Good afternoon. And welcome to the TriplePoint Venture Growth Second Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Andrew Olson, Chief Financial Officer of TriplePoint Venture Growth. Please go ahead.

Thank you, operator, and thank you everyone for joining us today. We are pleased to share with you our results for the second quarter 2018. 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 disclosures 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 our most recent filing 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 obligation 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 now with that, I'll turn it over to Jim.

Thanks, Andrew and good afternoon. We're excited to talk to you on the results for the quarter, as we continue to lead the Venture Growth stage's lending market and partner with some of the most successful venture capital investors and lend to some of the most exciting venture capital backed companies globally. We had a fantastic second quarter. We hit our all-time record for total investment income $16.6 million. We matched our record for all-time quarterly net investment income or NII $8.8 million. We achieved our second highest portfolio yield ever of 17.2%. We signed $212 million of new term sheets of Venture Growth stage companies during the quarter, a 45% increase over the previous quarter which in itself was a substantial increase over the quarter before that. We closed $140 million worth of new deals with eight Venture Growth stage companies. We redeployed the proceeds from our largest single [indiscernible] range after the closing of their sale to Amazon which helped us further diversify our portfolio. We also got back into our target leverage ratio range during the quarter and finally we received approval from our shareholders to lower our asset coverage ratio to 150%. We continue to achieve and in many cases exceed the goals and objectives that we set out for 2018 and we're just as excited going here into the second half for the year and are focused on delivering a super strong finish for the year. This progress is not the result of changes to venture capital market. It's all been related to our focus, reputation and approach which has always differentiated us in the market particularly among the venture lending BDC's. We continue to market based on the three R's, Reputation, Relationships and References. We continue to target a very specific universe of venture…

Thank you Jim and good afternoon, everyone. In Q2 we signed approximately $212 million of term sheets and closed $140 million of debt commitments with eight companies and added five new company to the portfolio. On a year-to-date basis, we had signed $358 million of term sheets and closed $255 million of debt and equity investments. The first new company added to the portfolio this quarter was ROLI which is reinventing the experience of music creation, with an integrated hardware, software platform for the digital age. ROLI makes uniquely touched response of interfaces, keyboard and other mute modular music creation instruments and tools to compose and play music, that can be consumed and engaged using smartphones and other devices. Musician Pharrell Williams recently joined as Chief Creative Officer as well. The company has raised over $40 million of equity capital from Baltan [ph] Capital Founder Group, FirstMark Capital, Index Ventures, Founders Fund and recently announced a strategic investment from Sony. The second OneSource Virtual which is a pioneer of the Business Process as a Service sector and supports the automated delivery of solutions exclusively for Workday. One of the leading providers of financial management in [indiscernible] capital management software. OneSource Virtual services and power organizations in all sizes through Workday deployment, consulting, training and in application payroll, administration, benefit administration and application management services. OneSource Virtual has raised over $165 million of equity capital from TCV and others. The third was Grove Collaborative which is a branded direct-to-consumer eCommerce platform for natural home and personal care products with a flexible reoccurring shipment model. Every product Grove offers both from their flagship growth collaborative brand and from exceptional third party brands has been thoroughly vetted for health, sustainability and efficacy. Grove has raised over $60 million of equity capital from Norwest…

Thank you Sajal. I'm pleased to report another exceptional quarter performance. Some of the highlights included record investment income, net investment income of excess of our dividend, stable credit performance, positive portfolio exit activity driving net realized gains and NAV appreciation. Total investment and other income was up 31% to $16.6 million or $0.93 per share for the second quarter of 2018 compared to $12.6 million or $0.71 per share for the first quarter. Our investment portfolio generated a weighted average yield of 17.2% including prepayments and other activity. The increase in total investment income and yield relative to the prior quarter was primarily due to higher prepayment and other income related to portfolio turnover. Portfolio yield excluding the impact of prepayments was up 30 basis points to 13.9% from 13.6% in the prior quarter. Resulting in an increase in investment income when excluding the impact of prepayment and other activity. Debt investment income for the quarter was up 48% to $8.4 million or $0.50 per share compared to $5.9 million or $0.34 per share in the first quarter of 2018. Expenses during the quarter were $7.7 million consisting of interest and fee expense of $2.5 million, base management fee of $1.8 million, income incentive fee of $2.2 million and administrative and general expenses of $1.2 million. The increase of total expenses from $6.6 million in the first quarter of 2018 is primarily due to higher base management fees and income incentive fees due to portfolio growth and strong fund performance. We recognize net realized gains of $0.8 million or $0.04 per share in the second quarter of 2018 from the disposition of investments in three portfolio companies. In addition, we had a net change in an unrealized depreciation during the quarter of $1.2 million or $0.07 per share consisting…

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

[Operator Instructions] our first question comes from George Bahamondes of Deutsche Bank. Please go ahead.

Just a few questions following your prepared remarks. You had mentioned there's about $50 million of fundings in the second quarter across nine companies. Can you guys disclose how much of $53 million was tied to investments that were close in the second quarter versus prior commitment to that or unfunded in the second quarter?

George, we can get that information, we don't have that breakdown handy, but I would say generally it's a sum from existing unfunded commitment and then a portion from customers that close during the quarter, but if I were to guess I'd say it's probably 50-50. We'll look through and come back to you, [indiscernible] information for you.

Great. We can follow off offline, its fine. Next one, you had mentioned there was a co-investment in the second quarter. Are you able to provide any additional color?

We don't generally disclose who are the co-investees. I think the good news is again along the theme of portfolio diversification, keeping our maximum transaction sizes reasonable with the goal of diversity. So I think it was consistent with that objective.

Absolutely, okay great that's fine. Next one here, I may have - I missed this. You mentioned you rotated out of top five investment, was that in the second quarter or was that subsequent to 630.

Both so, Ring was our largest investment during Q2 and so Ring prepaid at the beginning of Q2 and then here in Q3 we had another top five as we announced in today's earnings release subsequent we had another top five rotator [ph].

Got it and let's see. That was it from me. We'll offline - regarding that first question. Thank you.

Our next question comes from Christopher Nolan of Landenburg Thalmann. Please go ahead.

Sajal, just confirming you reiterated leverage target of 0.6 to one times NAV, is that correct?

Correct.

Great. And then are you guys still need to renegotiate the bank revolver, if you wanted to take the leverage ratio above 1.0.

No - as we mentioned in our proxy, we have our lenders are supportive we could and there maybe periods where we may take that leverage ratio higher as we said in the proxy in between capital raises for short periods of time, but the target is 0.6 to 1.0.

Got it. Thank you. And then, Andrew it seems to me that most of the prepayments where almost all the prepayment may have come from Ring, is that fair characterization?

That's correct.

And what was the end of term payments in the quarter?

The aggregate amount, I don't have it off hand, but generally it's about 2% of the total yield.

Okay so you have 17.2% and that will be 2% off, so it will be 2% off that 17%.

Yes.

Right.

I think it was 2.2% was the accretion during the quarter.

From the non-prepayments.

Correct.

So 17.2%, 3.3% was related prepayments and 2.2% was related to end of term payment, income accrual.

And then finally, I guess for Jim or just for anyone. I'm trying to get the - you guys sound pretty enthusiastic about the conditions. I mean obviously the pipeline is starting to grow, the margins are expanding and so forth, what are you seeing in the venture debt lending space. Are you seeing new entrants come in? If you can give a little characterization of them that would be helpful?

And thanks I like how you're asking all three members of the team here I didn't want to be left out. So I'd say overall, that there really hasn't been change things still remain the same in the sense of, it's about reputation, references and relationships what we call the three R's. It's a fairly close community here among the leading venture capital investors and experience counts, track record counts. Also that you know what you're doing, so the Venture Growth stage our biggest competition remains one thing, equity. And that's it, we just other [indiscernible] may float in and out and do venture lending here and there, but really haven't seen any change in that landscape.

Great. Thanks for taking my question.

It was high barriers entry to this segment.

Yes, I know that I guess - you get money coming in, when it gets attractive enough regardless of that, like flows out too. So I was just here, so what you're seeing? Okay great. Thank you for taking my questions.

Our next question comes from Ryan Lynch of KBW. Please go ahead.

The first one, clarification and also a question, I believe you guys said - you guys had another top five investment prepay in the third quarter. Did you say that, there was $3 million of additional income associated with that prepayment and then also, you guys have about $50 million prepayments quarter-to-date in the third quarter that's really strong. Can you just give us a sense of so far quarter-to-date how much accelerated income you guys have already received so far?

Yes, let me start and then Andrew jump in, so correct Ryan. $59.3 million of early principal payment so far in the quarter, offset by roughly $18 million of new loan fundings that we've had, so strong start, we're only one month into the quarter so redeploying those proceeds and yes I did say from the prepayments over $3 million of additional interest income as a result. Andrew any more color on that?

No, you covered it.

Okay, was the $3 million additional interest income was that from all of the other, about $59 million prepayments or just from the one top five investments.

Correct, all $59 million [indiscernible].

Perfect. Okay, well you guys quarter-to-date another strong quarter of prepayments, you guys have strong prepayments in the second quarter as well. I mean you guys are lenders that's a good thing, it obviously gets your money back and particularly when you guys are getting strong fees associated with that, so there's no doubt that's a good thing and maybe that speaks to the quality company you guys are underwriting that they're paying back early because they're having that much success. Just the other counterpoint about though is, with the strong prepayment obviously it's hard to grow the portfolio in that environment, can you just give any sort of outlook on where we are [indiscernible] already been strong prepayments but do you guys foresee, that continuing and if that does, how do you guys grow your portfolio in that environment, which again it's good to get your money back, [indiscernible].

Yes, good question Ryan so. Maybe to start with, a customer gets caught. So we can't avoid getting our money back and that's the touchdown to use Jim's favorite analogy and so we helped our customers score the touchdown and we're appreciative of that. to the extent that customers finance us out because of significant equity capital raises, if in those perspective we're using analogy again that it's half time, we're going to sit back on the bench because most of our portfolio companies burn cash and we expect to call back in the game in a quarter or two and so those are not lost opportunities, those are income generating and return generating events and then we can come back, see how they perform and come back and provide them more capital. So I'd say again overall very positive events and we're very pleased with them. In generally especially given I know some of the concern was concentration in our larger exposures and so we want to be mindful of some of that feedback and again that with the co-investment relief and the additional leverage will allow us to optimize the portfolio side, so working hard to address some of the concerns associated with our portfolio. I think the bigger picture as Jim talked about the venture equity markets are strong, the venture debt or the demand for venture debt is particularly strong as reflected by the $200 million of signed term sheets I think that was a record low for a quarter for us, for signed term sheets and then $140 million of closed deals. The pipeline is the biggest it's been, so I would say again it's we continue to feel pretty confident in our ability to grow the portfolio on a year-over-year basis and again we're blocking and tackling on a quarter-to-quarter basis.

Okay that's helpful and makes sense and again, getting repayments and prepayments is always a good thing as a lender. Just one last one on PillPack I'm not sure if you can answer this but obviously saw you guys talk about that getting repaid in the third quarter, there is nice 9% end of term payment. I also saw you guys have like $55,000 equity investment with the cost and fair value both at $55,000. Do you guys expect that to appreciate in the third quarter and can you give us any sense of what sort of gain you guys are anticipating with that sale?

I can answer that Ryan. I think overall we've written up the position to what the exit value was because it was an announced transaction relatively earlier in the quarter, so this wasn't something new to us, so I think come back to the quarter.

If you look at the Q that was filed, you'll see that the fair value associated with the mark up.

Yes the fair value, I think the fair value is the position we've written up to around [indiscernible]. $500,000.

Okay, sorry. That makes sense I was referring to the old Q to I guess your Q1, Q2 hadn't come out but it just come out, so the fair value in the second quarter should reflect the actual value. So okay, that's helpful. That's all the questions. Thanks.

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

The $59 million of early principal repayments that have occurred in the subsequent event, would those have come from the clear category?

There is a combination so, a number of those positions because of the timing of when the prepayments occurred we had upgraded them during the quarter, so I would say larger percentage of it is just going to come from that one.

Some but not all.

Correct.

Some but not all, okay. Well as we haven't had a chance to take a look at the Q. can you walk me through what the top five names are in the portfolio as of the end of the second quarter?

Yes, so I'll let to have any specific questions about the companies themselves. I think Jim and Sajal are okay at some point, but FinancialForce is our number position. View [ph] is number two, Rent the Runway is number three, WorldRemit is number four and Virtual Instruments is number five.

I'm sorry I didn't hear number four.

Number four is WorldRemit.

WorldRemit, great. Okay and on the two orange, which I - is Munchery and I assume still Mind Candy, any update on the what you guys are doing to help realize the value of those?

Yes, we continue to work actively with the companies investors and help them kind of as they reposition themselves and so I'd say we continue these very active, as they optimize the businesses. I don't think there are any public updates specifically to those companies but they're hard at work.

Okay, all right. That's it from me. Thank you.

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

Thanks operator. In short if you can't tell we're pretty excited to hear about the remainder of 2018 and what we believe it holds and still for our business. I'll close again by expressing my appreciation to all of you for your continued interest and support in TriplePoint Venture Growth. Thanks everyone and we'll speak with you again soon. Take care

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