Hercules Capital, Inc. is a business development company. The company offers a range of financial solutions such as venture debt, debt, senior secured loans, and growth capital to privately held venture capital-backed firms across all stages of growth – from startups to expansion, including certain publicly listed companies and specific special opportunity lower middle market companies that require additional funding for acquisitions, recapitalizations, refinancing, as well as established-stage companies. The company offers a variety of growth capital financing options, including capital extension solutions, management buy-out and corporate spin-out financing, financing for company, asset-specific or intellectual property acquisitions, as well as convertible, subordinated, and mezzanine loans. It also provides support for domestic and international corporate expansion, vendor financing, revenue acceleration through sales and marketing development, and manufacturing expansion.
Asset-based financing with a focus on cash flow, accounts receivable facilities, equipment loans or leases, equipment acquisition, facilities build-out and/or expansion, working capital revolving lines of credit, and inventory are also part of the company’s services. Additionally, the firm offers bridge financing for IPOs or mergers and acquisitions, technology acquisition, dividend recapitalizations, and other sources of investor liquidity, cash flow financing to protect against share price volatility, competitor acquisition, pre-IPO financing for extra cash on the balance sheet, public company financing to continue asset growth and production capacity, short-term bridge financing, and strategic and intellectual property acquisition financings. The company also specializes in customized financing solutions and provides financing options for emerging growth, mid-venture, and late-venture stages. The company’s primary investment focus is on structured debt with warrants, as well as senior debt and equity investments to a lesser extent. Their investment criteria typically involves companies that have been in operation for at least six to twelve months prior to the investment date.
as of March 7, 2023
Hercules Capital could very well be one of the most interesting BDC’s out there. It’s like buying into a VC fund as an individual investor whether or not you’re accredited. Doing it mainly for the 10% dividend, but the company has also grown its revenue and operating profit throughout the last decade. The problem is that growth hasn’t translated to book value growth at all. Again, you buy this for the yield.
