Good afternoon, and welcome to the TriplePoint Venture Growth First Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Christopher Gastelu, Interim Chief Financial Officer. Please go ahead.

Thank you, Shawn, and thank you, everyone, for joining us today. We are pleased to share with you our results for the first quarter of 2019. 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 will 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 you that you refer to the 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. Investors are cautioned not to place undue reliance on any forward-looking statements made during the call, which reflect management's opinions only as of today. To obtain copies of our latest SEC filings, please visit the company's website at tpvg.com. Now, I'll turn it over to Jim.

Thanks, Chris, and good afternoon, everybody. It's been less than two months since our last earnings call, which was a special day as it marked the fifth anniversary since our IPO and a period of outstanding growth, achievements and results for our shareholders. These included all time performance records last year, setting records for investment income, net investment income, investment fundings, portfolio growth, earnings per share and a record dividend payout to shareholders. Picking up where we left off last quarter, I'm pleased to report that the strong finish to 2018 is carried over and continue here into 2019 and we're off on one great start to this year. Not only did we have a strong first quarter of originations fundings and portfolio growth that translated once again into another strong quarter of earnings, but the quarter also positioned us well for the remainder of 2019. We had several notable achievements last quarter. Our portfolio reached the highest level since our IPO. We had a 71% increase in the dollar amount of new sign term sheets, adventure growth stage companies during the first quarter of 2019 compared with the first quarter of 2018, an all-time high. We also had a 66% increase in new debt and equity financing commitments over the comparable period. We continue to diversify our portfolio and to generate attractive portfolio yields during the quarter. Our top five investments now represent 37% of our portfolio and our weighted average portfolio yield on our debt investments for the first quarter was 16.5%. So as you can see from our yield, we are not sacrificing price as we increase our volumes. We also continue to have positive events in our portfolio with a number of companies raising new rounds of capital or being acquired, Sajal will provide more specifics…

Thank you, Jim and good afternoon everyone. During the first quarter we signed $250 million a term sheet to TriplePoint Capital, and closed a $191 million of debt commitments with nine companies and added five new companies to the portfolio at TPVG. The first was Adjust, which is a leading mobile measurement and fraud prevention company. Adjust provides high-quality analytics, measurement and fraud prevention solutions for mobile app marketers worldwide, enabling them to make smarter and faster marketing decisions. Adjust has raised more than $30 million of capital from Highland Europe and other investors. ClassPass is a subscription based marketplace that lets users find a book, fitness classes. With over 8500 partners in 49 cities worldwide, ClassPass connects members to a variety of fitness experiences and leverages proprietary technology to dynamically merchandise and surface over a million fitness classes for a seamless booking experience. ClassPass has raised over $200 million of capital from General Catalyst, Thrive Capital, Google Ventures and Temasek. Knotel provides modern business headquarters as a service, giving medium sized companies a scalable and adaptable office space solution that can grow or shrink on demand based on their needs. Knotel has raised over $160 million of capital from Norwest Venture Partners, Newmark Knight Frank and others. Outdoor Voices is a clothing company that makes unique women's and men's athletic apparel. The company has raised over $60 million of capital from General Catalyst, Google Ventures and others. Upgrade is a consumer credit platform that offers access to affordable personal loans and lines of credit with credit monitoring and education tools that help consumers better understand their credit. The company has raised over $120 million of capital from Union Square Ventures. FirstMark, Credit Ease and others. As Jim mentioned, we achieved a record level for our investment portfolio this quarter…

Thank you, Sajal. As mentioned by Jim and Sajal Q1 was an exceptional start to the year and another strong quarter for TPVG. Q1 total investment and other income was $17.5 million or $0.40 per share compared to $12.6 million or $0.34 per share for the same quarter of 2018. Our investment portfolio generated a weighted average portfolio yield of 16.5% during the quarter, including prepayments and other activity and 13.8% without. This is compared to 14% and 13.6% in Q1 2018. The increase in total investment income and yield relative to the prior year was primarily due to portfolio growth and higher prepayment and other income related to portfolio turnover. The increase in recurring portfolio income is due to both portfolio growth and the favorable impact of the rise in benchmark interest rates. Expenses during the quarter were $7.6 million consisting of interest and fee expense of $2.2 million, base management fee of $1.8, income incentive fee of $2.5 million and administrative and general expenses of $1.1 million. Net investment income for the first quarter was up 67% to $9.9 million or $0.40 per share compared to $5.9 million or $0.34 per share in the first quarter of 2018. We had nominal net realized losses in the first quarter due to foreign exchange effects and had net unrealized gains during the quarter of $1.2 million or $0.05 per share consisting of mark-to-market activity on the investment portfolio. The mark-to-market increase was primarily due to price appreciation in our publicly traded equity holdings in Farfetch Limited and was somewhat offset by reversals in unrealized gains associated with loans that had been marked up due to pending acquisitions or anticipated prepayments. Net increase in net assets for the quarter was $11.1 million or $0.45 per share compared to $7.9 million or…

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

[Operator Instructions] Our first question comes from Finian O'Shea with Wells Fargo Securities. Please go ahead.

Hi, guys. Good afternoon. Thanks for taking my question. Sajal, I appreciate the color on your unfunded and portfolio company advance [ph]. A question on I think you mentioned a specific form of term debt that would be perhaps an ultimate fallback plan. Can you kind of give us more color on what you meant with the type of term debt you would issue, you know, if all of the other buckets of liquidity didn't come through?

Yeah, Finian. Good question. So it's not that we've looked at long term debt as a substitute. I think the way we view it is we use our warehouse revolver to meet the needs of unfunded commitments when and if they come in. And then as we get up to higher utilization on our warehouse then we issue long-term debt to take out the warehouse and replenish it. So then we then use that to kind of scale back up as the fundings come in.

Sure, very well. And a question you guys talked about it, both Sajal and Jim talked about underwriting standards as you grow. I just one thing that stood out a little bit to me at least and correct me if I'm wrong is some of these companies you mentioned, I think one had just $60 million raised so far, one just $30 million raised so far, seems like a little bit lower, you know, the numbers you usually throw out are say 200. So could you give us a little contacts you know understanding that, it's just one quarter. But are these - you know maybe a little earlier stage or are they self-funding in some way, any color there?

Yeah. Great. Another really good question Fin. So I would say. I think it's a testament to the capital efficiency of our portfolio companies and how great at work they are. I'll use one example. So the company - one company and this is in the public domain, company called Adjust, it's disclosed in the public domain, it's raised $30 million of equity capital. It's actually profitable. So we provided I think 28 million loan to profitable EBITDA positive company yields north of 13%. So we're very proud of their capital efficiency and I think again it's a testament to the strong VC relationships that we have, where we're getting referrals to these really high quality capital efficient companies. And I'd say, again there's no specific trend. I think it's industry specific and I think the ones that may have raised less equity capital generally has been more capital efficient, but it's not in any way of us going downstream or early stage, we're sticking to the venture growth metric and if anything - it's just we're cherry picking and setting the bar even higher for the quality of companies we work with.

Guys, guys. Thanks so much.

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

Hi. Good afternoon. In your mention of subsequent events, so you didn't mention whether or not you had had any repayments thus far in the second quarter. Have you had any repayments in the second quarter?

No repayments. That was - it should have been in the ER [ph] or it is in the earnings with case of a yes, no repayments as or prepaying, sorry.

Okay. I'm not sure, I have anything else. I think that'll do it for now. Thank you.

Okay. Thanks, Casey.

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

Hey, good afternoon. I wanted to follow back up on the question regarding unfunded commitments. So if we look at that balance of about $380 million, that's quite a bit larger from the last quarter, which can be a good thing as you guys are looking to grow your portfolio and have a lot of capital to deploy. But I'm just wondering, that is a large number, it's about 70% of your portfolio, it's about 130% of your equity base. So it's a very large number and I'm just wondering how do you guys think about that when you - as you guys are taking on new unfunded commitments. You guys try to manage that at some sort of absolute level, some sort of percentage of your portfolio equity basis? Just any thoughts on that would be helpful.

Yeah. No, we're absolutely managing our funding capacity. I think we referenced that kind of how we operate with regards to short term debt, long-term debt, plus we have the benefit because as you can appreciate Ryan these are short term amortizing loans. We get our principal back and we get natural amortization, plus prepay. So we're absolutely on top of managing that. I think we also want to take advantage of the lower asset coverage ability and to lever up the business. And so I would say we're active at work managing them. I think we have the challenge as we talked about earlier in the prepared remarks of the over funding of equity, I think I mentioned $3.3 billion has been raised by 16 of our portfolio companies in the past 15 months that have slightly under $200 million of unfunded commitment with us. We would - we would hope for those companies to utilize our debt. The challenge is when really good things happen, the large equity raises or acquisitions those goes - those go unutilized. So we're actually thoughtful, mindful and vary on top of them.

Okay. As you mentioned in your prepared comments no prepayments this quarter, which is a good thing as you guys are trying to grow your portfolio. But obviously in the past prepayment fees has been a nice driver of really high effective yield in the portfolio. As I look at your slide deck on page 27 and as you guys look at the visibility into Q2, should we expect that, that effective yield of 16.5% to maybe come closer down to the core yield of 13.8% as prepayments have slowed so far this quarter or does that look like that may potentially ramp up further down the line?

You know, all these things are always hard to predict. But let's say this, so in general we expect and have always given guidance of one to two prepayments per quarter and it's going to be part of our activity and part of our yields, but we always can get down to you know specific crystal ball vision next 30, 60 days necessarily. But I would say in general, there'd be a decrease if there's not a lot of prepay…

Yes. So I would say we focus on the core portfolio which Ryan will be from the coupon and OID and end of terms in that 13% to 14% bucket. And then the impact of prepay is I think as we've talked about before, it's really a function of how season those loans at prepay are and to the extent that they're more seasoned than there there's a lower impact to the portfolio yield from the prepay and to the extent that there's no prepay then obviously there's no impact or benefit and the portfolio yields will stay between that 13% to 14%.

But as Jim said, we continue to believe one to two a quarter is what our expectations are.

Okay. And then one last one. There have been several high profile tech IPOs in 2019, it looks like the pipeline is pretty strong for those two - to continue throughout the year. I'm just wondering you know how did - how did those high profile tech IPOs, do they affect your guys business at all?

No, remember I mean, we're dealing with the VCs and the VCs make their investments you know, three to 10 years or actually it's longer, yeah, six to 10 years before an altered exit event happens. And so I would say that the IPO and the M&A - or the IPO market in particular does not impact early stage or venture growth stage VCs, because they're building multibillion dollar businesses over time and they don't look to flip them quickly. I think that's more of what impacts that momentum, late stage, private equity or tourist equity capital that comes in that at times competes with our debt.

And I would only add as we've been saying earlier to, even on the yield aspect. So the business is about our core business and the warrants when they come in that's great. And we've always said that's gravy, but that's kind of an add to the overall business model. And for sure with our venture growth portfolio companies they have their eyes set on what's happening in overall public markets and those can be helpful as they think about their liquidity timing and their events. But our business is not based on whatever is happening in the public markets here and there, but without a doubt there's been some recent venture backed activity and a number in the pipeline and that could be seen as a positive as some of our companies think about it.

Yeah, it causes other companies to accelerate growth to the extent that they see the IPO window opening and they've - so causing them to accelerate growth causes them to spend more money, which causes a need to raise more capital. And the beauty of debt is we don't set valuations. And so we're definitely expecting to see continued demand for debt as companies think about going public and wanting to top off their capital bases with some incremental capital.

Okay. I appreciate that color. Those are all my questions. I appreciate the time today.

Thanks, Ryan.

Our next question comes from Christopher Nolan with Ladenburg Thalmann. Please go ahead.

Hey, guys. Are you still continuing to guide for $75 million to $150 million in quarterly portfolio growth in 2019?

For a quarterly portfolio funding is correct, yes.

Okay…

Sorry, go ahead, Chris.

And then offset by the prepayments?

Prepayments, correct.

Okay. And then on the topic prepayments. Looking at your disclosures, the all-in yield on portfolio the quarter was 16.5%. Last quarter was 18% percent, but this quarter prepayments actually went up. And so I think - I would think the debt portfolio will go up because prepayment fees would drive it up higher, unless I'm missing?

It's a function of how the season the loans are as well. So the more season the more of the end of term payment that you've already accrued to incomes, so the left lower of a boost that you'll have from the prepay.

Got it. And final question Sajal. Given that the venture market is so robust and these guys are raising equity, which seems to be pretty robust pace, how does that affect the terms and conditions of venture debt lender like yourselves can demand. I mean, does it put you guys in the more defensive position in terms of being able to ask for terms of conditions…

Yeah, great question, Chris. So I mean, I think we're proud of the fact, if you look I think every quarter since IPO except one, our portfolio has been above 13% without the benefit of prepays and every quarter last year we were in the high 30s, low 40s. So without again prepay. So I think we feel really good about - we hold the line, so I would say unlike probably less experienced venture lenders you know, we know the appropriate balance between risk and return. And so we hold the line on structures, credit quality, I mean, as I mentioned we lend to a profitable company this quarter and charge them north of 13%. So again, I think we are keeping standards pretty high. We're not looking to lend to profitable companies. Keep that in mind it was a great sponsor relationship that we have. But yeah, I think we're keeping our standards the same no change and no change to pricing or structure either.

Okay. That's it from me, guys. Thank you.

Our next question comes from George Bahamondes with Deutsche Bank. Please go ahead.

Hey, guys. Good afternoon. Thanks for taking my question. You know, it seems like things are going relatively well, right? You know, capital raising is still at a really solid pace from VC perspective, continue to source deals. That assumed to be difficult, credit qualities continue to improve. If you think about your biggest challenge, it seems to me like converting the unfunded to funded and growing the portfolio seems to be - maybe the biggest challenge for TPVG. How would you think about that on your end? How would you maybe think about your biggest challenge? I think that's my perspective. I wanted to get your thoughts there?

Yeah. George, I wouldn't say the challenges necessarily unfunded commitments. I think there's this natural balance with you know, I would say, scale and the fact that we have a rapidly advertising short term loan portfolio and so we're managing the fact that, yes, we have line of sight and visibility to grow meaningfully, but we also know that we're going to have prepayments, we're getting principal back. And so we want to be mindful in terms of how we raise capital and the impact to our dividend and things of that nature. So I would say, recall the challenges [ph] I'd say that's what our investors passed to do the great news is we have a fantastic track record over the last five years for TPVG, they are being thoughtful and aligned with our shareholders. But I'd say yeah, it's great when those are the things that we're managing to rather than credit challenges or trying to source deal flow. I mean, those are things that our platform is doing a fantastic job that are naturally coming to us.

And the only thing I would add is that, there's lots and lots of opportunities here, we have a record pipeline and I wouldn't necessarily say it's a strong challenge, but we subtle [ph] we want to keep our heads down and stick to our knitting and intelligently look through our entire pipeline and growing intelligently.

And again, credit was always our focus. So you know, keeping credit quality strong, being proactive is always priority number one.

Great Well, thanks for answering my question. That's all I had for today.

Thank you, George.

[Operator Instructions] Our next question is a follow up from Casey Alexander with Compass Point. Please go ahead.

Yeah, hi. I had two follow up questions. One, have you noticed any change in the competitive environment. You know, have things become more competitive or have things opened up a little bit. I know some teams have been lifted out of banks and things like that. Have you noticed any change there?

You know, Casey, I don't want to sound like a broken record or jaded or haven't done this too long, but it's a very good question. It's a question that seems to come up every month. Sometimes it's not every quarter among folks and a good one ask. But again with our reputation our track record and our record - sorry, our relationships and our focus on selectivity and working with justice narrowly defined group of select venture capital investors. In our category we have not seen any kind of competitive change. There is always a call or two have you heard about this or that [indiscernible] It takes a lot more than money and a business card to be in the venture lending business and there is a long track record of folks that don't understand the business and you know, newbie's who think they know the business. But it's that focus at the end of the day, at least for us, which has been a proven formula success and we see no change to that nor do we see any kind of competitive developments that we're losing or need to sleep. The focus includes not just the investors, obviously that the technology, and it's our pricing strategy and our credit thoughts.

Okay. Thank you. Secondly, you know we have seen a far more robust IPO market. But I can only think of maybe a couple of companies since the beginning of 2018 that you guys have had come public and you guys are arguably investing in venture growth companies that are - you know should be at the door of going public. Have you noticed an increase in the potential for your portfolio companies to enter the public markets? It would seem to me that the door would be very - more open to them now than it may have ever been?

Great, question Casey. So there is no doubt that I think more entrepreneurs are thinking about the IPO as a viable form of exit and liquidity. I'd say that to go to the Fed the portfolio is that some large incumbents have made offers too good to refuse or turned down by our entrepreneurs and their investors such that they opted to sell rather than go public. But I do think there is another class of - within the portfolio in particular of entrepreneurs whose goals are to run publicly traded companies, are comfortable with. The fun aspects of being publicly traded, and so we definitely expect to see an increase within the portfolio of publicly traded companies in the near term.

All right, thanks. Thanks for taking my questions.

And this time, there are no further questions. This will conclude our question-and-answer session. I would like to turn the conference back over to James Labe for any closing remarks.

I'll close again by expressing my appreciation to all of you for your continued interest and your support in Triplepoint Venture Growth. Thanks, and we look forward to your participation and speaking with you all again here as 2019 continues to unfold.

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