SuRo Capital Corp (SSSS) 2012 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the GSV Capital Fourth Quarter and Fiscal Year 2012 Conference Call. During today's presentation all participants will be in a listen-only mode. Following the presentation, the conference will be open for questions, and instructions will be given at that time.

(Operator Instructions)

Today's conference is being recorded, Tuesday, March 12, 2013. At this time I would like to turn the conference over to Tricia Ross with Financial Profiles. Please go ahead, ma'am.

Thank you for joining us on today's call. I'm joined today by Michael Moe, GSV's Founder and CEO; Dave Crowder, Executive Vice President; and Steve Bard, the company's Chief Financial Officer.

Today's call is being recorded and webcast on www.gsvcap.com. Replay information is included in our press release that was issued today. Please note that this call is the property of GSV Capital Corp. Any unauthorized rebroadcast of this call in any form is strictly prohibited.

I'd also like to call your attention to customary disclosure in our press release today regarding forward-looking information. Statements made in today's conference call and webcast may constitute forward-looking statements, which relate to future events, or future performance, or financial condition. These statements are not guarantees of our future performance, condition, or results, and involved a number of risks 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 the Company's filings with the SEC. Management does not undertake to update such forward-looking statements, unless required to do so by law. To obtain copies of GSV Capital's latest SEC filings, please visit the website at gsvcap.com.

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

Thanks, Tricia. Good afternoon everybody. I'm going to begin today with a review of our portfolio as of December 31, 2012. As most of you know, our investment philosophy is based on studying the intersection of megatrends across the growth sector's of the economy to identify game-changing businesses with disruptive, innovative technologies and services.

We primarily invest across 5 themes -- social mobile, which is currently 25% of our portfolio; cloud computing and big data, which is 28%; internet commerce, 7%; green technology, 9%; and education technology, which is 31% of investments at year end.

We now have 47 companies in our portfolio that represent transformative businesses, which we believe have outsize growth potential. The fair value of the portfolio was $226.4 million at December 31, and we also have cash and short-term investments of $27.3 million. That equates to an NAV at the end of December of $13.07.

At December 31, our top 10 investments represented approximately 60% of net asset value, and the top 4 investments, Twitter, Palantir Technologies, Violin Memory, and Dropbox represent approximately 34% of net asset value. Twitter is our largest investment by a wide margin at about 14% of deployed capital, and had a fair value of $36.1 million.

I emphasize the point that our focus is identifying hyper-growth businesses, because it's our experience that over time equity value is highly correlated to revenue and earnings growth. By looking for the right type of companies, our emphasis is on long-term value creation, and the potential for sizable returns. Indicative of the types of investments we select, the majority of our top 10 companies achieved estimated revenue growth in 2012 of over 100%, and we estimate that our overall portfolio had revenue growth of approximately 80%.

We believe the outlook for many of our top holdings is very strong, and exits look promising, both through IPOs, as well as merger and acquisition activity. As the technology sector continues to experience massive consolidation, we're at a favorable position by owning many of the industry's leaders. All this bodes well for long-term value creation of our portfolio.

During the fourth quarter, we made initial investments in a handful of new companies. Parchments is an education technology company that is run by a former CEO of Blackboard, Matt Pittinsky. It's a software-as-a-service platform for conventional management. Effectively, what the opportunity here is to create a New York Stock Exchange for knowledge, which we think is very exciting.

YourOffers operates a personalized marketing and payments platform for retailers. S3 Digital Corp. is a sports analytics company, and Ozy Media is a social media space with investors, along with us, including Ron Conway, and Laurene Jobs. We also made follow-on investments, adding to core positions in Palantir Technologies, Control4, Grockit, SugarCRM, and Whittle Schools. Whittle Schools is effectively a derivative of Avenues - The World School, which is a top 10 investment of ours.

Let me talk about a few of the companies from a standpoint of our initial investment to where they are today. We think these are examples that support our investment thesis, and are good examples of the value creation in that we believe is occurring in the portfolio.

Let's start with Twitter, which is our largest position. When we first invested in Twitter back in May of 2011, Twitter had 200 million registered users. Now it has over 500 million with over 450 million tweets per day. There's excellent growth potential here, increasing the share of global population, and gaining access to mobile devices.

Currently, there's roughly 1 billion smartphones in the world with 6 million mobile -- 6 billion mobile phones. There's tremendous growth ahead, both as the mobile phone population converts to smartphones, and Twitter is the leader in real-time search in this new medium. We also believe that the opportunity for targeted advertising and data analytics should open up new revenue streams over the near term.

Second position, big data company, Violin Memory represents 5.8% of our portfolio, At the time of our first investments in April 2012, Violin was already the storage solution of choice for names like Cisco, Dell, Fujitsu, HP, IBM, Oracle, SP -- SAP, Microsoft, and VMware. In October 2012, Violin Memory partnered with Cisco and Oracle to achieve the most efficient 2-processor performance record in world history.

Cloud-based storage via Dropbox represents 5.7% of our investments. We initially invested in it in November of 2011, when Dropbox had 50 million registered users. It now has well over 100 million registered users, and users upload 1 billion files every 48 hours. Dropbox is a very powerful platform. It is disrupting the file storage space with it's superior best-in-class solution.

We first invested in education tech company, Kno, in May of 2011, because we felt it had the potential to be a major player in disrupting the $10 billion textbook industry through its digital offering, and also its social integration. Kno digitized textbooks, and creates social learning communities, and it has additional revenue streams in tutoring assessment and content. Kno has since announced partnerships with McGraw Hill, Houghton Mifflin, the two leading educational textbook creators.

A couple other education investments that we've made that are in our top 10, 2U, formerly known as Tutor, is experiencing rapid growth with the reoccurring revenue business model, where partners with leading universities like USC, North Carolina, Georgetown to create online accredited courses. Additionally, just announced Semester Online, which we think could be totally disruptive, creating a consortium of leading undergraduate schools that will let students take classes from any one of them, and get credit if they are taking a semester abroad, or if they just want to supplement classes that they're taking at their current university.

Another education business that we're very, very excited about is Avenues - The World School, which is creating a global network of elite K through 12 schools. The first opened up in New York City this fall to enormous success. They have the most famous kindergartner in the world in their school, Suri Cruise, Tom Cruise's daughter. But they're now opening campuses in Beijing, Sao Paulo, London, and again, we think the market demand for this is tremendous. The former president of Yale University, former head of Phillips Exeter, and Hotchkiss, all on the management team here.

These are just a few examples of our top 10 positions, and what's going on in the portfolio, but we have other great names that are making headlines with their achievements, companies like Spotify, who helps fight music piracy, and is a key reason that music sales in 2012 grew for the first time in this century. Today, Spotify has 24 million monthly active users, 6 million subscribers. So 25% of their users are subscribers, which is an enormous number, and shows the power of that model. We're very excited about our Spotify investment.

Additionally, just to make note of a company we invested in called Data Miner based in New York City. We were introduced to the company by Twitter, who was very impressed by how they are using the Twitter firehose to use real-time analytics that helps traders, helps government officials, and so forth. It's a very exciting business.

The third company I'll make mention of, and we're very excited about this, and we think confirmation about both our thesis of the private marketplace and our role in it. SharesPost announced last week a joint venture with NASDAQ, creating the NASDAQ private marketplace, which we think is strong evidence of the secular trend that we're seeing with private companies staying private longer, and we think increased activity from traditional public investors in the space, which we think bodes well for a number of our portfolio companies, and the development of this market where GSV is a leader. So, again, we're very excited about that.

Going to just some of the numbers. Net assets totaled $252.6 million, or $13.07 per share, net asset value, as of December 31, 2012. This is down approximately 2.8% from the previous period. Of this decrease, approximately $0.22, or 60% of the decrease, was due to the write down in our investment in Top Hat.

So, looking ahead, our portfolio is well-positioned, and comprised of all very high conviction names that we think could be, what we refer to, are the stars of tomorrow in the growth economy. Right now, valuations for many leading growth companies are compelling on an absolute and relative basis, as compared to bonds, for sure. We believe this is a good environment for long-term potential for great growth companies, and we're confident about the next few quarters. And the companies in our portfolio continue to create value by innovating and advancing their business strategies.

Moreover, looking at the IPO market, which is clearly something that there's -- a healthy IPO market is very beneficial for us. While IPO activity has been kind of consistent with what we've seen over the past decade, 16 IPOs so far this year. What's encouraging is, of these IPOs, 50% priced within their range, 38% above the range, and the first day pop is 16%. These are much better numbers than what we've seen for some time, and we think that will be encouraging to many of the great companies that we've invested in looking at the IPO market, and wondering if it's safe to put their toe in the water.

We think that is a very healthy, and good data to provide that type of incentive. And also, corporations with $2 trillion in cash, and a very low interest rate environment, increasingly you've seen them get active on the M&A front. Again, we own leading names, and we think that's going to be a good catalyst for our portfolio.

So, thanks for your attention. I'll ask Steve to make some final comments on our financials, then open up the call for questions. Steve.

Thanks, Michael. As of December 31, the total value of our portfolio of investments was $225.4 million. Net assets as of 12-31 were $252.6 million, which included cash and money market securities of $27.3 million. And as Michael said, that translates to an NAV per share of $13.70 (sic - $13.07, see press release), which compares to net assets of $259.9 million, or $13.45 per share as of September 30.

During the fourth quarter, we invested $9.8 million in four new portfolio companies, Parchment, S3, Ozy, and YourOffers. That is exclusive of transaction costs. We've also made follow-on investment totaling approximately $2.7 million in existing portfolio companies.

Since inception, we've invested approximately $236.5 million in 47 different companies. Again, this excludes transaction costs. It represents about 85% of the net proceeds from our IPO, and our subsequent follow-ons.

Net investment loss for the fourth quarter was $2.8 million, or $0.14 per share. It compares to a net investment loss of $2.3 million, or $0.12 per share for the third quarter of 2012.

The net change in unrealized depreciation, which is comprise of transaction costs, finders' fees, legal expenses, escrow fees, and most importantly, any fair value adjustments, markups, and markdowns, was approximately $4.5 million, or $0.23 per share for the quarter. And that compares to $4.7 million, or $0.24 per share of unrealized depreciation for the third quarter.

The result was a net decrease in net assets resulting from operations of $7.3 million, or $0.38 per share, again, compared to the net decrease in net assets from operations of about $7 million, or $0.36 per share for the third quarter.

For the year, for the twelve months ended December 31, net investment loss was $8.3 million, or $0.51 per share, and that resulted primarily from operating expenses incurred during the year. This compares to net investment loss of $2 million, or $0.60 per share for the period from inception, which was January 6, 2011 through December 31, 2011.

For the year ended December 31, 2012, we had a net change in unrealized depreciation of $10.2 million, or $0.63 per share, and this changed in unrealized depreciation is primarily a result of our investments in Facebook, Gilt Group, Zynga -- I'm sorry, Facebook, Gilt Groupe, Silver Spring Networks, Top Hat, and Zynga.

We had net realized loss of $1.4 million, or $0.09 per share, resulting primarily from the investment in the PJV Fund, which was a derivative investment in Zynga. The net change in unrealized depreciation was $1.6 million, or $0.47 per share for 2011.

The net decrease in net assets resulting from operations was $19.8 million, or $1.23 per share for 2012, compared to a net decrease in net assets resulting from operations of $3.6 million, or $1.07 per share for 2011.

With that, I'll turn the call back over to the Operator to start the q and a session. Operator.

Actually, Steve, I've got a couple closing comments. And one, just want to make investors and shareholders aware in our effort to continue to enhance our governance, and the way that we run GSV Capital. We've brought on Cathy Friedman as a new board member. Cathy has a very distinguished career as an investment banker at Morgan Stanley for 25 plus years, which she retired from several years back, sits on other boards in Silicon Valley, and we're delighted to have her on the board providing us great counsel.

This is in addition to Bill Campbell, who we brought in last quarter, who again is somebody who is extraordinarily well-respected in business in Silicon Valley, and again, we've done this all with the eye on how we continue to get better in what we do, and do best for our shareholders.

Lastly, I'd like to thank all you for participating on our call, and your interest in GSV Capital. And want to also let you know, we are going to be getting more visible in the conference circuit, because we think it's important to tell the story, and what's going on under the hood of GSV Capital. So tomorrow, I'll be at the Piper Jaffray Conference presenting. New week, I'll be at the Roth Capital Conference in Dana Point. And we hope to see you there. And please feel free to reach out if anybody has any questions, as we'd be delighted to answer any of those, in addition to what we receive on the call this evening.

So with that, I'd like to turn it over to the Operator to look for questions. Thank you.

Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. (Operator Instructions). Our first question is from Ed Woo with Ascendiant Capital. Please go ahead.

Yes, I had a question in terms of the cash balance that you guys have. What comfortable cash level do you see yourself reaching, and do you feel that you have enough to continue making investments for the near term?

Sure. We have a relatively detailed analysis, not only look at the cash that we have on hand, which as we said was $27.3 million, but also was have positions, like Facebook, which we could liquidate when we feel it's appropriate. And we also have calculations on the whole portfolio of what we know, and what we anticipate in terms of liquidity.

So, as we look out both in the short term and the intermediate term, we see cash -- we see appropriate cash to allow us to continue to do what we've been doing, which is primarily the cash that we're using is to build on core positions, like we did in the fourth quarter with Palantir and Control4, and Grockit, SugarCRM. Effectively, our philosophy is feeding our winners, right. And that we believe we can continue to do, and we're comfortable with where we're at.

Great. If I have a follow-up question, do you feel that you're reaching close to the capacity with the number of companies you want to be invested in at 47?

Yes, that's a good question. I think the 47 number is a little bit misleading in that, if you look as we said, at the top 10 positions, it's over 60% of the portfolio. If you look at the top 20, you get to 80% plus.

What you will see us do, and again this is something that we're evolving from, is that we've got -- the best strategy for us was to have about 90% of the portfolio in, what I'd call, emerging growth names, above $100 million market cap. In the good old days, these companies, most of them would have been public already.

What we've seen is, and we've made small opportunistic investments in companies like SharesPost, which, again, we think is -- we're excited about Data Miner, and I talked about some of these on the call. But what we found is that, while we think that there's tremendous opportunity, and it gives us a window, and an opportunity to add to, that from a portfolio management standpoint, we're spending more time with little investments than we think is in the interest of our shareholders.

So, what I think you'll see us likely do is not broaden the number of investments we have to beyond what we have today from a practical standpoint, and really focus on adding to some core positions, when we can get shares at prices that we think represent great value for our shareholders.

Great. Well, thank you, and good luck.

Thanks, Ed.

Your next question is from Jon Hickman, Ladenburg Thalmann. Please go ahead.

Hi. Michael, can you, I mean to the best of your ability without compromising non-public material information, could you talk about potential exits, kind of what you're seeing, or looking at?

Yes,

I know Violin Memory is rumored to be ready for an IPO shortly. Silver Springs is rumored to go public this week. So, anything else you can add to that?

Yes, and you're right. I'd rather be careful because, I mean, when I actually have specific knowledge, and it hasn't been disclosed, then that would obviously be beyond inappropriate for me to discuss that. So, I'm going to be careful in my comments.

But what I can tell you, just to talk from a general standpoint, what's encouraging from a GSV Capital standpoint and shareholders, we see what attitude of many of our companies was that there's no rush to be public. I think when you see the kind of action in NASDAQ, and you see some of the action in IPOs, and you see, candidly, some of the mistakes that have been made waiting too long to go public, such as Facebook, as being exhibit A.

You're seeing these companies look at moving up, when they might have originally scheduled or thinking about going public. And we think that comment I just made is relevant for many of our core positions. So, I think that's a good, I mean, I rank that's a good trend that we're seeing.

In terms of companies out there, what I will say without naming names, I think there are -- not I think there are -- there are companies that beyond thinking about going public, they're in the process of that -- of going through the exercise.

When of the things about the Jobs Act, which I think is actually very, very positive, and we're seeing this in ways that I didn't anticipate, is this quiet filing allows companies to kind of get their ducks in a row without telling the world that they're going public, and sort of evaluate the market, make sure they're ready to go as a company, without sharing all these details to the world as what happened in the old days in terms of the IPO process.

So, yes, we do know factually of a number of our companies, and I don't want to overstate that, but we know more about -- there's just several of our companies, for sure, that are going through that process right now. And again, I think we're optimistic about what the outlook is for these companies. What the fundamentals are, where we own many of these in terms of prices, and what we think the fair market value is going to be when the company goes -- when they go public.

And the other piece, which again is something I think you're going to see more of is the strategic activity. And again, I think, what happened with SharesPost and NASDAQ we think is really exciting. But, I think what you're seeing from businesses is they're getting a bit more confidence. They've had a bunch of cash on their balance sheet for a long time. But they're just, I think, finally starting to feel like we're coming out the other end. And you're starting to see businesses get more aggressive in their activity.

Do you have any time frames for it?

Yes, what I can tell you for, because we do this when we create our best estimate of what we see. I can tell you versus what we would of talked about three months ago, I think we're going to see more activity in 2013 than we thought three months ago, maybe not by a small amount. We think there's a lot of things that could happen that makes 2013 a big year.

But certainly, 2013, 2014, there's going to be a lot of activity with our portfolio, and again, the fundamentals generally speaking, are really good. And so, we think that's all good news for shareholders in the intermediate to long term.

Okay, and then, Silver Spring? The valuation that you're carrying right now, is that based on their -- the price talk in their IPO?

So, we, yes, you look at Silver Spring, we made adjustments down. Silver Spring is -- we made that adjustment down in the third quarter. We made adjustments down in the fourth quarter. That reflective of what has been going on with the pricing activity, both that we saw in the secondary market, but now as we're seeing likely in the public market. So, that's what's going on with that.

Okay. That's it for me. Thanks.

Thanks, Jon.

Thank you. Our next question comes from Robert Burke with Burke Investments. Please go ahead.

Alright. First, I'd like to compliment you on your excellent website that details the holdings, and reasons for investing very clearly, and it's really great. Two things with Silver Spring that the other gentlemen just mentioned. It's coming out around $16 or $18 tomorrow, and you valued it at $3.88 a share. How much do you think that will increase your net asset value? And the second thing, since January 1, have you purchased any additional shares in Twitter or Dropbox?

Thank you for your question. Thank you for your compliment on the website. We do believe that it's critical for us to provide as much information as we are allowed to, and we think the web is obviously a great way to do it. We're going to continuously look for ways to improve that, so I appreciate the compliment, but we also would love feedback, things that would make it better.

As it relates to the Silver Spring, candidly, I think it's premature for us. I don't think it's appropriate for me to make additional comments about it, because we don't know where -- we've got to see where it actually prices, where it trades, and so forth. We've made adjustments, as I've said, in the third and fourth quarter reflecting that. Candidly, we tried to -- I guess that's enough said. So, that's all I can comment there.

As to Twitter and Dropbox, I think you asked if we bought after we disclosed -- after the numbers, and so forth. And the answer is that, in generally speaking, we don't comment about purchases during the quarter unless they're completed, and material. And I can tell you, we haven't made any material purchases of anything that's not reflected in this call.

Thank you.

Thank you.

Thank you. Our next question comes from Mike Knox with Gold Ridge Asset Management. Please go ahead.

Hi, Michael. Thanks a lot for the presentation. My question really revolves around why you guys haven't done any purchases of shares, either personally or by the fund, given that you've kind of expressed that you've got a lot of conviction in your names, you're buy into existing holdings, you don't want to broaden your investment base?

I mean, there's closed-end funds that trade at discounts forever, because the management doesn't care about NAV, and then there are closed-end funds that do things like tender for shares, and do shareholder friendly actions that tend to trade around NAV, and you guys seem to be heading in the wrong direction here, and there's a huge opportunity for you to be able to do things that are accretive to NAV, and I'd like to understand, why you're not doing that.

First of all, thank you for your question, and you're input. To be very clear, we care passionately about our NAV, and about value creation, and the like. I could also tell you that, contrary -- I mean, we have bought -- management, broadly speaking including myself, have bought shares of GSV Capital in the period where were allowed to. And we intend, I'll speak for myself, I intend to continue to buy shares of GSV Capital, because -- that's something, eating your own cooking is something that is an important concept.

I would say, and we evaluate buying back shares, when this is discussion that we're focused on, and we've had conversations both on these calls, but more -- as importantly, internally on the board. And we just feel like that the greatest opportunity in the intermediate to long term to create value for our shareholders, and what we think people are investing in us to do, is to buy shares of these lead names, if we feel like we can buy them at the right price.

I will tell you, Michael, you sound like you have a lot of expertise in this space, maybe, not on the call today just because this is probably -- I think it's a more detailed conversation than we're going to be allowed to on this call this afternoon, but if you wouldn't mind calling me, or setting up a time when we could have a more detailed conversation, I'd love to get both your ideas and your insight, because clearly you have a lot of experience in this area.

Okay, yes, I appreciate that. I mean, obviously, I think what you guys are doing is great, and it provides a great opportunity for people to participate, essentially, in a venture capital market, but at some point there has to be some confidence that that discount won't be there perpetually to have some confidence that the fund will -- the shares will perform somewhat in line with the value you guys create, because that's the value that get out of it. I'll try to arrange a call with you then.

Yes, I'd appreciate that, please do, and with your comment, I couldn't agree more. By the way, I'm as confident as I've ever been in our strategy, in what we're doing, and what we own. But ultimately that confidence has to translate into share price, and we're focused on that, and I'd love to get your input. So, thank you.

Okay. Appreciate it.

Thank you. Our next question is from Richard Schoenfeld, Schoenfeld Consulting. Please go ahead.

Mike, Michael, I just wanted to ask you some specific detail about the lockup dates for Groupon, Zynga, Facebook. When are the lockup dates ending for those three?

All three lockup dates are gone, and so -- yes, the lockup dates on Zynga, Groupon, and Facebook --

So, you're not restricted if you would determine that you wanted to sell any of them now?

No, we're not restricted.

Have you given any thoughts or consideration to divesting the portfolio of Groupon, Zynga, or Facebook?

We actively consider all. I can tell you what's listed on the sheets, in the call today, and what's disclosed in our press release, and it will be in the 10-Q, as is of December 31, 2012. We are constantly evaluating the positions that we have, and what's the appropriate thing for shareholders. And so, we haven't disclosed anything after 12-31-2012 on any of the portfolio.

But it's safe to say that we know that we're not being -- the reason why people are investing in GSV Capital is not for us to have a broad collection of public companies. People can do that on their own. And so, we do look at those positions as trying to exit when we think is in the best fiduciary interest of -- we act as the fiduciary for our shareholders. And we, obviously, with those -- Zynga and Groupon, that lockup's been gone for a while, and so again, we've been monitoring, and look to do the best thing.

So, you can expect that with any of our public positions, they won't be long-term holds. And it's the right commentary for right now.

I understand. And with regard to Silver Spring, the IPO, The Wall Street Journal Deal Journal, Deal Journal today at 3.24 is headlined, Silver Spring IPO expected to break 2013 tech funk -- f-u-n-k. I just wanted a clarification on what you answered the gentlemen earlier. You're showing 510,000 shares of Silver Spring, fair value of -- I've got the 10-Q. I'm not sure which 10-Q I have. But, what -- as of December, what were you valuing the per share of Silver Spring?

Maybe -- go ahead.

Michael, this is Dave Crowder. I can answer that, $3.88 per share. But that was pre a 5-for-1 reverse split the company announced in conjunction with its amended S1 filing. So, our effective price that we're holding Silver Spring at today is $19.40. As one of the gentlemen pointed out earlier, the range is $16 to $18 on the IPO prospectus.

Thank you. Our next question is from Mike Mundo with MundelFS. Please go ahead.

Hello gentlemen. Just want to compliment you. I think you have a great portfolio going on so far. We look forward to a better 2013. Can you hear me?

Yes I can. We appreciate that. Thank you very much.

No problem. I just really have a simple question on regards to -- you mentioned by getting out. There is lot of -- lot of comments were made on this call. Getting out there, getting into the circuit, but what I find a big funk with is the lack of news coming out of the IR side. I mean, the recent deal with SharesPost, I think that is a major reason why investors should look into this fund for getting involved with companies for a possible private takeover, aka Twitter. Any reason why there is such lack of news with your current holdings?

You guys are invested in them. There has been great achievements, especially with Silver Spring, with Violin Networks, great partnerships. They're growing, and again, the recent SharesPost deal with the NASDAQ, I think they are substantial. But, we're finding this out through Twitter, which is one of the companies we like in stocks, but --.

You know what, you're actually, you're dead on/ And so, I'll take responsibility for this. We have hired a new IR firm, and they are the ones that opened the call. We basically brought them on two months ago. So I think, the name of the firm is Financial Profiles, and we interviewed a number of firms before we hired them. So I think, there is a lot of good news going on with our portfolio companies, and we need to be better at being -- indicating that, so people know what's going on, and give them -- understand really the terrific things going on in the portfolio that we have created.

Candidly, we felt with the noise of the Facebook IPO in it being -- and not going the way that anybody expected. We wanted to kind of have the foundation -- we didn't think kind of screaming into the wind was the right thing to do, but we do think with our shares selling at a substantial discount to NAV, with the fundamentals of the portfolio being excellent, we think it's appropriate, in fact we think it's important, for us to be in front of people telling the story, having them understand what's underneath the hood, then understand the valuation discrepancy kind of (inaudible).

There were things that you will see, I won't say you hope to see, what you will see is an accelerated amount of information that we are providing. Again, we will provide some of this in the website, and we won't overburden people with press releases and the like, but we do know that we have to do a much better job of providing the information to shareholders, so they can understand that this is really good stuff that we own. and there's really good things going on. So thank you for your comments, I couldn't agree more. Thanks.

And one follow-up. They've been on for two months, and I am excited to see them aboard, and I am not looking for you guys to yell into the wind, I'll take a whisper at this point. And the Facebook situation, yes, that was nothing to do with your investment. You guys were great about holding back, and not adding into the hype. So, I just want to get the news out there. There's a lot of value, stocks turning a 35% discount, and I think you guys have the responsibility just to get that news out there. Not to pat yourself on the back, but it should be out there, and it should be on the GSV news to bring awareness to the shareholders. That's all. Thank you.

You are completely right. It is our responsibility, and we haven't done as good a job with that as we need to do, and my commitment to you and our shareholders is you are going to see a much better job of that going forward. And I think this focus -- we have been focused on accessing great comp, getting the stock, getting the deal, building the network, all the things that we think are going to create long-term value for our shareholders.

But it's not fair to our shareholders, that were selling at 35% discount, and a fair amount of that is because people just don't really know what we have done, and we need to make sure that's changing. So I think we are excited about -- I am excited being at the Piper Jaffray Conference tomorrow, I am excited to be at Roth next week, I am excited I think because we look at the next couple of months, we are on the schedule for other events like that, and that we think will be helpful in addition to getting our IR engine revved up. So thank you.

Michael and Mike, this is Steve Bard. I would just add to what Michael said, in addition to being the Chief Financial Officer, I also wear the Chief Compliance Officer hat, and the reality is, in defense of our IR firm, the devil's in the details. There are a lot of things, as we all know, which float around in the media, which are sometimes speculative in nature, factually incorrect, and we need to be absolutely 100% sure that anything we are communicating is absolutely accurate.

Then furthermore, a number of our portfolio companies, the issuers actually preclude or prohibit us from issuing any sort of press, where they are mentioned without their blessing. Sometimes they just outright prohibit us from issuing press about them. So I just wanted -- I wanted to put that on the table as well, but Mike Mundo, we really appreciate your support, your comments, your insights and onward and upward.

Thank you. And our final question comes from Woody Welch with Cravens and Company. Please go ahead.

Michael, with the continual decline in the asset manage -- or the net asset value, have you considered cutting the management fees? Those seem to be a significant portion of the decline. Maybe cutting them until you can turn that part around?

Thanks for the question Woody. We haven't had discussion around cutting the management fees. Candidly, we have to look at every aspect of the business, and considering what's the appropriate way to manage it. But I'll tell you that what we're doing, and some of what we've done, which again, we think will accrue to our shareholders in a material way. There is over the past two years, since we have been out there, we have materially added to our investment professional team, and to the other support services that we think are going to create the kind of value that people have invested in us to do.

So certainly, we want to do what is in the best interest of our shareholders. We will do what's in our best interest of our shareholders, but to create value, we need a team. We will keep -- we are bringing in phenomenal people. Dave Crowder on this line is an example of that, who has tremendous experience. But you look at the team and our website, and we certainly have a team that is -- that we are resourced well in excess of a small fund that we currently manage, because what we expect is -- we expect the value here to grow, and we have the right team to execute.

So, I appreciate the comment. I appreciate the question. We'll do everything we think is right for our shareholders. So appreciate that Woody. Thank you.

Thank you. We do have one more question from Mark Tannen with Beacon Investment Solutions. Please go ahead.

Good afternoon gentlemen. I guess I have several questions, but I think some of the participants, or some of the people spoke already discussed a few matters related to the IR, related to more of the company trying to provide more value to the shareholders. Not exactly in, with regards to all your portfolios, but I think the concept out there is, we have a list of companies. There's 47 per se per the paper work that I'm reviewing here. And I look and say what's the value? Are these companies being bought at a higher price, if the valuation per se is a correct valuation?

And then from that standpoint, is the company really have some sort of an exit strategy, where if I'm a shareholder, and I am buying this stock, where do I see that potential where the company is going to make money, or at least, is there something that they're showing that really says they want to. Like a gentleman did make a comment, have you guys went back and bought back in? Have you made an attempt to show as a management team? We trust what we are speaking, and we want to buy it back. I start looking at the fees, and I understand with the closed-end fund. There is a lot of management fees.

So, I guess I am really not 100% have everything grasped in my hands to say, where is that value? It's difficult because as an advisor, or somebody who looks to suggest or review things for clients, when I look at what the portfolio has put together and there are some good names, but what is that short term, what is that long term approach? what is that exit strategy, and where is that valuation all going to come into play?

Yes, and I am sorry, can I get your name one more time, I think I wrote down the wrong name when you asked the question, Mark --?

Tannen.

Okay Mark. Couple, three things, okay, and there is -- you have covered some different pieces, I hope I've got -- I hope I answer your question well. But, if you start with the reality. The reality, as Bill Parcells says, is you are what your record says you are. And so we've got to objectively look at the companies that we've invested in, and sort of what's going on with them.

Now there is a reality, and there are some things we've learned and are -- as relates to this fund. This is a unique fund that nobody has really done what we are doing here. And some of the lessons that we have learned, include -- we are unlikely to invest in a company that we think is going to be public in a matter of months, unless we think it's at such a substantial discount that we really understand, that we think it warrants it, because we think a lot of the value creation here is from the underlying growth, and so we want to have the growth be that value creation driver, not trying to perfectly time the IPO.

Secondly, when you look at -- with 47 positions, and I made this comment earlier, you can get lost in some of the noise, because 47 companies go on at 80% plus, there is a lot of activity. Yet, if you really look at the fund, what's going to really drive value is not how all 47 of those do. It's really how do our top 10 do, and how do our top 20 do, because that's where, candidly, Twitter at $36 million, and as much as we are excited about Spotify, and I referenced to Spotify, our investment in Twitter is 10x what it is in Spotify.

So. Twitter doubles, that's $36 million -- $36 million of -- or more than $36 million again, because we've already had gains that we were forced to markup. Palantir, Violin Memory, Dropbox, Chegg -- Chegg is a company we haven't even talked about. We love Chegg. Their business is doing tremendously well. Avenues, as we mentioned on the call, Solexel, 2U, Kn, Control4, we haven't talked about. That's another name that is just a great growth name.

And so, we know where we are on them, We go through them. We have a very exhaustive process that we have an outside valuation firm. We have our auditors looking at this, and frankly, the negative stuff is a lot quicker to be reflected than positive stuff, and that's appropriate, right.

But when we look at our top 20 names, which are going to drive a disproportionate amount of value, and specifically our top 10 names, we are very excited, and again, just to make sure that you have this, both myself and broadly, management has bought stock recently. And I intend to continue to buy stock. So I just don't want that to be -- that impression to be left, because that's not correct and s,o anyway. I think that pretty addressed what you said.

I think with that, what I'd like to again say is for people tuning in, we appreciate everybody's interest in GSV Capital. We are looking forward to creating great returns for our investors in 2013. We ultimately believe that fundamentals drive stock price, and we think the fundamentals of our investments are compelling, and we are going to work extraordinarily hard to provide you with the type of returns you have trusted us with in terms of investing your money.

So thank you, we look forward to again -- you'll hear more from us between now and our next quarterly call, but we hope to have a bunch of other things to talk about at our next formal quarterly call. Thank you very much. Have a great rest of your day.

Thank you, sir. Same to you.

Ladies and gentlemen, if you'd like to listen to a replay of today's conference, please dial 1-800-406-7325, or 303-590-3030 using the access code of 4603561 followed by the # key. This does conclude the GSV Capital fourth quarter and fiscal year 2012 conference call. Thank you very much for your participation. You may now disconnect.