IB Net Payout Yields Model

Hercules Technology Warrants More Attention

Small-Cap Insight

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.

Investors 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.

Read the full article at Seeking Alpha.

Disclosure: No positions mentioned. Please review the disclaimer page for more details. 


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