So top of the funnel, significantly increased quality of deals. Now certainly, there’s some quality of deals that’s less attractive that we’re filtering out as well, but we are also seeing as well, but we are also seeing a lot of really mature companies further down the road. Average deal size increased 20% last year for us. So it just kind of it reflects we also saw significantly more first lien and majority of our portfolio is first lien, but we are seeing less kind of second lien type opportunities, which just shows you companies are looking for a different type of solution and alternative type solution to the banks. So we feel good about where we’re positioned there. Pipeline is robust and we’re being proactive and we’re being opportunistic on what we fund.
Michael Testa: Yes. And I would add that we do remain committed to our portfolio granularity. It’s something either U.S. talk a lot about quarter-on-quarter, right? And that we want to be very granular across industry and across financing size among other things. And so that’s why we felt it was important to clarify the position on Rocket Lab, right, to reassure our investors that we are committed to that level of granularity.
Kyle Brown: Yes. The off balance sheet vehicles will continue to give us the ability to yes, grow, check size of course, but a lot of that’s just making sure we’re the incumbent lender. When our companies do really well, we want to keep them. We don’t want to lose them to somebody else who want the ability to fund them and keep funding them into the future and continue to help the companies grow. And so I think you’ll see our off balance sheet vehicles give us the ability to do that and then also enter like this enter into new transactions at a higher price point while not risking and putting too much capital into any one deal of trend.
Bryce Rowe: And maybe a related question. I would imagine with the funding profile, your record fundings here in 2023, it sounds like your pipeline is really strong. There was some question about kind of liquidity and how you think about your liquidity at this point, but maybe give us an idea of how you’re thinking about funding it. I mean, obviously, you have the ATM that’s up and running and available with a premium price to NAV. But just kind of curious how you think about the debt side of the equation, whether it’d be the secured facility expanding that or trying to get more active with the unsecured notes market?
Kyle Brown: Yes, I mean, look, it’s going to be a combination of all those things, right? On the debt side, we’re making sure that we’ve got unsecured and secured financing, we’re making sure it’s tuned out. We are making sure that we raise equity most efficiently. We have really ample liquidity right now on and off balance sheet. As we’ve indicated, we are raising additional capital off balance sheet to even bolster that liquidity further. We’re charging management fees and incentive fees on that capital, which will 100% of that is owned by our shareholders and trend. So we have and we’re creating as many options as possible to give ourselves liquidity to put ourselves in a position to be opportunistic and grow this platform in a way that’s beneficial for our shareholders. We’re really focused on that.
Operator: We’ll return now to Vilas Abraham with UBS.
Vilas Abraham: I just wanted to ask if there were any updates on timing, specifically on the RIA side of things that you’re able to share.
Kyle Brown: We can’t give you timing on exactly how the capital is going to be rolled out, how much of it and when. Our expectation and guidance has been that we’ll start deploying in Q2 and that hasn’t changed.
Vilas Abraham: And then just maybe one last kind of bigger picture question. You mentioned life sciences 14% of the book as of 1,231. Just how are you thinking about that particular vertical longer term? I guess, the attractiveness of deploying there now and just longer term, the concentration that that could get to and, yes, just any color there would be helpful?
Kyle Brown: We are really excited about our life science and healthcare business. We see incredible opportunities to grow there. Seeing significant equity dollars flow back into that industry. If you think about big picture, what we’re doing here and I mentioned the different verticals, we really want to see these very complementary verticals continue to grow. From an asset management standpoint, we’re really able to diversify our assets so that we’re not a bank goes out of business or there’s volatility in one sector, it’s not going to have a massive impact on our overall business. And so we’re really focused on diversifying into these different verticals and growing each of them respectively. And so you’ll continue seeing life science build. You’ll see some of that exposure or overall percentage probably grow as we build that business and you’ll see further diversification across the platform into these complementary verticals.
Operator: We’ll go next to Casey Alexander with Compass Point.
Casey Alexander: You mentioned that second lien is a shrinking part of your portfolio, but still 23% of your portfolio, if I read the release right, which is still one of the higher amounts in the venture debt space. So I’m curious how that splits between secured lending and equipment finance and sort of what’s the typical kind of structure that has you end up in the second lien position and makes you feel comfortable there?
Kyle Brown: Yes. Gerry and I will just ping pong on this one a little bit. So Casey, the way we think about second lien deals, these are going to be some of our stronger transactions. None of those are equivalent financing. So those are all secured loans, term loans. They’re all the tech lending vertical. And typically that’s just partnering with the bank. They may be providing receivable financing and the overall cost of capital is lower. It provides more runway for the company. And we are typically going into those because they’re just very strong deals where a bank is willing and able some of the capital. And so we generally go into those deals with the mindset that we’re willing to do the whole thing. And if it came down to it, we can pay off the bank.
That’s just our that’s how we look at it. But having a bank in there, partnering with the bank and providing a lower cost of capital, it’s just overall better for the company. And so it’s a way that we partner and do business with the banks and it’s also a way to benefit the company by extending the runway further.
Casey Alexander: Do you have the right to buy the bank out of their position?
Michael Testa: Generally, we do. And I would say our working relationships with the bank is such that even if that was not explicitly in the docs, I would expect that to be an option that they would gladly take up, but typically that is included in our docs.
Operator: And that will conclude today’s question-and-answer session. At this time, I’d like to turn the call back over to Kyle Brown, Chief Executive Officer for any closing or additional remarks.
Kyle Brown : Thanks, Jamie. We’re proud of our 2023 results and feel like we’ve laid the groundwork over the last 18 months to scale this business in a unique and profitable way for investors. Lastly, our management team will be in New York and Boston later this month and we look forward to meeting with any investors and key stakeholders. Please don’t hesitate to reach out to Ben at this digital meeting. We’d like to thank everybody for joining and participating in our call today. We appreciate your interest and investment in Trinity Capital. Have a great rest of your day. Thanks. Bye.
Operator: Once again, ladies and gentlemen, that does conclude today’s program. Thank you for your participation. You may disconnect at this time.
