TriplePoint Venture Growth BDC Corp. (TPVG) Q4 2017 Earnings Report, Transcript and Summary

Good afternoon, and welcome to TriplePoint Venture Growth Fourth Quarter 2017 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Andrew Olson, Chief Financial Officer. Please go ahead.

Thank you, operator, and thank you everyone for joining us today. We are pleased to share with you the results for our fourth quarter and fiscal year 2017. Here with me are Jim Labe, Chief Executive Officer and Chairman of the Board; and Sajal Srivastava, President and Chief Investment Officer. Before I turn the call over to Jim, I would like to direct your attention to the customary Safe Harbor disclosure in our press release regarding forward-looking statements, and remind you that during this call, we may make certain statements that relate to future events or the Company's future performance or financial condition, which may be considered forward-looking statements under Federal Securities Law. We ask that you refer to the most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements. We do not undertake any obligations to update our forward-looking statements or projections unless required by law. To obtain copies of our latest SEC filings, please visit the Company's website at tpvg.com. And with that, I’ll turn it over to Jim.

Thanks Andrew, and good afternoon. We had another great quarter to finish off what was a record-setting year. I'm proud of several records that we achieved, as well as some momentum at quarter's end which has already resulted in a great start and a very strong 2018 underway. Specifically for the quarter, we had our second largest quarter for customer fundings. This was right behind the previous record quarter which was only 2 million higher. We funded $81 million of investments during the fourth quarter. This was bringing the year to a total of $240 million, almost 50% more than the previous year. With new debt financing commitments, we closed $65 million in the quarter bringing it to a total of $330 million for the entire year which was 15% above 2016. We signed $55 million of new term sheets last quarter. This brought it to $515 million for the entire year, again up significantly 60% more over the previous year, another yearly record. We also continue to diversify the portfolio adding 16 new companies across various technologies and sectors that was up 80% over 2016. Probably the most impressive to me is our weighted average portfolio yield for the year 16.4%. I am also pleased to highlight that last year once again it was another year that several of our portfolio companies became part of the higher profile exits that happened within the Venture Capital markets. This included the IPO of MongoDB and the acquisitions of Blue Bottle Coffee and SimpliVity among others. And this all followed nicely in the wake of the previous year's Jet.com, Nutanix, Dollar Shave Club other high profile exits we had the year before. To me this attest to the continued high quality of companies in the Venture Capital investors that we work with. And this doesn't even include Amazon's announcement this quarter that it has agreed to acquire our portfolio company Ring. Finally turning to the capital base, we refinanced our Baby Bonds during the year reducing the interest rate and the cost. We also raised $23 million of additional equity capital that was in a private placement from Goldman Sachs at a premium to the prior quarter's book value. We did that this past fall. And here in the first quarter we just recently announced renewing our revolving credit facility where we improved the overall rates and availability on that line. While these are all notable records and achievements, I have saved the very best accomplishments for last. We're proud that our net investment income or NII of $1.61 per share for the year was not only up 18% over 2016, but even more impressively was 12% above and in excess of the yearly dividend that we paid to shareholders. In fact to our knowledge, TPVG was the only publicly held dedicated venture lending firm to cover its dividend in 2017 from NII. I feel like I have to say that twice, that we covered our dividend with our NII. But I think there's a tendency out there for us to be in various comparison charts and we have a completely different business model, philosophy approach, target market and customer profile. And we really run across much less compete with these others and as you can see, we actually deliver on our goal of covering or exceeding the dividends that we pay out to shareholders with our income. I am going to leave it to Sajal and Andrew to go into some more detail about this record setting performance in 2017. What I really like to do now is focus on the year underway 2018 and the incredibly strong outlook that we have for our business and the momentum already underway so far. One of the drivers behind this business is the Venture Capital market. $32 billion of capital alone was raised by venture firms in 2017. This is the second highest year on record, more than $143 billion of total capital over the last four years alone, the highest four-year period ever. This all translates into long-term dry powder that the Venture Capital firms have for deploying into new and existing portfolio companies, all of which of course will be candidates for debt financing at large. At the same time 2017 also turned into an all-time record for Venture Capital equity investing $84 billion of Venture Capital was invested last year, $300 billion in the past four years across 37,000 deals. Simply said, the Venture Capital asset class continues to attract significant amounts of capital to invest and the Venture Capital funds themselves are actively deploying it into new and current investments. Venture Capital from our standpoint it's alive and well and kicking and this investment activity translates into current and near-term potential debt financing opportunities. There is no lack of deals nor reduce demand for debt financing that we're finding in this market. As you may recall as early as the first quarter of last year, we were talking about the growing demand we were seeing in the venture lending market from the quality companies looking for debt financing. This is only increased every single quarter for us since then. As we speak today, our originations pipeline stands at the largest it has ever been with the same level of high quality. We're also continuing to see strong and growing yields. We’re very optimistic on the outlook for 2018. This is simple explanation why we're seeing the strong demand in the large pipeline. Our venture lending model is unique and has withstood the test of time. We've been doing it long enough. We have a very specific and highly selective focus with narrowly defined parameters for the type and stage of Venture Capital back company that we’ll finance. We work only with a select group of leading Venture Capital investors with whom we have had long-standing and profitable relationships. These Venture Capital firms are often considered in performing the best of the asset class and as many investors who will appreciate out here in Silicon Valley and other technology centers the best deals go to the best VCs. We benefit from impressive and high-quality deal flow by having these deep and long-standing relationships. Our select Venture Capital investors in particular also account for a significant amount of the funds raised, as well as the investing activity during the last few years. This is another reason why demand for our debt financing is up. In addition to our focus on these select investors, our selective model is further differentiated. We only lend to a specific kind of company. These are what we call venture growth companies at the venture growth stage of development. The companies that are growing rapidly often times 15 to 20 million or more in revenues, and they all have meaningful enterprise value. They are generally not profitable yet and that's because they're investing so heavily in rapid growth. These companies have generally raised a number of financing rounds and significant amounts of Venture Capital. They are usually leaders in their position with their products or services in the market and in many case is a liquidity event such as an IPO, may only be a year or two less away. Just take a look at our portfolio. These are companies that we believe have crossed the chasm and generally offer a lower risk profile than companies in other stages of growth. To wrap up, we continue to see great growth opportunities here in 2018 in both the Venture Capital equity and the venture lending market. We plan to capitalize on these opportunities in a significant way in 2018, given the strength and reputation of our global platform, the quality of our venture growth stage companies in the pipeline and those reaching out to us. As always, we will continue to work with our select group of leading Venture Capital investors, firms that have sponsored some of the biggest tech and life science successes over the past few decades, and what's drive the high quality of our Venture Capital backed companies. With that, I'll turn the call over to Sajal.

Thank you, Jim and good afternoon everyone. During the fourth quarter we added 5 new companies to the portfolio bringing our total additions for the year to 60. New customers in the quarter included FabFitFun, an exciting and capital efficient women's lifestyle subscription service and Media Company backed by new enterprise associates and upfront ventures. Prodigy Finance, the financial technologies or Fintech as its known company which provides student loans to international students attending top-tier postgraduate programs. The company has raised over 340 million of equity capital and debt capital for Index Ventures, Balderton Capital and other. RetailNext, a company which enables retailers and manufacturers to collect, analyze and visualize data about in-store customer engagement and has raised more than 180 million for investors including August Capital, Qualcomm Ventures and others. Innovid, a video platform company that empowers advertisers to create, deliver and measure innovative video experiences on any device and media outlet and has raised more than 65 million from Sequoia Capital, Cisco, Deutsche Telekom and others. We also made an equity investment in GoEuro, a leading website for booking travel that compares and combines rail, air, buses and cars across Europe. GoEuro has raised more than 140 million from new enterprise associates Kleiner Perkins, Goldman Sachs, Atomico and Silver Lake Kraftwerk. During Q4 we funded more than $80 million of debt investments to seven companies, $1.3 million in equity investment to two companies and acquired warrants valued at $1 million in four companies. The new debt investments funding through the quarter had a weighted average portfolio yield of 14%. For the year, we funded $237 million to 21 companies and are particularly proud to have grown the investment portfolio in the second half of the year despite meaningful prepayment activity during the first half helping us reach the lower end of our target leverage ratio at the end of the quarter. Also during the quarter, HP prepaid a small 600,000 lease tranche for SimpliVity, and Blue Bottle Coffee prepaid its $10 million of loans two months early in conjunction with its sale to Nestlé. So these prepayments were generally mature investments at-or-close to the maturity dates and brought our portfolio yield up only to 13.6%, as compared to 13.5% without prepaids. During the year, we boosted our core portfolio yield from 12.5% as of the end of Q1 to 13.5% as of the end of Q4. Moving on to credit quality, as of December 31, the weighted average internal credit rating of the debt investment portfolio was 2.02 unchanged from Q3. As a reminder, under our rating system loans are rated from 1 to 5 with one being the strongest credit rating, and new loans are initially generally rated 2. Two portfolio companies were added to like to as part of new fundings. KnCMiner which was rated orange 4 and Blue Bottle which was rated clear one were both removed from the credit watch-list as part of previously discussed repayments and prepayments. Before I hand the call over to Andrew, I thought it would make sense to share some strategic goals and objectives we have for TPVG here in 2018. As Jim said, we believe that we are in a very exciting point in TPVG's evolution and that 2018 has the potential to be a breakout year in terms of growth. We're seeing an increase in direct yield flow from our Select VCs and strong demand for venture growth stage debt from their high quality company. As a result, we have a clear near-term path to grow TPVG from an exceptional but small-cap BDC to a larger, more skilled and more diversified BDC more in line with the size and scale of the TriplePoint platform as a whole. This is a direct product of our strategy and our diligent work since TPVG's IPO and more importantly very exciting as we look to the future for TVPG. More specifically, our expectation this year for quarterly investment fundings is in the $50 million to $100 million range on a gross basis up from our target in prior years of $30 million to $50 million per quarter. So on a full-year basis, we see the potential for between $200 million and $400 million of investment fundings. As a reminder, fundings typically occur in the last month of the quarter and don't contribute meaningfully from an income perspective until the next quarter. Considering we ended 2017 with $100 million of unfunded commitments have closed $85 million of new investments so far in Q1 and have $100 million of signed term sheets. We have almost $300 million of potential funded assets right there but the exciting thing is that we expect signed term sheets and closed deals to come in greater than last year which again points towards meaningful portfolio growth in 2018. We expect that the core yield profile of our portfolio will be stable and will continue to be leading the industry in the 13% to 14% range again without the benefit of prepay's. With regards to prepay's, while they are part of business we haven't had any still far in Q1. Although we expect Ring to prepay at $50 million loan when the acquisition closes, we don't expect as much activity in 2018 as we saw in 2017. The strong outlook for portfolio growth actually leads us to think about scale and capacity. Given our externally managed structure as part of the TriplePoint Capital global platform, our sponsorship of point capital is oz in market originating proprietary deal flow from our select Venture Capital investors for investment opportunities across all stages of the venture backed companies like demand that has built quite a large high quality portfolio. TPVG serves as our sponsor's primary vehicle for allocating venture growth stage transactions. However during periods when TPVG approaches the high-end of its target leverage ratio, our sponsor allocates new commitment to its other funding vehicles which enable us to continually originate venture growth stage deal flow and be a constant source of capital to those company's seeking debt. So we have the capacity of the platform across all of our vehicles to meet the high quality demand we're seeing here in 2018. Having said that, we think there's a real benefit for TPVG to benefit from our deal flow to cross over to a larger cap BDC. So we've been working on several initiatives to make that happen. The first was on the equity front. We see ourselves raising equity ideally both privately and publicly through just-in-time equity raises so that we can quickly put the capital to work. A private placement in Q4 raising $23 million from Goldman Sachs is a example of our success on this front. We recognize that our portfolio is currently concentrated in some very exciting but large positions. To be clear, we view these are some of the very best deals in the venture market and clearly others do considering Amazon's acquisition of Ring which is our largest funded investment as of Q1 at $50 million. Our remaining large positions Rent the Runway, FinancialForce, View and WorldRemit are all very robust companies that have each raised hundreds of millions of equity capital with an average LTV under 7% and an average transaction yield of 16%. More importantly they continue to raise additional capital. WorldRemit announced the round in Q4 and Rent the Runway just announced a round today and we believe these are all likely to be IPO candidates for attractive M&A targets in the next couple of years. We do however believe we'll diversify our portfolio in several ways, the simplest of course is by increasing total portfolio of size which we are very confident that will achieve this year. We also expect to diversify the portfolio through potential co-investment, joint venture and syndication partnerships among us, our sponsor TriplePoint Capital and our strategic partners. As an important first step, the SEC issued public notice in February of our exemptive relief application and the actual event of orders expected to be issued after the notice period expires on March 26, 2018. We're very proud of the hard work of our team and of our counsel in making this happen and we look forward to sharing updates as they occur. With that, let me say as we look to the future we are particularly excited what 2018 has in store. We will continue to be highly disciplined and grow our portfolio in a manner that's accretive to our stockholders and provide them with an attractive yield on their investment. I'll now turn the call over to Andrew to highlight some of the key financial metrics achieved during the quarter in fiscal year.

Thank you, Sajal. I'm pleased to report the fourth quarter and annual results. As discussed by Jim and Sajal, we had another strong quarter of investment funding to cap an outstanding year. We ended the quarter with long-term investments of $372 million up over $60 million or 20% from the prior quarter. At quarter end, we held 106 investments to 42 companies with the cost of $374 million. The company's debt portfolio ended in cost of $355 million and generated a weighted average portfolio yield of 13.6% including prepayments. Our core portfolio yield excluding the impact of prepayments and other activity was 13.5% or remains steady relative to the prior quarter. Given 65% of our debt investments carry floating rates, we feel we are very well-positioned in the event of rising interest rate environment. Our weighted average portfolio for the year ended December 31, 2017 was 16.4% inclusive of prepayments and 13.2% excluding the impact of prepaid and other activity. As Sajal mentioned, we anticipate our core yields to remain constant or maintain between 13% and 14% in 2018 as we continue to grow the portfolio. At year-end, our unfunded commitments totaled $100 million to 10 companies of which $18 million is depended upon the company's reaching milestones. Of the total commitment outstanding, $87 million will expire in 2018 and $13 million will expire in 2019 if not previously dropped. Turning to capital, we continue to be creative managers of our capital sources. We identify and execute opportunities which allow us to thoughtfully grow the capital base. This is evidenced by a private placement during the quarter and the expansion of our credit facility at post quarter end. At quarter end, we ended the quarter with $235 million of equity capital which includes the $23 million private placement which we were able to put to work in Q4. We manage our debt capital through a combination of long-term financing with our unsecured bonds and just in time financing through our credit facility and efficiently manage cash trend. We ended the quarter with outstanding borrowings of $140 million consisting of $75 million of long-term fixed rate notes at a cost of 5.75% maturing in 2020 and $67 million outstanding under our revolving credit facility which carries a rate at plus 300. Given the direct cost of our credit facility, any incremental borrowings will lower our overall cost of capital and will be highly accretive to shareholders. Furthermore, in January 2018 we amended and renewed our credit facility which included an increase in the total commitment by 10 million, extended the maturity to 2021 and reduced the undrawn rates and applicable margin to improve economics. From a liquidity standpoint, we ended the quarter with total cash of $10 million and $133 million of undrawn availability under our $200 million revolving credit facility. That put us in a leverage ratio of 0.6x within our target range of 0.6x to 0x. We have ample liquidity and regulatory leverage headroom to give us runway for the strong demand and opportunity we see in the market. Turning to the income statement, net investment income for the quarter was $0.30 per share compared to $0.27 per share in the third of 2017 and $0.30 per share in the fourth quarter of 2016. Net investment income for the year ended December 2017 was $26.3 million or $1.61 per share up approximately 14% to $23 million or $1.42 per share for the year ended December 2016. Total investment and other income for the quarter was $11.1 million compared to $10.4 million in the third quarter of 2017 and $10.6 million in the fourth quarter of 2016. Total investment and other income for the year ended December 2017 totaled $51.5 million or up approximately 18% from $43.6 million for the year ended December 2016. We recognized net realized gains from the sale of investments for the fourth quarter of $2.2 million or $0.13 per share consisting primarily of realized gains from the sale of a Nutanix, a publicly traded company. Net unrealized losses for the fourth quarter were $3.5 million consisting of the reversal of net unrealized appreciation and recognition of realized gains related to the sale of Nutanix and the amount of $1.8 million and debt unrealized depreciation of $1.7 million due to mark-to-market activity on the investment portfolio. As a result of the realized and unrealized gains and losses, our net increase and net assets for the quarter was $3.8 million or $0.22 per share compared to $3.7 million or $0.23 per share in the prior quarter. Net income for the year ended December 2017 was $19.2 million or $1.18 per share up from $11.1 million or $0.69 per share for the year ended December 2016. As a reminder, net income for 2017 includes $1.1 million of realized losses related to the reduction of our 2020 notes and the issuance of our 2022 notes. Adjusted net income for the year excluding the one-time non-cash charge was $20.3 million or $1.25 per share. On an annualized return basis, our net investment income generated a return on average equity of 12% and a return on average assets of 7.4% for the year ended December 31, 2017. During the fiscal year 2017, the company made distributions in the amount of $23.7 million or $1.44 per share from net investment income, up a $1.61 per share. As of the end of Q4, our NII exceeded our distributions by $0.16 per share. Furthermore, we estimate that un-distributable taxable income carry forward from 2017 into 2018 will be roughly $1 million or $0.06 per share further solidifying our stable dividend projection. As of today, our dividend yield is over 12% but even more impressive and net asset value our dividend yield is nearly 11%. With that, I'm pleased to announce for the fourth quarter of 2018 our Board of Directors declared a distribution of $0.36 per share payable on April 6 to stockholders of record on March 23. This marks the 16 consecutive quarter we have maintained our quarterly distribution rate. Now with that, I’ll turn the call back over to Jim.

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

[Operator Instructions] Our first question comes from Jonathan Bock with Wells Fargo. Please go ahead.

Fin O'Shea in for Jonathan this afternoon. Thanks for taking our question. Just to kind of start out with some of the more broad level themes tying together, growing the portfolio and exemptive relief, can you kind of walk us through how just having more mouths to feed whether they be more flexible funds or similar direct lending funds, how this will help one of TriplePoint’s challenges which has been maintaining strong leverage?

Fin, this is Sajal, I’ll go first in answering Jim please join in. So I think the beauty of again the overall the TriplePoint platform is our ability to meet the strong and kind of insatiable demand of our high-quality sponsors and their portfolio companies. And so as we look to the benefits from JVs and exemptive relief and co-investing in other things that are in the works, I think it addresses a couple of issues which is diversification and so we know we have some great but lumpy positions. And so we think the benefit of that is not only from diversifying but also it actually gets us access to more capital under our credit lines because of concentrations. And so I think from a total leverage perspective I think shareholders should be happy given the strong pipeline and unfunded commitments that we have a near-term path to continue to grow and this just lets us allocate the larger transactions which clearly TPVG may miss out in general to the extent that we didn’t have the ability to allocate or put into with our partners or JV investments or co-invest.

And then on to - I heard you say diversification a couple of times or expansion, does this mean we'll see some new verticals versus what we're used to seeing here maybe something life-sci, med-tech et cetera or something else?

Again our strategy has been the same; we work with the best VCs and support their portfolio companies across all industry. So no change in the strategy and no change in terms of our approach. I do think again we are portfolio represents where these top tier VCs are investing which again is primarily technology, some life sciences or healthcare technology. But no change in strategy for either an industry or from a product perspective from us sticking with our venture debt and the yield profile and the structures that we’ve done in the past.

And just couple of more small ones on portfolio names. Is the Ring equity announced deal price above or materially above your latest mark?

They haven’t announced the specific number publicly, so I don’t think we’ll go ahead and disclose it today.

Our next question comes from Casey Alexander with Compass Point Research. Please go ahead.

Is it your anticipation that Ring will close before first quarter ends?

Casey they have not publicly disclosed what the timing is. All they have announced is that Amazon's agreed to acquire them. So I don't think we have any more information that we can share from…

All right. In this quarter was the Ring loans a category one or category two investment?

I believe Andrew it was category 2.

Correct.

So but so arguably in light of an acquisition by Amazon those would almost automatically move up to category one.

Correct. I mean the announcement was later in the quarter relatively close to…

For Q1 as opposed to this year.

So as we look at the credit profile, obviously we would upgrade those.

But maybe to your point Casey unlike HP, we should assume that this fund when they close we'd pay out the loans versus HP which assumes the SimpliVity leases.

And those are leases so maybe there is difference there in terms of structures that might make a difference, but I doubt Amazon is going to let 10% loans hang around in the portfolio. How if I understand what you're saying about the coinvestment privileges that you're saying, I mean is the diversification in the portfolio - greater diversification going to come from changing the loan sizes that are allocated to the TPVG portfolio or simply just increasing the size of the portfolio and thereby having more names but similar loan sizes?

Well I think it's all the above Casey. I think we benefit from the ability to get bigger but then I think it's also the ability to optimize transaction hold size for TPVG. And so it gives us multiple levers on a deal-by-deal, case-by-case basis at the point in time depending on where TPVG is out from a scale and funding perspective, it's really both.

I mean I think it's a fair question to ask if you know you're comfortable with some of the investment concentration that you do have in the portfolio of Ring which is obviously going to be a pleasant result at the end of the day, still does represent yield almost $3 a share in NAV. So I would love to hear your thoughts about your comfort level with concentration sizes like that?

Yes, again I think as we shared with you some perspective on our goal is not to originate, we’re not necessarily whale hunting that's not our business. We’re looking for high quality deals and based on the inside and our relationship with our VC sponsors, we find great opportunities and we restructure high return high quality deals with them regardless of size. And so I think as we look to the larger positions as I said earlier during my section, these are some of the best deals out there some very high profile companies again mentioned some of the more recent announcements and as you look from an LTV, from a risk return, I mean again very thoughtfully structured. So I would say we continue to be particularly thoughtful in sizes, in the structures and in pricing for our transactions.

I mean if my math is right assuming that there is a prepayment with Ring it would currently drive around $0.11 a share of accelerated income, mid income, so that's obviously a real positive. Let me ask you different question, the 1.7 fair value adjustments that came in this quarter. Obviously the K came out while the call was going on so it's a little tough to run through this quickly but can you put a pin in sort of the source of the $1.7 million in fair value unrealized depreciation?

Yes, I mean this is Andrew here I can kind of speak to a little bit. Primarily it was kind of a little bit of a mixed bag, I mean there were couple individual positions on the debt portfolio that you’ll see there was a slight mark on and then a couple other one. In equity portfolio, there was nothing in terms of a specific portfolio company issue per se. It was more of - as we reach at the end of each quarter we run our valuations, we tweak assumptions that may drive kind of some incremental mark-to- market on the portfolio as a whole.

As we said there are no changes to credit quality during the quarter only again additions into the category two and then the two removals.

And also while I totally understand that it wasn't necessarily your expectation given your results this year that the stock would end up around $11.80 a share. In the past at this level the company has exercised some discretion in terms of repurchasing shares. Would you consider doing that again at these kind of levels?

I said again that’s question for the Advisor and our Board to take. We’re not obviously happy as where the stock is but we also look at the fact that in just in Q4 our friends at Goldman Sachs purchased our shares at a nice premium as well. And so I think we balance the ridiculousness of where the stock trades versus the pipeline and the opportunity in the assets that we have out there to deploy the capital. And so, we’re just keep our head down continuing to be the - managers of capital for our stockholders and so all things are considered.

And to wrap this up, what was the change in the undrawn rates on the credit facility?

The undrawn rate went from 75, so it’s a Q1 of that but it went from 75 basis points to 50 basis points.

That's great, terrific. And…

And as we lever up the margin on the spread actually goes down as we lever up. So an incentive to lever up.

[Operator Instructions] Our next question comes from Christopher Nolan with Landenburg Thalmann. Please go ahead.

On the K GoGreen is that the conversion of KnCMiner?

Yes, that’s correct. During the quarter we received distribution about $2.8 million from the Trustee and then the remaining positions that we held in KnCMiner was converted from debt-to-equity to mirror it's all participation rights and GoGreenLight.

And do you have any credits on nonaccrual currently, I didn’t see any in the K?

No, not currently.

And then in your comments you mentioned just-in-time equity raises, I mean would that be in ATM or overnight what's the thinking there?

Again we’re very open minded, again we use the GSAM transaction example of - we raise that in Q4 and put the capital to work in Q4 as well. And so we're just cognizant of large equity raises and the impact of the stock and so we just want to again be mindful and thoughtful of how we raise capital and deploy it?

And when you raise capital, I mean what is the thinking in terms of - is the consideration primarily preventing that dilution at the benefit of getting EPS accretion down the line. What’s number one priority so it’s not diluting that?

Well remember we don't have shareholder approval to rate below net asset value. So we can’t destroy anything in the process because we hadn't asked for it like some others. And so our approach has always been we use the capital to support the strong demand for debt financing - high-yield debt financing from these quality venture-backed companies. And so that's historically and always motivated us from the capital raise side. I think there's a benefit though from capital raising to overall improving scale and size and obviously trading volume too. We have some great institutions that hold us and although there are large shareholders percentagewise, we’re tiny percentages of their overall fund sizes - they benefit from scale so that they can add something better than rounding here on their funds, but when I say fundamentally, it’s to support the great demand for high quality assets in the market.

And the final question and just following up on Casey's question of repurchases. Given that your average yield is roughly 13%, 14% where the stock is, I mean how do you view buying back here on stock relative to making investments in the portfolio?

Yes, I mean again I think the Board takes all factors into consideration. I think obviously we have some great shareholders on the institutional level in our top 40 shareholders, who all have given us their opinion as well. And so I think we take a long-term approach to our perspective on the stock price and our ability to deploy the capital and our use of capital. I mean the good news is we have line of sight for portfolio growth and again with some of the developments already for the year that have been announced, great things from a dividend perspective and dividend coverage perspective.

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

We'll close again by expressing my appreciation to everyone for your continued interest to listening to our excitement for the current year and also your support in TriplePoint Venture Growth. Thanks and we'll speak with you all again soon.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.