TriplePoint Venture Growth BDC Corp.

Good afternoon, ladies and gentlemen. Welcome to the Triple Point Venture Growth BDC Corp. Third Quarter 2021 Earnings Conference Call. At this time, all lines have been placed in a listen-only mode. After the speaker's remarks, there will be an opportunity to ask questions, and instructions will follow at that time. This conference is being recorded, and a replay of the call will be available in an audio webcast on the Triple Point Venture Growth website. Company management is pleased to share with you the company's results for the third quarter 2021. Today, representing the company is Jim Labe, Executive Officer and Chairman of the Board, Sajal Srivastava, President and Chief Investment Officer, and Chris Matthew, Chief Financial Officer. Before I turn the call over to Mr. Labe, I'd like to direct your attention to the customary safe harbor disclosure in the company's press release regarding forward-looking statements. and remind you that during this call, management will make certain statements that relates to the future events or the company's future performance or financial condition, which are considered forward-looking statements under federal securities law. You are asked to refer to the company's most recent filings with the Securities and Exchange Commission for important factors that could cause actual results to differ materially from these statements. The company does not undertake any obligation to update any forward-looking statements or projections Thank you, operator. Good afternoon, everyone.

We're glad you could all join TPVG's third quarter conference call today. The quarter was one of continued growth and execution of the 2021 playbook we have outlined on our earnings calls. This year has unfolded as expected, on track for a stronger second half and a promising and exciting outlook for 2022. The quarter's performance continues to demonstrate the potential of TPVG's differentiated venture lending model and investment strategy. We are encouraged by the quarterly trends in our playbook that started earlier this year, and our expectation is to continue on this path in the quarters ahead. Notably, we grew the investment portfolio to a record $767 million. and we significantly increased net asset value, achieving the highest quarterly NAV per share accretion since our IPO. Our NAV, which reflects a 10 cent per share special dividend we paid last year, is up 58 cents from the December 31, 2019 pre-pandemic level and $1.07 since the start of the pandemic in Q1, 2020. Signed term sheets in the quarter at TPC for venture growth stage companies increased by more than 20% over the previous quarter, representing the second highest level since TPVG's IPO. This is the sixth consecutive quarter of increased signed term sheets. This level of origination bodes well for future debt commitments in the fourth quarter and beyond. New customer debt fundings were up more than 54% for the quarter. At $117 million, funding fell squarely in our forecasted range and represented the third highest quarterly total since our IPO. During the quarter, we also increased our leverage ratio, continued to diversify our portfolio, and strengthened the portfolio's credit quality as measured by our quarterly scoring system. 98% of our debt investments were performing at or better than expectation as of quarter's end. This underscores the benefit of our strategy of focusing on high-quality, select-back, venture growth stage companies and technology-driven categories. The increase in NAV this quarter shows the power of our model, with a considerable upside potential built into the portfolio from the warrant and equity kickers that we negotiate as part of our debt transactions, demonstrating TPVG's strong potential to create long-term shareholder value. Among the most significant contributors to increasing NAV is the continued equity fundraising rounds closed by our portfolio companies, which increases the overall enterprise value of our investments. This quarter, the most notable was Revolut's equity financing round. We're proud to be part of a company with the highest valuation ever achieved at a privately held venture-backed technology company in the United Kingdom. Exit events at our portfolio companies also remain welcome contributors to our NAV. We continue to experience and expect increased exit activity in our portfolio, all translating into future realized capital gains for shareholders. Fords rock. and Next Generation Cloud Security Company completed its IPO during the quarter. Toast, a management platform for the restaurant industry, also completed its IPO during the quarter. And Rent the Runway, a popular fashion platform, completed its IPO subsequent to the quarter. SPAC mergers continue to provide another avenue for exits, including Nerdy completing theirs last quarter, Enjoy Technologies in October, and four others now on track to complete SPAC mergers in the quarters ahead. Finally, as a reminder, mergers and acquisitions of portfolio companies also represent potential future capital gain contributors. During the quarter, portfolio company ClassPass was acquired by MindBody in a private transaction, and we foresee a positive outlook for the combined entities. The venture capital market continues to be remarkably strong. Year-to-date through the third quarter, total deal value is already 43% higher than in all of 2020. VC investments in the consumer tech, enterprise tech, and fintech categories have respectively surpassed last year's totals already by 38%, 50%, and 92%. Demand remains high, of course, for IPOs by VC-backed companies. Total exit value was on pace to double last year's record total. Public offerings accounted for 88% of all exit value year-to-date. To further capitalize on this incredibly healthy VC market, we believe we have the right team, model, select VC partners, and investment strategy. We continue to stick to our knitting and exercise investment disciplines, focusing on companies backed by our select group of leading venture capital firms and not growing simply for the sake of growth. We continue to have our eyes on companies with strong growth prospects that are developing new technologies, redefining how we live, work, and play. TPVG investments in the technology sector are on pace to comfortably surpass last year's total. And we are well positioned to generate strong returns for shareholders, continue to grow our NAV, and produce an AI that covers the distribution over the long term. We believe TPVG is well positioned for the remainder of this year in the long term. The momentum is already continuing here in the fourth quarter. We're off to a really good start with a robust pipeline and strong liquidity, which positions us to continue to grow the portfolio and provide financing to companies that meet our highly selective criteria and requirements. A great deal of the playbook we planned earlier in the year is coming to fruition, and central to our game plan is continuing to execute on it for the benefit of our shareholders. With that, I'll now turn the call over to Sajal.

Thank you, Jim, and good afternoon. As Jim mentioned, we achieved the objectives we identified for the third quarter and remain well positioned for the remainder of the year and for 2022. With regards to investment activity during the quarter, Turtle Point Capital signed $304 million of term sheets with venture growth stage companies, and we closed $116 million of debt commitments to seven companies at TPVG. We continue to partner with exciting and promising companies and our new portfolio companies this quarter include some marquee names in the FinTech, consumer and e-commerce ecosystems, such as N26, a mobile banking company, Earnin, a financial platform that enables users to take control of their financial future, Good Eggs, an online grocery and meal kit company, and Forum Brands, a data-driven Amazon business acquisition platform. We also welcome back FabFitFun, a women's lifestyle and shopping experience focused company, which had previously paid us off in 2020 after closing an equity round and has now returned to the portfolio. During the third quarter, we added to both our warrant and equity portfolios. We received warrants in 10 portfolio companies valued at 1.7 million in conjunction with our debt commitments, increasing our year-to-date total of warrants in 27 portfolio companies received in conjunction with our debt commitments worth $5.5 million. We also made six direct equity investments valued at $1.2 million, reflecting the access we have to high-quality investment opportunities and the robust equity environment. This brings our total to $3.7 million of direct equity investments in 11 companies year to date. During the third quarter, we hit our targeted range of gross fundings for the quarter with $117 million of debt investments funded to 15 companies, which represented an increase of more than 50% from our fundings in Q2. All new debt commitments made during the quarter had all or a portion funded in Q3, and 95% of the new commitments we've made in 2021 have been fully or partially funded year-to-date. As a result of this strong funding activity, as of the end of the third quarter, we had debt investments outstanding to 40 companies, an increase of almost 20% from 34 companies at the end of the prior quarter. So far, we have funded 14 million of new loans here in the fourth quarter, and our gross funding target range continues to be 100 to 150 million for the fourth quarter. Portfolio yield remains strong. During the quarter, debt investments funded carried a weighted average annualized portfolio yield of 12.8%. Our core portfolio yield was 12.1%, up slightly from 12% last quarter and 11.9% in Q1. Our overall weighted average annualized portfolio yield was 12.3% as a result of only 18 million of loan prepayments during the quarter. So far in the fourth quarter, We've had a $28 million loan prepayment, which will generate approximately $1 million from the accelerated end-of-term payment. We continue to see substantial equity fundraising activity in the venture capital industry generally and within our portfolio specifically, which is a testament to our portfolio's quality. During the third quarter, eight portfolio companies raised approximately $1.8 billion of capital in addition to the 16 portfolio companies that have raised $1.6 billion of capital during the first half of 2021. One financing to highlight is Revolut whose $800 million raise at a $32 billion valuation resulted in an increase of $13 million in unrealized gains for us this quarter. Our equity and warrant investments in Revolut are now valued at $15 million in total fair value. Moving to credit quality, this quarter we achieved one of our highest quarterly credit quality rankings. The weighted average investment ranking of our debt investment portfolio improved to 1.94 compared to 2.06 as of the end of Q2 and 2.11 as the end of Q1. Consistent with the first half of the year, no companies were added to categories three, four, or five, and no companies were placed on non-accrual during the quarter. During the quarter, one company was upgraded from category two to category one, and our one remaining category three company from Q2 was upgraded to category two. Our one category four portfolio company, Roli, is our only loan on non-accrual and represents 2.2% of our total debt investments at fair value. During the quarter, we successfully worked with the team at Roli to secure financing from a new lead venture capital fund and in conjunction with this VC investor, put the company through an administration process where by the newly emerged company called Luminary has assumed all of our outstanding debt. We have also received equity ownership in Luminary as well. Although our loan was assumed in full, including full end of term payments and accrued interest, based on these events, we recorded an 8 million unrealized loss against our prior loan fair values during the quarter. While the company is not out of the woods, We believe they are now in the best position they have been in some time to capitalize on their Peloton for piano hardware and software offering. During the quarter, two portfolio companies successfully completed IPOs, ForgeRock and Toast. Since beginning our partnership with ForgeRock in 2016, TPVG has lent the company $45 million, of which $30 million is still outstanding, and our warrants in the company were valued at $9.4 million at the end of the quarter, resulting in an $8.2 million unrealized gain during Q3. Our initial $35 million loan commitment to Toast was made in 2018 and the fair value of our warrants was $5.1 million as of the end of the quarter resulting in a $4.7 million unrealized gain even though Toast never drew on their deadline and their unfunded commitment expired unused. With regards to SPACs, Nerdy completed their SPAC merger in Q3, and we received a $1 million cash success fee as a result. TransFix announced their SPAC merger during the quarter, and they, along with Bird Rides, Inspirato, and Sonder, represent our four announced company SPAC mergers in process. So far in Q4, Rent the Runway completed their IPO, and Enjoy completed their SPAC merger. As of quarter's end, We are holding shares and warrants in publicly traded companies valued at $17 million, which includes $13.5 million of cumulative unrealized gains. In addition, the current private warrant and equity portfolio held by TPVG has a record $30 million of cumulative unrealized gains based on private round valuations as of Q3. As CrowdStrike, ForgeRock, Toast, Farfetch, and others have proven when exit events do occur, there is the potential for even more gain from the winners above our balance sheet value. We continue to be heads down, focused on growing our portfolio in a disciplined manner with line of sight to covering our dividend without the benefit of prepays, maintaining our solid credit profile, growing NAV, and working with some of the most exciting venture growth stage companies backed by some of the industry's best venture capital funds. We're optimistic for a strong finish here in 2021 and excited for what's in store for TPBG in 2022. With that, I will now turn the call over to Chris.