Palo Alto, CA, based Hercules Technology Growth Capital Inc. (HTGC) is a specialty finance company providing venture financing for all stages of development to privately held companies and to select publicly traded companies. Inclined towards technology and life sciences related companies, HTGC typically invests in the range of $1 million to $25 million. The company offers senior and subordinated working capital loans, senior revolving loans, bridge loans and equipment loans, as well as direct equity investment. At the end of 3Q07, HTGC had 21.2% of its portfolio investments in the communication and networking industry and another 21.7% in drug discovery industry, the other three top sectors being Software (8.8% of the total portfolio), Specialty pharmaceuticals (8.6%) and Electronics and computer hardware (7.8%). HTGC's principal office is located in Silicon Valley and the other offices are in Boston, Boulder, Chicago and Los Angeles. HTGC was founded in December 2003, and commenced its investment operations in September 2004.
HTGC is structured as an internally managed, non-diversified closed-end management investment company (a closed-end fund), regulated as a Business Development Company (BDC) under the Investment Company Act of 1940. It is treated as a Regulated Investment Company (RIC) for income tax purposes (effective January 2006). As a BDC, it is required to invest at least 70% of its assets in private or thinly traded public companies. To maintain its RIC status, HTGC must distribute the vast majority of its investment company income, meaning that the firm must rely significantly on outside funding for growth, rather than internal capital generation. As of September 30, 2007, HTGC had net investments of approximately $416 million in 75 portfolio companies, total assets of $446 million, and net assets of $390 million ($11.97 net asset value per share).