because, I mean, when I actually have specific knowledge and it hasn't been disclosed, then that would obviously be beyond inappropriate for me to discuss that. So I'd rather be careful in my comments. But what I can tell you, just talk from a general standpoint, what's encouraging from a GSV capital standpoint and shareholders, we see with the attitude of many of our companies was, gosh, there is no rush to be public. I think when you see kind of the action in NASDAQ and you see some of the action in IPOs and you see candidly, some of the mistakes that have been made them wait too long to go public, such as Facebook has been exhibit A. You are seeing these companies look at moving up, when they might have originally been scheduled or thinking about going public, and we think that comment I just made is relevant for many of our core positions. So I think that's a good -- I mean, I think that's a good trend that we are seeing. In terms of companies out there, what I will say without naming names, I think there are -- probably I think they are, there are companies that are beyond thinking about going public, they are in the process of going through that exercise. One of the things about the JOBS Act, which I think is actually very-very positive, and we are seeing this in ways that I didn't anticipate, is this quiet filing allows companies to kind of get their (inaudible) without telling the world that they are going public, and sort of build [a value] with the market, make sure they are ready to go as a company, without sharing all these details to the world, as would happen in the old days in terms of the IPO process. So yeah, we do know factually, a number of our companies, a number, I don't want to overstate that, but we have enough -- we have more of that. There is this several -- lot of our companies for sure that are going through that process right now, and again I think we are optimistic about what the outlook is for these companies, what the fundamentals are, where we own many of these in terms of price, and what we think the fair market value is going to be when they go public. The other piece, which again is something that I think you are going to see more of is the strategic activity. Again, I think what happened with SharesPost and NASDAQ we think is really exciting. But I think, what you are seeing from businesses is they are getting a bit more confidence. They have had a bunch of cash on their balance sheet for a long time, but they are just finally starting to feel like, we are coming out the other end and you are starting to see businesses get more aggressive in their activity.

Do you have any timeframes for it? Like what you do --

I think what I can tell you for -- because we do this when we create -- we create our best estimate of what we see. I could tell you, versus what we would have talked about three months ago, I think we are going to see more activity in 2013 than we thought three months ago. Maybe, and not by a small amount, we think there is a lot of things that could happen that makes 2013 a big year. But certainly, 2013-2014 there is going to be a lot of activity with our portfolio and again, the fundamentals generally speaking are really good and so we think that's all good news for shareholders in the intermediate to long term.

Okay. Then Silver Springs? This valuation that you are carrying right now is that based on their -- the price talk in their IPO?

So we -- when you look at Silver Springs, we made adjustments down. Silver Spring is, we made that adjustment down in the third quarter, we made adjustments down in the fourth quarter, that's reflective of what has been going on with the pricing activity. Both that we saw the secondary market, but now as we are seeing likely as a public market. So, that's what's going on with that.

Okay. That's it for me. Thanks.

Thanks Jon.

Thank you. Our next question is from the line of Robert Burke with Burke Investments. Please go ahead.

Hi. First, I'd like to compliment you on your excellent website. It details the holdings and reason for investing very clearly, and it's really great. Two things with Silver Spring that the other gentleman just mentioned, it's coming out around 16 or 18 tomorrow, a new value that's $3.88 a share, how much do you think that will increase your net asset value, and the second thing, since January 1, have you purchased any additional shares in Twitter or Dropbox?

Thank you for your question. Thank you for your compliment on the website. We do believe that it's critical for us to provide as much information as we are allowed to, and think the web is obviously a great way to do it. We are going to continuously look for ways to improve that, so I appreciate the compliment, but we also would love feedback with things that would make it better. As it relates to the Silver Spring, candidly, I think it's premature for us. I don't think it's appropriate for me to make additional comments on that, because we don't know; we got to see where [all to] actually prices were traded and so forth. We made adjustments as I said in the third and fourth quarter reflecting that. Candidly, we tried to -- I guess that's enough said. So that's I think all I can comment there. As ways to Twitter and Dropbox, I think you asked if we bought after we disclosed -- after the numbers and so forth. The answer is, and generally speaking, we don't comment about purchases during the quarter, unless they are completed and material. I can tell you, we haven't made any material purchases of anything that's not reflected in this call.

Thank you.

Thank you.

Thank you. Our next question comes from the line of Mike Knox with Gold Ridge Asset Management. Please go ahead.

Hi Michael. Thanks a lot for the presentation. My question really revolves around why you guys haven't done any purchases of shares either personally or by the fund, given that you have kind of expressed that you have got a lot of conviction in your names, you are buying into existing holdings, you don't want to broaden your investment base. I mean, there is closed-end funds that trade at discounts forever, because the management doesn't care about NAV, and then there's closed-end funds that do things like tender for shares, and do shareholder friendly actions that tend to trade around that AV. And you guys seem to be heading in the wrong direction here and it's a huge opportunity for you to be able to do things that are accretive to NAV and I'd like to understand why you are not doing that?

First of all, thank you for your question and your input. To be very clear, we care passionately about our NAV and about value creation and the like. I can also tell you that, contrary -- you know, we have bought management, broadly speaking and including myself, have bought shares of GSV Capital in the periods where we were allowed, and we intend, I will speak for myself, I intend to continue to buy shares of GSV Capital, and that's something that -- eating your own cooking that is an important concept. I would say, and we do evaluate buying back shares, we do -- there is this discussion that we are focused on and we have had conversations both on these calls, but as importantly, internally on the board, and we just feel that the greatest opportunity in the intermediate to long term dictates value for our shareholders and what we think people are investing in us to do, is to buy shares with these elite names, if we feel like we can buy them at the right price. I will tell you, Michael, you sound like you have a lot of expertise in this space, maybe not on the call today, just because this probably -- I think gives a more detailed conversation than we are going to be allowed on this call, this afternoon. But if you wouldn't mind calling me or setting up a time where we could have a more detailed conversation, I'd love to get both your ideas and your insight, because clearly you have a lot of experience in this area.

Yeah, I appreciate that. I mean, obviously I think what you guys are doing is great, and it provides a great opportunity for people in participate, you know, since you are in a venture capital market. But at some point, there has to be some confidence that discount won't be there perpetually to have some confidence in the -- that the fund or the shares will perform somewhat in line with the value that you guys create, because that's the value that we get out of it. So I will try to arrange a call with you then.

I'd appreciate that. Please do and with your comment, I couldn't agree more. By the way, I am as confident as I have ever been in our strategy in what we are doing, and in what we own. Though, ultimately, that confidence has to translate into share pricing, we are focused on that, and I'd love to get your inputs. Well thank you.

Okay. Appreciate it.

Thank you. Our next question is from the line of Richard Schoenfeld with Schoenfeld Consulting. Please go ahead.

Michael, I just wanted to ask you some specific detail about the lockup dates for Groupon, Zynga, Facebook, when are the lockup dates ending for those three?

All three of the lockup dates are gone, and so -- yeah, those lockup dates on Zynga, Groupon and --

So you are not restricted if you were just -- assuming that you wanted to sell any of them, no?

No, we are not restricted.

Right. Have you given any thought or consideration to divesting the portfolio of Groupon, Zynga or Facebook?

We actively consider all. I could tell you what's listed on the sheets in the call today, and what's disclosed in our press release and it will be in the 10-Q, as of December 31, 2012, we are constantly evaluating the positions that we have, and what's the appropriate thing for shareholders. So we haven't disclosed anything after 12/31/2012 on any other portfolio, but it's safe to say that we know that we are not seeing -- the reason why people are investing in GSV Capital is not for us to have a broad collection of public companies. People can do that on their own, and so we do look at those positions as trying to exit when we think is in the best fiduciary interest, we are likely the fiduciary for our shareholders, and we have -- obviously we are faced with those -- Zynga and Groupon, there was the lockup spend out for a while, and so we -- again, we have been monitoring and look forward to do the best thing. So you can expect that with any of our public positions, there won't be long term holds, and that's probably the right commentary for right now.

I understand; and with regards to Silver Spring, the IPO. The Wall Street Journal Deal Journal today at 3:24 headlines, 'Silver Spring IPO expected to break 2013 Tech Funk.' I just wanted a clarification on what you answered the gentleman earlier, you are showing 510,000 shares of Silver Spring, fair value was -- I have got the 10-Q, not sure which 10-Q I have, but as of December what were you valuing the per share of Silver Spring?

Michael, this is David Crowder, I can answer that. $3.88 per share, but that was pre a 5 for 1 reverse split that the company announced with conjunction, with as amended as one filing. So our effective price that we are holding so Silver Spring as today is $19.40 as one of the gentleman pointed out earlier, the range is $16 to $18 on the IPO prospectus.

Thank you. Our next question is from the line of Mike Mundo with Mundo FS. Please go ahead.

Hello gentlemen. Just want to compliment you, I think you have a great portfolio going on so far. We look forward to a better 2013. Can you hear me?

Yeah I can. We appreciate that. Thank you very much.

No problem. I just really have a simple question on regards to -- you mentioned by getting out, there is lot of -- lot of comments were made on this call. Getting out there, getting into the circuit, what I find a big funk with is the lack of news coming out of the IR side. I mean, the recent deal with SharesPost, I think that is a major reason why investors should look into this fund for getting involved with companies for a possible private takeover, aka Twitter. Any reason why there is such lack of news with your current holdings? You guys are invested in them. There has been great achievements, especially with Silver Spring, with Violin Networks, great partnerships, they are growing, and again, the recent SharesPost deal with the NASDAQ, I think they are substantial. But we are planning this out through Twitter, which is one of the companies we like in stocks, but --?

You know, actually you are dead on, and so I will take responsibility for this. We have hired a new IR firm and they are the ones that open the call. We have basically brought them on two months ago. So I think, the name of the firm is Financial Profiles, and we interviewed a number of firms before we hired them. So I think, there is a lot of good news going on with the portfolio companies, and we need to be better at being [indicating] that, so people know what's going on and give them -- understand really the perfect things that are going on in the portfolio that we have created. Candidly, we felt with the noise of the Facebook IPO in it being -- and that going the way that anybody expected. We wanted to kind of have the foundation -- we didn't think kind of screaming into the wind was kind of the right thing to do, but we do think with our shares selling at a substantial discount to NAV, with the fundamentals of the portfolio being excellent, we think it's appropriate, in fact we think it's important for us to be in front of people telling the story, having understand what's underneath the hood, then understand the valuation discrepancy kind of [things]. So one of the things that you will see, I won't say you hope to see, what you will see is an accelerated amount of information that we are providing. Again, we will provide some of this in the website, and we won't overburden people with press releases and the like, but we do know that we have to do a much better job of providing the information to shareholders, so they can understand that this is really good stuff that we own and there are really good things going on. So thank you for your comments, I couldn't agree more.

And one follow-up, they have been on for two months, and I am excited to see them aboard, and I am not looking because (inaudible), I will take a whisper at this point and the Facebook situation, yes, that was nothing to do with your investment, you guys were great about holding back and not adding into the hype. So I just want to get the news out there, there is a lot of value, stocks turning at 35% discount, and I think you guys have the responsibility just to get that news out there. Not to tie yourself on the back, but it should be out there, and it should be on the GSV news to bring awareness to the shareholders. That's all. Thank you.

You are completely right, it is our responsibility, and we haven't done as good a job with that, as we need to do and my commitment to you and our shareholders is you are going to see a much better job of that going forward. And I think this focus -- we have been focused on accessing great [comp], getting the size, getting the deal, doing the network, all the things that we think are going to create long term value for our shareholders. But it's not fair to our shareholders, that we saw a 35% discount, and a fair amount of that is because people just don't really know what we have done, and we need to make sure that's changing. So I think we are excited about -- I am excited being at the Piper Jaffray Conference tomorrow, I am excited to be at Roth next week, I am excited I think because we look at the next couple of months, we are on the schedule for other events like that, and that we think will be helpful in addition to getting our IRR engine revved up. So thank you.

Michael and Mike, this is Steve Bard. I would just add to what Michael said, in addition to being the Chief Financial Officer, I also wear the Chief Compliance Officer hat and the reality is, in defense of our IR firm, the devil is in the details. There are a lot of things as we all know, which float around in the media, which are sometimes speculative in nature, factually incorrect and we need to be absolutely 100% sure that anything we are communicating is absolutely accurate. Then furthermore, a number of our portfolio companies, the issuers actually preclude or prohibit us from issuing any sort of press, where they are mentioned without their blessing. Sometimes they just outright prohibit us from issuing the press about them. So I just wanted -- I wanted to put that on the table as well, but Mike Mundo, we really appreciate your support, your comments, your insights and onward (inaudible).

Thank you. And our final question comes from the line of Woody Welch with Cravens and Company. Please go ahead.

Michael, would the continual decline in the asset manage -- or the net asset value, have you considered cutting the management fees? Those seem to be a significant portion of the decline, maybe cutting them until you can turn that part around?

Thanks for the question Woody. We haven't had discussion around cutting the management fees. Candidly, we have to look at every aspect of the business and considering what's the appropriate way to manage it, but I will tell you that what we are doing and some of what we have done, which again, and we think will accrue to our shareholders in a material way. There is over the past two years, since we have been out there, we have materially added to our investment professional team, and to the other support services that we think are going to create the kind of value that people have invested in us to do. So certainly, we want to do what is in the best interest of our shareholders. We will do what's in our best interest of our shareholders, but to create value, we need a team. We will keep -- we are bringing in phenomenal people, Dave Crowder on this line is an example of that, who has tremendous experience, but if you look at the team and our website. And we certainly have a team that is -- that we are resourced well in excess of a small fund that we currently manage, because what we expect is -- we don't expect the value here to grow, and we have the right team to execute. I appreciate the comment, I appreciate the question, we will do everything we think is right for our shareholders. So appreciate that Woody. Thank you.

Thank you. We do have one more question from the line of Mark Tannen with Beacon Investment Solutions. Please go ahead.

Good afternoon gentlemen. I guess I have several questions, but I think some of the participants or some of the people spoke already discussed a few matters related to the IR, related to more of the company, trying to provide more value to the shareholders. Not exactly in, with regards to all your portfolios, but I think the concept out there is, we have a list of companies, there is 47 per se per the paper work that I'm reviewing here, and I look and say what's the value? Are these companies being bought a higher price, if the valuation per se is a correct valuation? Then from that standpoint, does the company really have some sort of an exit strategy where if I'm a shareholder and I am buying this stock, where do I see that potential where the company is going to make money, or at least, if there is something that they are showing that really says they want to, like a gentleman did make a comment, have you guys went back and bought back in? Have you made an attempt to show as a management team? We trust what we are speaking, and we want to buy it back. You know, I start looking at the fees, and I understand with the closed-end fund. There is a lot of management fees. So, I guess I am really not 100% have everything grasped in my hands to say where is that value? It's difficult because as an advisor or somebody who looks to suggest or review things or clients, when I look at what the portfolio has put together and there are some good names, but what is that short term, what is that long term approach, what is that exit strategy and where is that valuation all going to come into play?

Yeah, and I am sorry, can I get your name one more time, I think I worked on the wrong name when you asked the question, Mark --?

Tannen.

Okay Mark. Couple, three things, okay, and there is -- you have covered some different pieces, I hope I answer your question well. But, if you start with the reality. The reality, as Bill Parcells says, is you are what your record says you are. And so we have objectively looked at the companies that we have invested in and sort of what's going on with them. Now there is a reality, and there are some things that we have learned and as it relates to this fund, this is a unique fund that nobody has really done what we are doing here, and some of the lessons that we have learned, include, we are unlikely to invest in a company that we think is going to be public in a matter of months, unless we think it sets a substantial discount that we really understand, that we think it warrants us, because we think a lot of the value creation here is from the underlying growth, and so we want to have the growth be that value creation driver, not trying to perfectly time the IPO. Secondly, when you look at the 47 positions, and I made this comment earlier, you can get lost in some of the noise because 47 companies go on at 80% plus, there is a lot of activity. Yet, if you really look at the fund, what's going to really drive value is not how all 47 of those do, it's really how do our top 10 do and how do our top 20 do, because that's where candidly Twitter at $36 million, and as much as we are excited about Spotify when I referenced to Spotify, our investment in Twitter is 10X what it is in Spotify. So Twitter doubles, that's $36 million of -- or more than $36 million again, because we have already had gains that we were forced to markup. Palantir, Violin Memory, Dropbox, Chegg; Chegg is a company we haven't even talked about. We love Chegg, their business is doing tremendously well. Avenues, as we mentioned on the call, Solexel, 2U, Kno; Control4, we haven't talked about. That's another name, that is just a great growth name, and so, we know where we are on them, and we go through and then we have a very exhaustive process that we have an outside valuation firm. We have our auditors looking at this, and frankly the negative stuff is a lot quicker to be reflected than positive stuff, and that's appropriate, right. But when we look at our top 20 names which are going to drive a disproportionate amount of value, and specifically our top 10 names, we are very excited, and again, just to make sure that you have this, both myself and broadly, management has bought stock recently. And I intend to continue to buy stock. So I just don't want that to be -- that impression to be left, because that's not correct and so anyway. I think that pretty addressed what you said. I think with that, what I'd like to again say is for people tuning in, we appreciate everybody's interest in GSV Capital. We are looking forward to creating great returns for our investors in 2013. We ultimately believe that fundamentals drive stock price, and we think the fundamentals of our investments are compelling, and we are going to work extraordinarily hard to provide you with the type of returns you have trusted us with in terms of investing your money. So thank you, we look forward to again -- you will hear from us between now and our next quarterly call, but we hope to have a bunch of other things to talk about at our next quarterly call. Thank you very much, have a great rest of your day.

Thank you.

Ladies and gentlemen, if you'd like to listen to a replay of today's conference, please dial 1800-406-7325 or 303-5903-030 using the access code of 4603561 followed by the '#' key. This does conclude the GSV Capital fourth quarter and fiscal year 2012 conference call. Thank you very much for your participation, you may now disconnect.