Triplepoint Venture Growth Bdc Corp. · NYSE:TPVG

Triplepoint Venture Growth Bdc — Q2 2020 Earnings Presentation

45 slides from Triplepoint Venture Growth Bdc's earnings presentation, Aug 5, 2020

  1. Slide 1: Investor Presentation

    Investor Presentation Q u a r t e r E n d e d J u n e 3 0 , 2020 A u g u s t 5 , 2 02 0 w w w. t p v g . c o m

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements Some of the statements in this presentation constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this presentation involve risks and uncertainties, including state

  3. Slide 3: TriplePoint Venture Growth BDC Corp. Overview

    TriplePoint Venture Growth BDC Corp. Overview NII Return (Average Equity & Average Assets) MARKET CAP COMMON STOCK 16.0% 14.9% $339 million TPVG (NYSE) 14.0% 13.6% 12.1% 11.9% 12.0% 12.9% 12.2% 11.5% 5.75% NOTES DUE 2022 12.0% 10.2% August 4, 2020 TPVY (NYSE) 10.0% 7.8% 8.0% 9.7% 9.4% 9.0% 8.6% 6.0%

  4. Slide 4: Highly Differentiated, Built for Success, Aligned with Public Shareholders

    TriplePoint Venture Growth BDC Corp. Overview - The 4 R’s - HIGHLY DIFFERENTIATED Relationships Reputation BUILT FOR SUCCESS References Returns ALIGNED WITH PUBLIC SHAREHOLDERS DELIVERING RESULTS 4

  5. Slide 5: Highly Differentiated

    TriplePoint Venture Growth BDC Corp. Overview HIGHLY DIFFERENTIATED  Lend to venture capital backed companies at the venture growth stage INVESTMENT  Target companies backed by a select group of leading venture capital investors STRATEGY  Focus on technology, life sciences, and other high-growth

  6. Slide 6: Built for Success

    TriplePoint Venture Growth BDC Corp. Overview BUILT FOR SUCCESS • Externally-managed business development company (BDC) • Common stock trades on the New York Stock Exchange: “TPVG” STRUCTURE • $74.8 million in aggregate principal amount of notes trade on the New York Stock Exchange: “TPVY” • $70.0 m

  7. Slide 7: Aligned with Public Shareholders

    TriplePoint Venture Growth BDC Corp. Overview ALIGNED WITH PUBLIC SHAREHOLDERS • 1.75% management fee SHAREHOLDER • 8% annualized hurdle rate for income incentive fee FRIENDLY • Total return requirement whereby incentive fees are capped at 20% of FEE STRUCTURE cumulative net increase in net assets r

  8. Slide 8: Delivering Results

    TriplePoint Venture Growth BDC Corp. Overview DELIVERING RESULTS  $3.7 billion of signed non-binding term sheets at TPC (1) DEMONSTRATED  $2.5 billion of cumulative originations ORIGINATIONS  $1.6 billion of cumulative fundings CAPABILITIES (2)  $18 million of realized credit losses net, of real

  9. Slide 9: Second Quarter 2020 Highlights

    Financial Highlights SECOND QUARTER 2020 HIGHLIGHTS  Earned net investment income of $11.5 million, or $0.38 per share;  Net increase in net assets of $21.2 million, or $0.69 per share;  Recorded $19.4 million from the realization of warrant and equity gains from the sale of CrowdStrike, Inc. sha

  10. Slide 10: Recent Developments

    Financial Highlights RECENT DEVELOPMENTS Since June 30, 2020(1):  The Company received $29.1 million of principal prepayments generating approximately $1.0 million of prepayment fees and interest income;  TPC’s direct originations platform entered into $43.2 million of additional non-binding signe

  11. Slide 11: Quarterly NAV Per Share Roll Forward

    Financial Highlights Quarterly NAV Per Share Roll Forward $0.59 $(0.59) $0.05 $ 13.17 $0.38 $(0.36) $ 12.85 $0.63 $(0.38) NAV as of 3/31/2020 Net Investment Dividend to CrowdSrike CrowdSrike Reversal of Realized Loss Other Unrealized NAV as of 6/30/2020 Income Shareholders Reversal of Realized Gain

  12. Slide 12: Investment Highlights

    Investment Highlights Industry Leading Differentiated Sponsor With Premium Investment Brand, Track Record Strategy and Platform Attractive Risk- Large And Growing Adjusted Returns Market With High With Equity Upside Barriers to Entry Potential Experienced Team Strong Financial Profile With Time-Test

  13. Slide 13: Highly Experienced Management Team

    Highly Experienced Management Team JIM LABÉ SAJAL SRIVASTAVA CHRIS MATHIEU Chairman & President & Chief Financial Officer Chief Executive Officer Chief Investment Officer  Co-Founder of TriplePoint  Co-Founder of TriplePoint  Joined TriplePoint Capital Capital Capital in 2019 as CFO  Pioneer of

  14. Slide 14: TriplePoint Capital Platform Overview

    TriplePoint Capital Platform Overview KEY HIGHLIGHTS  Founded in 2005 by Jim Labe and Sajal Srivastava  Headquartered on Sand Hill Road in Silicon Valley with regional offices in New York City and Boston  Provides debt, equity and complementary services to privately-held, venture capital-backed c

  15. Slide 15: TriplePoint Capital Differentiated Investment Strategy

    TriplePoint Capital Differentiated Investment Strategy Target venture capital Invest with TPC’s Select backed companies Group of leading venture across the globe capital investors Primary focus in technology and other Unique, multi-stage high-growth industries investment approach – the Lifespan Appr

  16. Slide 16: TriplePoint Capital - Financed 400+ Leading Companies

    TriplePoint Capital - Financed 400+ Leading Companies (1) (1) Selected list of current and past TriplePoint Capital customers 16

  17. Slide 17: TriplePoint Capital's Unique Lifespan Approach

    TriplePoint Capital’s Unique Lifespan Approach Identifies Strong Opportunities and Establishes Relationships Across All Stages TPVG’s Target Stage PUBLIC • Publicly traded shares VENTURE GROWTH STAGE LATER STAGE • “Crossed the chasm” • Generally at least $20 million in revenues EARLY STAGE • Further

  18. Slide 18: TPVG's Approach / Venture Growth Stage

    TPVG’s Approach / Venture Growth Stage We Take Our Customers Through The Red Zone To the End Zone Venture Seed Early Later Growth Stage Stage Stage Stage 18

  19. Slide 19: Why Do High Growth Companies Use Venture Debt?

    Why Do High Growth Companies Use Venture Debt? Value Proposition of Venture Debt Helps finance Provides runway Additional business acceleration and/or extension for validation provides expansion of the achieving additional negotiating leverage business milestones for higher valuations Complements Lo

  20. Slide 20: Compelling Relative Risk-Adjusted Returns

    Compelling Relative Risk-Adjusted Returns High Yields to Maturity With VC Equity Support & Low Total Leverage  Generally short term financings (3-4 years) Higher Return Potential  Typically amortizing facilities Through Warrants and Prepayments  Prepayments typically boost returns from accelerati

  21. Slide 21: Venture Growth Stage Market

    Venture Growth Stage Market Fragmented Market with Limited Competition Given High Barriers to Entry S E E D S TA G E EARLY STAGE E A R LY S TA G E DEBT FUNDS L AT E R S TA G E LATER STAGE OTHER DEBT FUNDS VENTURE BDCs VENTURE BANKS V E N T U R E G R O W T H S TA G E OPPORTUNISTIC DEBT FUNDS PUBLIC 2

  22. Slide 22: Illustrative TPVG Product Pricing Summary

    Illustrative TPVG Product Pricing Summary Customized Debt Financing Based On Analysis of the Prospective Obligor PRODUCT TRANSACTION SIZE TERM COLLATERAL WARRANTS Growth Capital $5mm-$50mm 36 – 60 Months Senior On All Assets Typically Loans Equipment $5mm-$25mm 36 – 48 Months Equipment Typically Fin

  23. Slide 23: Time-Tested Investment Process & Portfolio Management

    Time-Tested Investment Process & Portfolio Management Benefits From More Than 30 Years of Experience and Expertise INVESTMENT & INVESTMENT ORIGINATIONS LEGAL INVESTMENT PROCESS CREDIT ANALYSIS COMMITTEE  Leads and initial  Initial screening  Transaction presented  Transaction screening performed

  24. Slide 24: Strong, Disciplined Portfolio Growth

    Strong, Disciplined Portfolio Growth – As of 6/30/20 Signed Term Sheets at TPC; Commitments and Fundings at TPVG ($mm) (1) $3,710.9 $3,490.0 $2,604.4 $2,515.0 $2,386.3 $1,718.2 $1,615.8 $1,562.7 $1,451.3 $1,198.4 $922.2 $1,106.4 $873.8 $771.5 $657.2 $446.0 $484.5 $420.5 $270.0 $262.0 $159.9 2014 201

  25. Slide 25: High Yielding, High Quality Portfolio

    High Yielding, High Quality Portfolio (1) $652.5 13.7% $158.2 $21.0 $158.2 $19.3 MILLION(1) YIELD(2) MILLION(2)(1) MILLION MILLION(2)(1) MILLION DEBT PORTFOLIO YIELD PROFILE WARRANT PORTFOLIO EQUITY PORTFOLIO DEBT INVESTMENT FAIR WEIGHTED AVERAGE YIELD WARRANT FAIR VALUE DIRECT EQUITY FAIR VALUE VAL

  26. Slide 26: Portfolio Overview – Secured, Diversified Lending

    Portfolio Overview – Secured, Diversified Lending (1) Diversified Across Subsectors of High Secured by Either the Entire Enterprise or Growth Industries Specific Assets Consumer Non- Human Durables, 1.5% Resources/Recruit Multimedia and Consumer Retail, ment, 1.4% Design Software, 1.4% 1.6% Commerci

  27. Slide 27: Strong Credit Performance and Proactive Monitoring

    Strong Credit Performance and Proactive Monitoring (1) $700 2.50 2.03 2.09 2.05 1.97 1.94 1.95 2.00 2.03 $600 1.92 1.87 2.00 $500 $400 1.50 ($mm) $300 1.00 $200 0.50 $100 $0 0.00 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Total Investments (FV) Weighted Credit Score Q2 2020 Detailed

  28. Slide 28: Active Customers with Debt Outstanding

    Active Customers with Debt Outstanding 28

  29. Slide 29: Active Customers with Debt Outstanding

    Active Customers with Debt Outstanding 29

  30. Slide 30: Active Customers with Warrants and/or Equity Outstanding

    Active Customers with Warrants and/or Equity Outstanding 30

  31. Slide 31: Active Customers with Warrants and/or Equity Outstanding

    Active Customers with Warrants and/or Equity Outstanding 31

  32. Slide 32: Active Customers with Warrants and/or Equity Outstanding

    Active Customers with Warrants and/or Equity Outstanding 32

  33. Slide 33: Financial Highlights

    Financial Highlights As of June 30, 2020

  34. Slide 34: Key Financial Highlights – 6/30/20

    Key Financial Highlights – 6/30/20 Total Investment Income ($mm) Net Investment Income ($mm) $73.4 $38.3 $64.6 $35.0 $51.5 $43.6 $44.6 $26.3 $42.1 $22.0 $23.0 $23.8 $25.3 $12.8 2014 2015 2016 2017 2018 2019 YTD 2014 2015 2016 2017 2018 2019 YTD 6/30/2020 6/30/2020 Total Investments ($mm) Total Asset

  35. Slide 35: High-Yielding Portfolio

    High-Yielding Portfolio (1) $700 25.0% $600 19.3% 20.0% 18.0% 16.5% 17.2% 16.5% $500 13.9% 15.3% 15.0% $400 13.7% 12.7% ($mm) 12.8% $300 10.0% $200 5.0% $100 $0 0.0% Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Total Debt Investments (FV) Weighted Average Portfolio Yield On Debt Inves

  36. Slide 36: Strong Yields Enhanced By Prepayments

    Strong Yields Enhanced By Prepayments (1) Yields on Debt Investments 25.0% 19.3% 20.0% 17.2% 18.0% 16.5% 16.5% 15.3% 13.8% 13.9% 14.0% 14.0% 12.7% 13.7% 15.0% 12.8% 13.9% 13.7% 13.7% 12.8% 13.0% 12.7% 10.0% 12.7% 10.5% 10.8% 10.7% 10.7% 10.7% 10.6% 10.3% 10.1% 9.8% 9.8% 5.0% 0.0% Q1-18 Q2-18 Q3-18 Q

  37. Slide 37: Financial Highlights

    Financial Highlights NII Return on Average Equity (ROAE) and NII Return on Average Assets (ROAA) Leverage Ratio 1.20X 1.01X 1.02X 1.00X 0.73X 0.73X 0.75X 0.80X 0.68X 0.60X 0.46X 0.45X 0.40X 0.29X 0.22X 0.20X 0.00X Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Debt-to-NAV 37

  38. Slide 38: Q2 2020 Income Statement

    Q2 2020 Income Statement (1) 3 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended 30-Jun-2020 30-Jun-2019 30-Jun-2020 30-Jun-2019 Investment Income Interest Income from Investments $23,269 $17,896 $43,542 $35,043 Other Income 527 1,045 1,095 1,389 Total Investment and Other Income 23,796 18,9

  39. Slide 39: Q2 2020 Balance Sheet

    Q2 2020 Balance Sheet (1) As of 30-Jun-2020 As of 31-Dec-2019 Assets Investments at Fair Value $692,853 $653,129 Cash 19,080 20,285 Restricted Cash 3,871 6,156 Deferred Credit Facility Costs 1,035 1,603 Prepaid Expenses and Other Assets 1,999 2,975 Total Assets $718,838 $684,148 Liabilities Revolvin

  40. Slide 40: Disciplined and Diversified Capital Raising Since IPO

    Disciplined and Diversified Capital Raising Since IPO Equity Capital Raises (1) $81.0 $94.9 Public Offering $22.6 $294.6 Accretive to NAV Public and $96.1 Private GSAM Private Offering Only Offering Accretive to NAV Public Offering Accretive to $147.6 Accretive to NAV NAV 2014 (IPO) 2015 2016 2017 2

  41. Slide 41: Overview of Leverage

    Overview of Leverage (1) SUMMARY OF WAREHOUSE CREDIT FACILITY Facility Size: $300 million – with an additional $100 million available subject to approval by Lenders Lenders: Deutsche Bank AG (Syndication Agent), KeyBank, TIAA Bank, Union Bank, Hitachi Capital and NBH Bank Structure/Collateral: Drop-

  42. Slide 42: Research Coverage

    Research Coverage Casey Alexander George Bahamondes Mitchel Penn (646) 452-7083 (212) 250-1587 (410) 583-5976 calexander@compasspointllc.com george.bahamondes@db.com mpenn@janney.com Chris York Ryan Lynch Christopher Nolan (415) 835-8965 (314) 342-2918 (212) 409-2068 cyork@jmpsecurities.com lynchr@k

  43. Slide 43: Appendix

    Appendix

  44. Slide 44: Strong Demand For Venture Debt

    Strong Demand For Venture Debt Venture Capital-Backed Companies Rely on a Combination of Equity and Debt to Fund Growth Demand for venture debt is driven by VC fundraising and investment activity More than 50,000 investments made representing over $400 Over $200 billion raised by US VCs over the pas

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