Out Fox The $treet

Small-Cap Insight Investors looking for a stock that provides large yields from investing in venture capital firms should look no further than Hercules Technology Growth Capital ( HTGC ) . Considering the company invests in early stage, venture backed firms; it might surprise the investment community that the company has a limited history of payment defaults. Historically, the net realized loss since inception only represents 1.1% of total commitments or an annualized loss rate of only a low 13 basis points. So if the company has historically lost only $42.8 million on a substantial investment portfolio over 10 years, why has the stock historically paid high dividends? Hercules Technology is a leading specialty finance company that focuses on loaning senior secured debt with floating interest rates to venture capital-backed companies in tech-related markets. The company has a high focus on the biotechnology, life science, and cleantech industries that historically are...

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 ment...

With the recent deal where Hercules Technology Growth Capital ( HTGC ) lent up to $30M to OCZ Technology ( OCZ ) for a load of warrants, investors might be better off investing with the BDC that got the sweet deal. The temptation in this scenario is to buy the low-priced technology stock hoping for a large rebound. With the BDC sector heating up, as investors are attracted to the high yields, Hercules Tech Growth Capital has mostly flown under the radar. The company provides a solid 8% yield while the investment in a public company provides more visibility than the normal unknown private firm. It focuses on providing senior secured loans to venture capital-backed companies in technology-related markets. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details.