GSV Capital's CEO Discusses Q2 2012 Results - Earnings Call Transcript

GSV Capital Corp. (GSVC)

Q2 2012 Earnings Call

August 9, 2012; 05:00 pm ET

Executives

Michael Moe - Founder & Chief Executive Officer

Stephen Bard - Chief Financial Officer

Alex Wellins - Blueshirt Group, Investor Relations

Analysts

John Stockbridge - Private Investor

John Hickman - Ladenburg Thalmann

Ed Woo - Ascendiant Capital

Tony Polak - Maxim Group

Danilo Kawasaki - Gerber Kawasaki Wealth Management

Donald Elliot - Private Investor

William Corley - 22nd Century

Presentation

Operator

Welcome to the GSV Capital second quarter 2012 conference call. During today’s presentation all participants will be in a listen-only mode. Following the presentation, the conference will be open to questions. (Operator Instructions).

I would like to turn the conference over to Mr. Alex Wellins of Blueshirt Group. Please go ahead.

Alex Wellins

Thank you and thanks for joining us on today’s call. I’m joined today by Michael Moe, GSV’s Founder and CEO; and Stephen Bard, the company’s Chief Financial Officer.

Today’s call and webcast are being recorded. An audio replay of the conference call will be available for seven days. The webcast can be found on our website at www.gsvcap.com. Replay information is included in our press release that was released after the market closed today. Please note that this call is property of GSV Capital. Any unauthorized re-broadcast of this call in any form is strictly prohibited.

I also like to call your attention to the customary disclosure on our press release today regarding forward-looking information. The statements made in today’s conference call and webcast may constitute forward-looking statements, which relate to future events or our future performance or financial condition.

These statements are not guarantees of our future performance, condition or results and involve a number of risk and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time-to-time in our filings with the SEC.

We do not undertake to update our forward-looking statements unless required to do so by law. To obtain copies of our latest SEC filings, please visit the IR section of our website.

With that said, I’ll turn the call over to Michael Moe. Michael.

Michael Moe

Thanks Alex and good afternoon, thanks for joining us today and we appreciate your interest. Over the past quarter and last 15 months as gone public, we have executed against the strategy we laid out for investors. We built a diversified portfolio of now 40 of the leading fastest growing top venture backed companies across five focus areas of investment. We believe that many of these game-changing companies is the potential to drive outsourced size growth and significant shareholder value in the years ahead.

I’ll start out with a quick summary, a snapshot of the state as of June 30 , 2012. First, the total value of GSVs portfolio investments was $171.6 million. The net asset value, NAV of the fund is $13.81 per share and we ended the quarter with $96 million in cash and money market funds.

As of today, our five largest positions in the portfolio are as follows: Twitter, where we’ve invested $32.7 million and are representing 12% of the overall portfolio; Palantir which is a position that we’ve expanded significantly in the past quarter and then since the quarter end where we have $20.6 million invested, which is approximate 7.6% of the portfolio; Violin Memory where we have $14.8 million invested, representing 5.6% of the portfolio; Chegg, who have invested $14 million, representing 5.3% of the portfolio; Dropbox, who has invested to-date $12 million, representing $4.9 million of the portfolio.

We also made new investments in leading companies such as Solexel, which is a prior Perkins backed solar company which we participated in the financings of the recently completed. We put $10 million into Solexel. Just the quick highlight on the company is it really is potentially extremely disruptive in the alternative energy space, with both high efficacy and lower cost. Basically we think it could be a huge, huge win for us.

Spotify, a leaders in the social music area, this is the company that we’ve had our sight set on for some time, yet we are able to acquire this year’s at a price that we thought was very attractive and get approved by the company and so we are delighted to be on Spotify’s cap table.

In addition we added a new position in Avenues: The World School, which has gained quite a bit of attention towards opening its new campus in New York City, creating a global network of private schools with a top tier focus with the former President of Yale University, former Head of Exeter, Phillips Exeter, Head of Hotchkiss and for people in New York City, you’ll appreciate this, the former head of the 92 nd streetwise for the preschool program.

Additionally we made a $10 million investment in Tutor. Tutor is a rapidly growing company that partners with Universities such as USC and Georgetown to create online programs, but also just kind of an interesting company, to make note, Dataminer, which we were introduce to from twitter. Which they use twitter’s firehouse to provide real time information, primarily being used by trainers today, but a significant advantage to other sources of that information and we made a small investment. Dataminer, we’re thinking of this huge potential that shows sort of the power of the network.

In addition, as we said we are going to do and we’ve done repeatedly, as we’ve added to core positions and we did in the core, including Bloom Energy, which is doing extraordinarily well and we continue to add to that position at prices that we think are attractive to both fair value and where recent financings have been done. We continue to look to add significantly to our drop box position. As we mentioned that it’s now our fifth largest position, but we continue to actively look to increase that.

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