Trinity Capital Inc. · NASDAQ:TRIN
Trinity Capital — FY2020 Earnings Presentation
32 slides from Trinity Capital's earnings presentation, Mar 4, 2021
Slide 1: A National Leader in Growth Stage Lending: Q4 and Full Year 2020 Investor Presentation
A National Leader in Growth Stage Lending Fourth Quarter and Full Year 2020 Investor Presentation Exhibit 99.2
Slide 2: Forward-looking statements disclaimer
© 2021 Trinity Capital Inc. | 2 This presentation may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1993, as amended, and Section 21E(b)(2)(B) of the Secu
Slide 3: Agenda
© 2021 Trinity Capital Inc. | 3 Company & Strategic Overview Financial Highlights Portfolio Highlights Venture Capital and Lending Market 4 10 17 23 28 INVESTOR PRESENTATION | AGENDA Supplemental Information 30 Analyst Coverage
Slide 4: Company and Strategic Overview
COMPANY AND STRATEGIC OVERVIEW
Slide 5: Trinity Capital Overview
(1) Historical information includes information and data related to Trinity Capital's predecessor funds, the first of which was launched in 2008, through December 31, 2020. Past performance relates to predecessor funds and is not indicative of future results of Trinity Capital. No assurance can be g
Slide 6: Why Is Trinity Different
© 2021 Trinity Capital Inc. | 6 WHY IS TRINITY DIFFERENT We understand the growth stage world and provide more than money to our portfolio company partners Deep Operating Experience ▪ Highly experienced executive team with startup experience ▪ Decades of in-depth high-tech experience ▪ Numerous U.S.
Slide 7: Trinity Investment Horizon
© 2021 Trinity Capital Inc. | 7 SEED SEED INVESTMENT PROFITABILITY EARLY GROWTH STAGE LATER TECHNOLOGY PROVEN PRODUCT DEVELOPED SALES DEVELOPMENT & REVENUE REVENUE GROWTH C O M P A N Y V A L U A T I O N COMPANY MILESTONES Trinity Investment Horizon Execution Risk vs. Technology Risk INVESTMENT HORIZ
Slide 8: Current Market Conditions and Opportunities
© 2021 Trinity Capital Inc. | 8 CURRENT MARKET CONDITIONS AND OPPORTUNTIES Attractive growth opportunity in the debt and equipment financing space Continued investment in our team and platform ▪ We’ve added to the team over the last nine months ▪ Robust Pipeline activity – 42% increase in opportunit
Slide 9: Business Model and Underwriting Approach
© 2021 Trinity Capital Inc. | 9 Investor Syndicate Revenue & Gross Margins Business Model Disciplined investment approach keeps our annualized loss rate at 26 Bps or 17 Bps when including realized gains(1) (1) Includes historical information of Trinity Capital's predecessor funds, the first of which
Slide 10: Financial Highlights
FINANCIAL HIGHLIGHTS N
Slide 11: Q4 2020 Highlights
© 2021 Trinity Capital Inc. | 11 Q4 2020 HIGHLIGHTS ▪ Net Investment Income (”NII”) of $5.3M ▪ Total Investment Income of $15.3M ▪ NII per share of $0.29 provides 107% distribution coverage ▪ Declared a second dividend distribution of $0.27 consistent with $0.27 in prior quarter Robust Earnings Lead
Slide 12: Quarterly Income Statement
© 2021 Trinity Capital Inc. | 12 QUARTERLY INCOME STATEMENT For the three months ended (In 000’s, except per share amounts) 12/31/2020 9/30/2020 06/30/2020(1) 3/31/2020(1) Total Investment Income $15,340 $13,529 $13,847 $12,248 Interest expense and other debt financing costs 4,340 3,893 4,281 4,259
Slide 13: Balance Sheet
© 2021 Trinity Capital Inc. | 13 BALANCE SHEET December 31 (In 000’s, except per share amounts) 2020 Assets Total Investments at fair value $493,651 Cash and cash equivalents 44,656 Restricted cash 16,445 Interest Receivable 3,468 Prepaid Expenses & Other Assets 1,488 Total Assets 559,708 Liabilitie
Slide 14: Effective Yield vs Core Yield
© 2021 Trinity Capital Inc. | 14 EFFECTIVE YIELD VS CORE YIELD Leading to Strong Earnings $371 $380 $381 $443 11.3% 14.2% 13.1% 13.6% 15.0% 14.6% 14.1% 14.5% 8% 9% 10% 11% 12% 13% 14% 15% $320 $340 $360 $380 $400 $420 $440 $460 Q1 Q2 Q3 Q4 FY 2020 PORTFOLIO YIELDS Total Debt Investments (FV, $ in mi
Slide 15: Debt Capital Structure
© 2021 Trinity Capital Inc. | 15 DEBT CAPITAL STRUCTURE Key borrowing types ($ in million) at 12/31/20 Funding Source Debt Commitment Outstanding Principle Undrawn Commitment Stated Maturity Interest Rate Notes: 2025 Unsecured Notes $125.0 $125.0 - January 16, 2025 7.0% Convertible Notes $50.0 $50.0
Slide 16: Solid Shareholder Returns
© 2021 Trinity Capital Inc. | 16 SOLID SHAREHOLDER RETURNS $0.22 $0.49 $0.76 $1.03 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 Q1 Q2 Q3 Q4 Cumulative Distributions per share for 2020 Total Dividends Distributable Net Income covered dividends by 109% in 2020 Strong Earnings and Dividend Stability Consiste
Slide 17: Portfolio Highlights
PORTFOLIO HIGHLIGHTS N
Slide 18: Portfolio Summary: Industry and Geography Diversification
(1) Based on Fair Market Value © 2021 Trinity Capital Inc. | 18 PORTFOLIO SUMMARY At December 31, 2020 Industry Diversification(1) Geography Diversification(1) Canada: 5.5% 48.8% 6.9% 8.9% 0.4% 3.6% 25.9% 20% 16% 15% 7% 6% 6% 5% 25% Professional, Scientific, and Technical Services Manufacturing Reta
Slide 19: Portfolio Summary: Floating vs Fixed, Investment Type
© 2021 Trinity Capital Inc. | 19 PORTFOLIO SUMMARY At December 31, 2020 75% 25% Floating vs. Fixed Rate(1) Fixed Floating 65% 25% 7% 3% Investment Type Breakout(1) Secured Loan Equipment Financing Equity Warrant (1) Based on Fair Market Value
Slide 20: Potential Warrant Upside
© 2021 Trinity Capital Inc. | 20 POTENTIAL WARRANT UPSIDE • Investment of $17.6 million (50%) • Proceeds of $35.2 million (2X) • Cost of $26.6 million • Potential gain of $8.6 million or $0.47 per share • Investment of $17.6 million (50%) • Proceeds of $52.8 million (3X) • Cost of $26.6 million • Po
Slide 21: Disciplined Credit Rating
© 2021 Trinity Capital Inc. | 21 DISCIPLINED CREDIT RATING Consistent and disciplined underwriting standards $371 $380 $381 $443 2.9 3.2 3.2 3.2 1 1.5 2 2.5 3 3.5 $300 $350 $400 $450 Q1 Q2 Q3 Q4 Total Debt Investments (FV, $ in million) Weighted Investment Credit Rating Q4 2020 Q3 2020 Q2 2020 Q1 20
Slide 22: Trinity Portfolio: Sample List of Portfolio
© 2021 Trinity Capital Inc. | 22 TRINITY PORTFOLIO Sample List of Portfolio
Slide 23: Venture Capital and Lending Market
VENTURE CAPITAL AND LENDING MARKET
Slide 24: Venture Capital Market: US VC Deal Activity
Source: Pitchbook NVCA Venture Monitor Q4 2020 © 2021 Trinity Capital Inc. | 24 $24 $30 $38 $37 $28 $32 $45 $42 $48 $73 $85 $81 $87 $143 $138 $156 2,995 3,405 4,406 4,851 4,598 5,515 6,891 8,018 9,474 10,648 11,276 10,069 10,900 11,287 12,285 12,254 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 $-
Slide 25: Venture Capital Fundraising
© 2021 Trinity Capital Inc. | 25 VENTURE CAPITAL FUNDRAISING $31 $35 $32 $13 $19 $24 $25 $21 $36 $41 $47 $42 $68 $54 $74 $- $10 $20 $30 $40 $50 $60 $70 $80 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Billions Capital Raised ($) US VC fundraising activity Source: Pitchb
Slide 26: Venture Debt Market
© 2021 Trinity Capital Inc. | 26 (1) Pitchbook NVCA Venture Monitor Q4 2020 (2) Based on Management Estimates VENTURE DEBT MARKET Opportunity in an underserved market There were about 10 significant venture debt lenders The top 3 largest players in the industry achieved < ~15% market share(2) $23 bi
Slide 27: Partnership with Top VCs and Technology Banks
© 2021 Trinity Capital Inc. | 27 Multiple shared portfolio companies with top Venture Capital Firms We have established inter-creditor agreements with the banks Combining with bank debt results in a lower blended cost to our customers We provide equipment financing and incremental debt capital PARTN
Slide 28: Analyst Coverage
ANALYST COVERAGE
Slide 29: Extensive Industry Analyst Coverage
© 2021 Trinity Capital Inc. | 29 EXTENSIVE INDUSTRY ANALYST COVERAGE Followed by six firms Trinity Capital is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Trinity Capital’s performance made by these analysts are theirs alone and do not repres
Slide 30: Supplemental Information
SUPPLEMENTAL INFORMATION
Slide 31: Regulation and Structure: BDC and RIC
© 2021 Trinity Capital Inc. | 31 REGULATION AND STRUCTURE BUSINESS DEVELOPMENT COMPANY (BDC) REGULATED INVESTMENT COMPANY (RIC) Trinity Capital Inc. is an Internally Managed BDC under the 1940 Act and Intends to Elect be treated as a RIC for Federal Income Tax Purposes beginning with its Taxable Yea
Slide 32: Thank You
We look forward to our growing partnership. THANK YOU