Triplepoint Venture Growth Bdc Corp. · NYSE:TPVG
Triplepoint Venture Growth Bdc — Q3 2020 Earnings Presentation
42 slides from Triplepoint Venture Growth Bdc's earnings presentation, Nov 5, 2020
Slide 1: Investor Presentation
Investor Presentation Q u a r t e r E n d e d S e p t e m b e r 3 0 , 2020 N o v e m b e r 5 , 2 02 0 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. Overview
TriplePoint Venture Growth BDC Corp. Overview NII Return (Average Equity & Average Assets) MARKET CAP COMMON STOCK 16.0% 14.9% $348 million TPVG (NYSE) 14.0% 13.6% 12.1% 11.9% 12.0% 12.9% 12.2% 11.5% 11.8% 5.75% NOTES DUE 2022 12.0% 10.2% November 4, 2020 TPVY (NYSE) 10.0% 7.8% 8.0% 9.7% 9.4% 9.0% 8
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
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
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
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
Slide 8: Delivering Results
TriplePoint Venture Growth BDC Corp. Overview DELIVERING RESULTS $3.9 billion of signed non-binding term sheets at TPC (1) DEMONSTRATED $2.6 billion of cumulative originations ORIGINATIONS $1.6 billion of cumulative fundings CAPABILITIES (2) $15.3 million of realized credit losses net of rea
Slide 9: Third Quarter 2020 Highlights
Financial Highlights THIRD QUARTER 2020 HIGHLIGHTS Net investment income (NII) of $12.2 million, or $0.40 per share Net increase in net assets of $14.4 million, or $0.47 per share $4.9 million realized equity gains from the sale of CrowdStrike, Inc. (16,747 shares still held) $1.1 million re
Slide 10: Recent Developments
Financial Highlights RECENT DEVELOPMENTS Since September 30, 2020(1): Portfolio company exit and liquidity events include: Nestle USA announced that it acquired TPVG portfolio company, Freshly Inc.; TPVG portfolio company Hims, Inc. announced plans to go public through a merger with Oaktree Acquis
Slide 11: Quarterly NAV Roll Forward
Financial Results Quarterly NAV Roll Forward $(0.36) $0.40 $0.05 $(0.06) $ 13.28 $0.03 $ 13.17 $0.20 $(0.15) NAV as of Net Investment Dividend to Reversal of Realized Gain Reversal of Realized Loss Other unrealized NAV as of 9/30/20 6/30/2020 Income Shareholders Unrealized Gain unrealized loss chang
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
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
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
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
Slide 16: TriplePoint Capital - Financed 600+ Leading Companies
TriplePoint Capital - Financed 600+ Leading Companies (1) (1) Selected list of current and past TriplePoint Capital customers 16
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
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
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
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
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
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-$25mm 36 – 48 Months Equipment Typically Fin
Slide 23: Time-Tested Investment Process & Portfolio Management
Time-Tested Investment Process & Portfolio Management Benefits From More Than 30 Years of Experience and Expertise INVESTMENT & INVESTMENT ORIGINATIONS LEGAL INVESTMENT PROCESS CREDIT ANALYSIS COMMITTEE Leads and initial Initial screening Transaction presented Transaction screening performed
Slide 24: Strong, Disciplined Portfolio Growth
Strong, Disciplined Portfolio Growth – As of 9/30/20 Signed Term Sheets at TPC; Commitments and Fundings at TPVG ($mm) (1) (1) Signed term sheet amounts not necessarily indicative of opportunities available to TPVG. 24
Slide 25: High Yielding, High Quality Portfolio
High Yielding, High Quality Portfolio (1) $611.1 14.1% $158.2 $20.7 $158.2 $15.1 MILLION(1) YIELD(2) MILLION(2)(1) MILLION MILLION(2)(1) MILLION DEBT PORTFOLIO YIELD PROFILE WARRANT PORTFOLIO EQUITY PORTFOLIO DEBT INVESTMENT FAIR WEIGHTED AVERAGE YIELD WARRANT FAIR VALUE DIRECT EQUITY FAIR VALUE VAL
Slide 26: Portfolio Overview – Secured, Diversified Lending
Portfolio Overview – Secured, Diversified Lending (1) Diversified Across Subsectors of High Secured by Either the Entire Enterprise or Growth Industries Specific Assets (1) Figures based on fair value as of September 30, 2020. 26
Slide 27: Strong Credit Performance and Proactive Monitoring
Strong Credit Performance and Proactive Monitoring (1) Q3 2020 Detailed Credit Ratings(2) Category Fair Value ($mm) % Of Debt Investment # Of Portfolio Companies Clear (1) $101.2 16.6% 8 White (2) $381.7 62.4% 21 Yellow (3) $107.9 17.7% 4 Orange (4) $20.3 3.3% 1 Red (5) - - - $611.1 100.0% 34 (1) De
Slide 28: Active Customers with Debt Outstanding
Active Customers with Debt Outstanding Active Customers with Debt Outstanding 28
Slide 29: Active Customers with Warrants and/or Equity Outstanding
Active Customers with Warrants and/or Equity Outstanding 29
Slide 30: Financial Highlights
Financial Highlights As of September 30, 2020
Slide 31: Key Financial Highlights – 9/30/20
Key Financial Highlights – 9/30/20 Total Investment Income ($mm) Net Investment Income ($mm) Total Investments ($mm) Total Assets ($mm) Note: As of or for the nine months ended September 30, 2020. Total Investments and Total Assets shown on a Fair Value basis. 31
Slide 32: 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 33: 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 fees. 33
Slide 34: Financial Highlights
Financial Highlights NII Return on Average Equity (ROAE) and NII Return on Average Assets (ROAA) Leverage Ratio 34
Slide 35: Q3 2020 Income Statement
Q3 2020 Income Statement (1) 3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended 30-Sept-2020 30-Sept-2019 30-Sept-2020 30-Sept-2019 Investment Income Interest Income from Investments $22,218 $15,434 $65,760 $50,477 Other Income 907 256 2,001 1,645 Total Investment and Other Income 23,125 15
Slide 36: Q3 2020 Balance Sheet
Q3 2020 Balance Sheet (1) As of 30-Sept-2020 As of 31-Dec-2019 Assets Investments at Fair Value $646,813 $653,129 Cash 24,858 20,285 Restricted Cash 836 6,156 Deferred Credit Facility Costs 750 1,603 Prepaid Expenses and Other Assets 2,178 2,975 Total Assets $675,435 $684,148 Liabilities Revolving C
Slide 37: 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
Slide 38: 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-
Slide 39: Research Coverage
Research Coverage Casey Alexander Mitchel Penn (646) 452-7083 (410) 583-5976 calexander@compasspointllc.com mpenn@janney.com Ryan Lynch Analyst TBD (314) 342-2918 lynchr@kbw.com Christopher Nolan Finian O’Shea, CFA (212) 409-2068 (212) 214-5082 cnolan@landenburg.com finian.oshea@wellsfargo.com 39
Slide 40: Appendix
Appendix
Slide 41: 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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