Investors looking for a stock that provides large yields from owning venture capital firms should look know further than Hercules Technology Growth Capital (HTGC).
The company invests primarily in senior secured debt with floating
interest rates of venture capital-backed companies in tech-related
markets, including technology, biotechnology, life science, and
cleantech industries at all stages of development.
typically see venture capital firms as raising equity so the concept of
venture debt is unique in the public markets. With the need to raise
more money as companies take longer to exit the venture path via an IPO,
debt is used to lengthen the time before the next equity round and
provides negotiating leverage for higher valuations. Even at average
loan rates of over 14%, the venture firms can increase returns by
avoiding a dilutive VC round as long as possible.
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