Triplepoint Venture Growth Bdc Corp. · NYSE:TPVG
Triplepoint Venture Growth Bdc — Q2 2021 Earnings Presentation
44 slides from Triplepoint Venture Growth Bdc's earnings presentation, Aug 4, 2021
Slide 1: Investor Presentation
Investor Presentation Q u a r t e r E n d e d J u n e 3 0 , 202 1 A u g u s t 4 , 2 02 1 w w w. t p v g . c o m
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
Slide 3: TriplePoint Venture Growth BDC Corp.
TriplePoint Venture Growth BDC Corp. Externally-Managed BDC Focused on Providing Customized Debt Financing With Warrants and Direct Equity Investments to Venture Growth Stage Companies in Technology and Other High Growth Industries Backed by a Select Group of Venture Capital Firms 3
Slide 4: TriplePoint Venture Growth BDC Corp. Overview
TriplePoint Venture Growth BDC Corp. Overview NII Return (Average Equity & Average Assets) MARKET CAP (1) $487 million COMMON STOCK Price / NAV (1) TPVG (NYSE) 1.21x EQUITY RESEARCH COVERAGE DISTRIBUTIONS DECLARED 7 analysts $0.36 For Q3 2021 CREDIT RATING (2) BBB Net Investment Income & Dividend Co
Slide 5: Overview: Highly Differentiated, Built for Success
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 5
Slide 6: Overview: 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
Slide 7: Overview: Built for Success
TriplePoint Venture Growth BDC Corp. Overview BUILT FOR SUCCESS • Externally-managed business development company (BDC) STRUCTURE • Common stock trades on the New York Stock Exchange: “TPVG” • $270.0 million in aggregate principal amount of private institutional notes • Managed by an affiliate of Tr
Slide 8: Overview: 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
Slide 9: Overview: Delivering Results
TriplePoint Venture Growth BDC Corp. Overview DELIVERING RESULTS $4.5 billion of signed non-binding term sheets at TPC (1) DEMONSTRATED $2.9 billion of cumulative originations ORIGINATIONS $1.8 billion of cumulative fundings CAPABILITIES (2) $27.2 million of realized credit losses net of rea
Slide 10: Warrant & Direct Equity Investments
Warrant & Direct Equity Investments Future Potential Book Value Upside Significant Realized Gains COMPANY REALIZED GAIN MULTIPLE OF COST BASIS $27.1m 26x $8.3m GAAP unrealized Gain $3.4m 4x $31.8m GAAP Cost Basis $1.8m 160x $24.0m GAAP Cost Basis $1.0m GAAP unrealized Loss $1.3m 8x 84 Warrant Invest
Slide 11: Second Quarter 2021 Highlights
Business Results Second Quarter 2021 Highlights • Signed $250.8 million of term sheets with venture growth stage companies at TriplePoint Capital and TPVG closed $102.5 million of debt commitments to 6 companies • Funded $76.0 million in debt investments to 7 portfolio companies with a 13.2% weighte
Slide 12: Second Quarter 2021 Highlights
Business Results Second Quarter 2021 Highlights • 5 portfolio companies raised in the aggregate $600 million of capital in private rounds Portfolio Company • Groop Internet Platform, Inc. (d/b/a Talkspace) closed its SPAC merger Updates • Portfolio companies Bird Rides, Inc., Enjoy, Inc., Inspirato
Slide 13: Quarterly NAV Roll Forward
Financial Results Quarterly NAV Roll Forward $0.30 $(0.36) $ 13.03 $ 13.00 $(0.02) $0.11 NAV as of 3/31/21 Net Investment Income Dividend to Shareholders Realized and Unrealized Realized Loss on NAV as of 6/30/21 Changes in Fair Value Extinguishment of Debt 13
Slide 14: 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
Slide 15: Highly Experienced Management Team
Highly Experienced Management Team JIM SAJAL CHRIS LABE S R I VA S TAVA M AT H I E U Chairman & President & Chief Executive Officer Chief Investment Officer Chief Financial Officer • Co-Founder of TriplePoint • Co-Founder of TriplePoint • Joined TriplePoint Capital Capital Capital in 2019 as CFO • P
Slide 16: TriplePoint Capital - Industry Leading Venture Lending Credit Platform
TriplePoint Capital - Industry Leading Venture Lending Credit Platform 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 private
Slide 17: 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
Slide 18: TriplePoint Capital - Financed 650+ Leading Companies
TriplePoint Capital - Financed 650+ Leading Companies (1) (1) Selected list of current and past TriplePoint Capital customers including at TPVG. 18
Slide 19: 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
Slide 20: 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 20
Slide 21: 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
Slide 22: 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
Slide 23: 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
Slide 24: 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-$25mm 36 – 48 Months Equipment Typically Fin
Slide 25: Time-Tested Investment Process & Portfolio Management
Time-Tested Investment Process & Portfolio Management Benefits From More Than 30 Years of Experience and Expertise INVESTMENT & INVESTMENT ORIGINATIONS LEGAL INVESTMENT PROCESS CREDIT ANALYSIS COMMITTEE Leads and initial Initial screening Transaction presented Transaction screening performed
Slide 26: Strong, Disciplined Portfolio Growth – As of 6/30/21
Strong, Disciplined Portfolio Growth – As of 6/30/21 Signed Term Sheets at TPC; Commitments and Fundings at TPVG ($mm) (1) (1) Signed term sheet amounts not necessarily indicative of opportunities available to TPVG. 26
Slide 27: High Yielding, High Quality Portfolio
High Yielding, High Quality Portfolio (1) $584.5 13.9% $158.2 $32.3 $158.2 $30.8 MILLION YIELD(2) MILLION MILLION (2) MILLION (2) MILLION DEBT PORTFOLIO YIELD PROFILE WARRANT PORTFOLIO EQUITY PORTFOLIO DEBT INVESTMENT FAIR WEIGHTED AVERAGE YIELD WARRANT FAIR VALUE DIRECT EQUITY FAIR VALUE VALUE ON T
Slide 28: Portfolio Overview – Secured, Diversified Lending
Portfolio Overview – Secured, Diversified Lending (1) Diversified Across Subsectors of High Secured by Either the Entire Enterprise or Growth Industries Specific Assets (1) Figures based on fair value as of June 30, 2021. 28
Slide 29: Strong Credit Performance and Proactive Monitoring
Strong Credit Performance and Proactive Monitoring (1) Q2 2021 Detailed Credit Ratings(2) Category Fair Value ($mm) % Of Debt Investment # Of Portfolio Companies Clear (1) $42.7 7.3% 3 White (2) $483.3 82.7% 29 Yellow (3) $36.5 6.2% 1 Orange (4) $22.0 3.8% 1 Red (5) $- -% - $584.5 100.0% 34 (1) Debt
Slide 30: Active Customers with Debt Outstanding
Active Customers with Debt Outstanding Active Customers with Debt Outstanding 30
Slide 31: Active Customers with Warrants and/or Equity Outstanding
Active Customers with Warrants and/or Equity Outstanding 31
Slide 32: Financial Highlights
Financial Highlights As of June 30, 2021
Slide 33: Key Financial Highlights – 6/30/21
Key Financial Highlights – 6/30/21 Total Investment Income ($mm) Net Investment Income ($mm) Total Investments ($mm) Total Assets ($mm) Note: As of or for the six months ended June 30, 2021. Total Investments and Total Assets shown on a Fair Value basis. 33
Slide 34: High-Yielding Portfolio
High-Yielding Portfolio (1) (1) Weighted average portfolio yields on debt investments for periods shown are the annualized rates of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. The weighted average portfoli
Slide 35: Strong Yields Enhanced By Prepayments
Strong Yields Enhanced By Prepayments (1) Yields on Debt Investments Early Prepays (1) Weighted Average Portfolio Yield on Debt Investments includes all prepayment income. 35
Slide 36: Financial Highlights
Financial Highlights NII Return on Average Equity (ROAE) and NII Return on Average Assets (ROAA) Leverage Ratio 36
Slide 37: Q2 2021 Income Statement
Q2 2021 Income Statement (1) 3 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Investment Income Interest Income from Investments $19,743 $23,269 $38,933 $43,542 Other Income 579 527 1,362 1,095 Total Investment and Other Income 20,32
Slide 38: Q2 2021 Balance Sheet
Q2 2021 Balance Sheet (1) As of June 30, 2021 As of December 31, 2020 Assets Investments at Fair Value $647,717 $633,779 Cash and Cash Equivalents 33,443 38,219 Restricted Cash – 6,458 Deferred Credit Facility Costs 2,573 3,152 Prepaid Expenses and Other Assets 1,784 1,901 Total Assets $685,517 $683
Slide 39: Disciplined and Diversified Capital Raising Since IPO
Disciplined and Diversified Capital Raising Since IPO Equity Capital Raises (1) Debt Capital Raises (1) (2) Received Investment Grade Rating Private Placement Notes Private 5yr - 4.50% Placement BBB (DBRS) Revolver Revolver Notes Renewal and Renewal and 5yr - 4.50% (4) Retail Notes $200.0 Upsize Ups
Slide 40: Overview of Leverage as of 6/30/2021
Overview of Leverage as of 6/30/2021 SUMMARY OF CREDIT FACILITY Facility Size: $350 million – with an additional $50 million available subject to approval by Lenders Lenders: Deutsche Bank AG (Syndication Agent), KeyBank, TIAA Bank, Union Bank, Hitachi Capital, NBH Bank, Customers Bank and First Fou
Slide 41: Research Coverage
Research Coverage Casey Alexander Devin Ryan Ryan Lynch (646) 452-7083 (212) 906-3578 (314) 342-2918 calexander@compasspointllc.com dryan@jmpsecurities.com lynchr@kbw.com Christopher Nolan Mitchel Penn, CFA Crispin Love (212) 409-2068 (212) 667-7136 (212) 466-7938 cnolan@landenburg.com Mitchel.Penn@
Slide 42: Appendix
Appendix
Slide 43: 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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