Common use of Portfolio Composition Clause in Contracts

Portfolio Composition. Our portfolio companies are primarily privately held companies and public companies which are active in the drug discovery & development, software, internet consumer & business services, media/content/info, sustainable and renewable technology, medical devices & equipment, drug delivery, healthcare services, specialty pharmaceuticals, information services, consumer & business products, surgical devices, semiconductors, electronics & computer hardware, communications & networking, biotechnology tools, diagnostic and diversified financial services industry sectors. These sectors are characterized by high margins, high growth rates, consolidation and product and market extension opportunities. Value for companies in these sectors is often vested in intangible assets and intellectual property. As of December 31, 2018, approximately 87.8% of the fair value of our portfolio was composed of investments in five industries: 29.2% was composed of investments in the software industry, 28.7% was composed of investments in the drug discovery and development industry, 17.5% was composed of investments in the internet consumer and business services industry, 6.5% was composed of investments in the medical devices and equipment industry, and 5.9% was composed of investments in the sustainable and renewable technology industry. The following table shows the fair value of our portfolio by industry sector at December 31, 2018 and December 31, 2017: December 31, 2018 December 31, 2017 (in thousands) Investments at Fair Value Percentage of Total Portfolio Investments at Fair Value Percentage of Total Portfolio Software $ 548,952 29.2% $ 360,123 23.4% Drug Discovery & Development 539,977 28.7% 369,173 23.9% Internet Consumer & Business Services 329,512 17.5% 154,909 10.0% Medical Devices & Equipment 121,420 6.5% 94,595 6.1% Sustainable and Renewable Technology 110,303 5.9% 118,432 7.7% Healthcare Services, Other 60,142 3.2% 72,337 4.7% Drug Delivery 40,519 2.2% 91,214 5.9% Diversified Financial Services 39,491 2.1% — 0.0% Information Services 30,940 1.6% 24,618 1.6% Media/Content/Info 21,666 1.2% 152,998 9.9% Electronics & Computer Hardware 15,763 0.8% 9,982 0.6% Biotechnology Tools 6,279 0.3% 5,604 0.4% Consumer & Business Products 6,179 0.3% 19,792 1.3% Communications & Networking 4,871 0.3% 6,649 0.4% Surgical Devices 3,088 0.2% 13,161 0.9% Semiconductors 899 0.0% 10,406 0.7% Diagnostic 348 0.0% 720 0.1% Specialty Pharmaceuticals 24 0.0% 37,501 2.4% Total $ 1,880,373 100.0% $ 1,542,214 100.0% Industry and sector concentrations vary as new loans are recorded and loans pay off. Loan revenue, consisting of interest, fees, and recognition of gains on equity and warrants or other equity-related interests, can fluctuate materially when a loan is paid off or a warrant or equity interest is sold. Revenue recognition in any given year can be highly concentrated in several portfolio companies. For the years ended December 31, 2018 and 2017, our ten largest portfolio companies represented approximately 28.2% and 34.6% of the total fair value of our investments in portfolio companies, respectively. At December 31, 2018 and December 31, 2017, we had seven investments that represented 5% or more of our net assets. At December 31, 2018 and December 31, 2017, we had five and nine equity investments representing approximately 53.0% and 67.1%, respectively, of the total fair value of our equity investments, and each represented 5% or more of the total fair value of our equity investments. No single portfolio investment represents more than 10% of the fair value of our total investments as of December 31, 2018 and 2017. As of December 31, 2018, approximately 97.3% of the debt investment portfolio was priced at floating interest rates or floating interest rates with a Prime or LIBOR- based interest rate floor. As a result, we believe we are well positioned to benefit should market interest rates continue to rise. In most cases, we collateralize our investments by obtaining a first priority security interest in a portfolio company’s assets, which may include its intellectual property. In other cases, we may obtain a negative pledge covering a company’s intellectual property. As of December 31, 2018, approximately 85.3% of our debt investments were in a senior secured first lien position, with 48.5% secured by a first priority security in all of the assets of the portfolio company, including its intellectual property, 28.8% secured by a first priority security in all of the assets of the portfolio company and the portfolio company was prohibited from pledging or encumbering its intellectual property. 1.1% of our debt investments were senior secured by the equipment of the portfolio company, and 6.9% were in a first lien “last-out” senior secured position with security interest in all of the assets of the portfolio company, whereby the “last-out” loans will be subordinated to the“first-out” portion of the unitranche loan in a liquidation, sale or other disposition. Another 13.8% of our debt investments were secured by a second priority security interest in all of the portfolio company’s assets, and 0.9% were unsecured. Our investments in senior secured debt with warrants have detachable equity enhancement features, typically in the form of warrants or other equity-related securities designed to provide us with an opportunity for capital appreciation. These features are treated as original issue discount and are accreted into interest income over the term of the loan as a yield enhancement. Our warrant coverage generally ranges from 3% to 20% of the principal amount invested in a portfolio company, with a strike price generally equal to the most recent equity financing round. As of December 31, 2018, we held warrants in 129 portfolio companies, with a fair value of approximately $26.7 million. The fair value of our warrant portfolio decreased by approximately $10.1 million, as compared to a fair value of $36.8 million at December 31, 2017, primarily related a slight decrease in portfolio companies and valuation of the portfolio. Our existing warrant holdings would require us to invest approximately $78.7 million to exercise such warrants as of December 31, 2018. Warrants may appreciate or depreciate in value depending largely upon the underlying portfolio company’s performance and overall market conditions. Of the warrants that we have monetized since inception, we have realized multiples in the range of approximately 1.02x to 29.06x based on the historical rate of return on our investments. However, our warrants may not appreciate in value and, in fact, may decline in value. Accordingly, we may experience losses from our warrant portfolio. Portfolio Grading We use an investment grading system, which grades each debt investment on a scale of 1 to 5, to characterize and monitor our expected level of risk on the debt investments in our portfolio with 1 being the highest quality. The following table shows the distribution of our outstanding debt investments on the 1 to 5 investment grading scale at fair value as of December 31, 2018 and 2017, respectively: (in thousands) December 31, 2018 December 31, 2017 Investment Grading Number ofCompanies Debt Investments at Fair Value Percentage of Total Portfolio Number ofCompanies Debt Investments at Fair Value Percentage of Total Portfolio 1 13 $ 311,597 18.0% 12 $ 345,191 24.4% 2 43 885,123 51.1% 32 583,017 41.2% 3 25 474,926 27.3% 32 443,775 31.3% 4 7 60,267 3.5% 4 41,744 2.9% 5 2 1,579 0.1% 5 2,257 0.2% 90 $ 1,733,492 100.0% 85 $ 1,415,984 100.0% As of December 31, 2018, our debt investments had a weighted average investment grading of 2.18 on a cost basis, as compared to 2.17 at December 31, 2017. Our policy is to lower the grading on our portfolio companies as they approach the point in time when they will require additional equity capital. Additionally, we may downgrade our portfolio companies if they are not meeting our financing criteria or are underperforming relative to their respective business plans. Various companies in our portfolio will require additional funding in the near term or have not met their business plans and therefore have been downgraded until their funding is complete or their operations improve. The slight increase in weighted average investment grading at December 31, 2018 from December 31, 2017 is primarily due to an overall decrease in positions with a credit rating of 1. At December 31, 2018, we had two debt investments onnon-accrual with a cumulative investment cost of approximately $2.7 million and zero fair value. At December 31, 2017, we had five debt investments on non-accrual with a cumulative investment cost and fair value of approximately $14.8 million and $340,000, respectively. The decrease in the cumulative cost and fair value of debt investments on non-accrual between December 31, 2018 and December 31, 2017 is the result of the liquidation of two debt investments that were on non-accrual at December 31, 2017, which resulted in a realized loss of approximately $10.3 million, slightly offset by a loan repayment in full from one debt investment.

Portfolio Composition. Our portfolio companies are primarily privately held companies and and, to a lesser extent, public companies which are active in the drug discovery & and development, internet consumer and business services, clean technology, software, internet consumer & business servicesdrug delivery, medical device and equipment, media/content/info, sustainable communications and renewable technologynetworking, medical devices & equipment, drug deliveryinformation services, healthcare services, diagnostic, specialty pharmaceuticals, information services, consumer & business productsbiotechnology tools, surgical devices, consumer and business products, semiconductors, electronics & and computer hardware, communications & networking, biotechnology tools, diagnostic hardware and diversified financial services therapeutic industry sectors. These sectors are characterized by high margins, high growth rates, consolidation and product and market extension opportunities. Value for companies in these sectors is often vested in intangible assets and intellectual property. As of December 31June 30, 20182013, approximately 87.859.9% of the fair value of our portfolio was composed of investments in five four industries: 29.2% was composed of investments in the software industry, 28.720.8% was composed of investments in the drug discovery and development industry, 17.514.5% was composed of investments in the internet consumer and business services industry, 6.515.1% was composed of investments in the clean technology industry and 9.5% was composed of investments in the medical devices device and equipment industry, and 5.9% was composed of investments in the sustainable and renewable technology industry. The following table shows the fair value of our portfolio by industry sector at December 31June 30, 2018 2013 (unaudited) and December 31, 20172012: June 30, 2013 December 31, 2018 December 31, 2017 2012 (in thousands) Investments at Fair Value Percentage of Total Portfolio Investments at Fair Value Percentage of Total Portfolio Software $ 548,952 29.2% $ 360,123 23.4% Drug Discovery & Development 539,977 28.7$ 216,633 20.8% 369,173 23.9$ 188,479 20.8% Clean Tech 158,611 15.1% 126,600 14.0% Internet Consumer & Business Services 329,512 17.5150,592 14.5% 154,909 10.0136,149 15.0% Medical Devices Device & Equipment 121,420 6.599,014 9.5% 94,595 6.154,575 6.0% Sustainable and Renewable Technology 110,303 Software 88,954 8.5% 70,838 7.8% Drug Delivery 61,039 5.9% 118,432 7.774,218 8.2% Information Services 49,894 4.8% 53,523 5.9% Communications & Networking 47,689 4.6% 37,560 4.1% Healthcare Services, Other 60,142 3.247,593 4.6% 72,337 4.7% Drug Delivery 40,519 2.2% 91,214 5.9% Diversified Financial Services 39,491 2.1% — 0.0% Information Services 30,940 1.6% 24,618 1.636,481 4.0% Media/Content/Info 21,666 1.227,002 2.6% 152,998 9.951,534 5.7% Electronics & Computer Hardware 15,763 0.825,114 2.4% 9,982 0.612,715 1.4% Biotechnology Tools 6,279 0.3Specialty Pharma 22,844 2.2% 5,604 0.412,473 1.4% Surgical Devices 12,010 1.2% 11,358 1.3% Consumer & Business Products 6,179 10,606 1.0% 13,723 1.5% Diagnostic 10,543 1.0% 16,307 1.8% Semiconductors 6,880 0.7% 2,922 0.3% 19,792 1.3Biotechnology Tools 6,102 0.6% Communications & Networking 4,871 0.36,845 0.8% 6,649 0.4% Surgical Devices 3,088 0.2% 13,161 0.9% Semiconductors 899 0.0% 10,406 0.7% Diagnostic 348 0.0% 720 0.1% Specialty Pharmaceuticals 24 0.0% 37,501 2.4% Total $ 1,880,373 1,041,120 100.0% $ 1,542,214 906,300 100.0% Industry and sector concentrations vary as new loans are recorded and loans pay off. Loan revenue, consisting of interest, fees, and recognition of gains on equity and warrants or other equity-related interests, can fluctuate materially dramatically when a loan is paid off or a related warrant or equity interest is sold. Revenue recognition in any given year can be highly concentrated in among several portfolio companies. For the years six-months ended June 30, 2013 and the year ended December 31, 2018 and 20172012, our ten largest portfolio companies represented approximately 28.230.6% and 34.635.2% of the total fair value of our investments in portfolio companies, respectively. At December 31June 30, 2018 2013 and December 31, 20172012, we had seven investments four and eight investments, respectively, that represented 5% or more of our net assets. At December 31June 30, 2018 and December 31, 20172013, we had five and nine seven equity investments representing approximately 53.067.9% and 67.1%, respectively, of the total fair value of our equity investments, and each represented 5% or more of the total fair value of our equity investments. No single portfolio investment represents more than 10At December 31, 2012, we had six equity investments which represented approximately 70.9% of the total fair value of our equity investments, and each represented 5% or more of the total investments as fair value of December 31, 2018 and 2017such investments. As of December 31June 30, 20182013, approximately 97.3over 98.8% of our debt investments were in a senior secured first lien position, and more than 98.1% of the debt investment portfolio was priced at floating interest rates or floating interest rates with a Prime or LIBOR- LIBOR based interest rate floor. As a result, we believe we are well positioned to benefit should market interest rates continue to rise. In most cases, we collateralize our investments by obtaining a first priority security interest in a portfolio company’s assets, which may include its intellectual property. In other cases, we may obtain a negative pledge covering a company’s intellectual property. As of December 31, 2018, approximately 85.3% of our debt investments were in a senior secured first lien position, with 48.5% secured by a first priority security in all of the assets of the portfolio company, including its intellectual property, 28.8% secured by a first priority security in all of the assets of the portfolio company and the portfolio company was prohibited from pledging or encumbering its intellectual property. 1.1% of our debt investments were senior secured by the equipment of the portfolio company, and 6.9% were in a first lien “last-out” senior secured position with security interest in all of the assets of the portfolio company, whereby the “last-out” loans will be subordinated to the“first-out” portion of the unitranche loan in a liquidation, sale or other disposition. Another 13.8% of our debt investments were secured by a second priority security interest in all of the portfolio company’s assets, and 0.9% were unsecuredincrease. Our investments in senior secured debt with warrants have detachable equity enhancement features, typically in the form of warrants or other equity-related securities designed to provide us with an opportunity for capital appreciation. These features are treated as original issue discount and are accreted into interest income over the term of the loan as a yield enhancement. Our warrant coverage generally ranges from 3% to 20% of the principal amount invested in a portfolio company, with a strike price generally equal to the most recent equity financing round. As of December 31June 30, 20182013, we held warrants in 129 120 portfolio companies, with a fair value of approximately $26.7 35.2 million. The fair value of our the warrant portfolio decreased has increased by approximately $10.1 million, 19.3% as compared to a the fair value of $36.8 29.5 million at December 31, 2017, primarily related a slight decrease in portfolio companies and valuation of the portfolio2012. Our existing These warrant holdings would require us to invest approximately $78.7 74.8 million to exercise such warrants as of December 31, 2018warrants. Warrants may appreciate or depreciate in value depending largely upon the underlying portfolio company’s performance and overall market conditions. Of the warrants that we which have monetized since inception, we have realized warrant gain multiples in the range of approximately 1.02x 1.04x to 29.06x 14.91x based on the historical rate of return on our investments. However, our these warrants may not appreciate in value and, in fact, may decline in value. Accordingly, we may experience losses not be able to realize gains from our warrant portfolio. Portfolio Grading We use an investment grading system, which grades each debt investment on a scale of 1 to 5, to characterize and monitor our expected level of risk on the debt investments in our portfolio with 1 being the highest quality. The following table shows the distribution of our outstanding debt investments on the 1 to 5 investment grading scale at fair value as of December 31, 2018 and 2017, respectively: (in thousands) December 31, 2018 December 31, 2017 Investment Grading Number ofCompanies Debt Investments at Fair Value Percentage of Total Portfolio Number ofCompanies Debt Investments at Fair Value Percentage of Total Portfolio 1 13 $ 311,597 18.0% 12 $ 345,191 24.4% 2 43 885,123 51.1% 32 583,017 41.2% 3 25 474,926 27.3% 32 443,775 31.3% 4 7 60,267 3.5% 4 41,744 2.9% 5 2 1,579 0.1% 5 2,257 0.2% 90 $ 1,733,492 100.0% 85 $ 1,415,984 100.0% As of December 31, 2018, our debt investments had a weighted average investment grading of 2.18 on a cost basis, as compared to 2.17 at December 31, 2017. Our policy is to lower the grading on our portfolio companies as they approach the point in time when they will require additional equity capital. Additionally, we may downgrade our portfolio companies if they are not meeting our financing criteria or are underperforming relative to their respective business plans. Various companies in our portfolio will require additional funding in the near term or have not met their business plans and therefore have been downgraded until their funding is complete or their operations improve. The slight increase in weighted average investment grading at December 31, 2018 from December 31, 2017 is primarily due to an overall decrease in positions with a credit rating of 1. At December 31, 2018, we had two debt investments onnon-accrual with a cumulative investment cost of approximately $2.7 million and zero fair value. At December 31, 2017, we had five debt investments on non-accrual with a cumulative investment cost and fair value of approximately $14.8 million and $340,000, respectively. The decrease in the cumulative cost and fair value of debt investments on non-accrual between December 31, 2018 and December 31, 2017 is the result of the liquidation of two debt investments that were on non-accrual at December 31, 2017, which resulted in a realized loss of approximately $10.3 million, slightly offset by a loan repayment in full from one debt investmentinterests.

Portfolio Composition. Our portfolio companies are primarily privately held companies and public companies which are active in the drug discovery & and development, energy technology, internet consumer and business services, medical device and equipment, software, internet consumer & business servicesdrug delivery, specialty pharmaceuticals, communications and networking, media/content/info, sustainable and renewable technology, medical devices & equipment, drug delivery, healthcare services, specialty pharmaceuticals, information services, consumer & business products, surgical devices, semiconductors, electronics & computer hardware, communications & networking, biotechnology tools, consumer and business products, diagnostic and diversified financial services electronics and computer hardware industry sectors. These sectors are characterized by high margins, high growth rates, consolidation and product and market extension opportunities. Value for companies in these sectors is often vested in intangible assets and intellectual property. As of December March 31, 20182014, approximately 87.864.9% of the fair value of our portfolio was composed of investments in five four industries: 29.2% was composed of investments in the software industry, 28.723.2% was composed of investments in the drug discovery and development industry, 17.518.7% was composed of investments in the energy technology industry, 11.9% was composed of investments in the internet consumer and business services industry, 6.5industry and 11.1% was composed of investments in the medical devices device and equipment industry, and 5.9% was composed of investments in the sustainable and renewable technology industry. The following table shows the fair value of our portfolio by industry sector at December March 31, 2018 2014 (unaudited) and December 31, 20172013: March 31, 2014 December 31, 2018 December 31, 2017 2013 (in thousands) Investments at Fair Value Percentage of Total Portfolio Investments at Fair Value Percentage of Total Portfolio Software $ 548,952 29.2% $ 360,123 23.4% Drug Discovery & Development 539,977 28.7$ 206,535 23.2% 369,173 23.9$ 219,169 24.1% Energy Technology 166,482 18.7% 164,466 18.1% Internet Consumer & Business Services 329,512 17.5105,964 11.9% 154,909 10.0122,073 13.4% Medical Devices & Equipment 121,420 6.599,061 11.1% 94,595 6.1103,614 11.4% Sustainable and Renewable Technology 110,303 5.9Software 79,077 8.9% 118,432 7.7% Healthcare Services, Other 60,142 3.2% 72,337 4.765,218 7.2% Drug Delivery 40,519 63,335 7.1% 62,022 6.8% Specialty Pharmaceuticals 40,217 4.5% 20,055 2.2% 91,214 5.9Communications & Networking 35,526 4.0% Diversified Financial Services 39,491 2.1% — 0.0% Information Services 30,940 1.6% 24,618 1.635,979 4.0% Media/Content/Info 21,666 1.229,447 3.3% 152,998 9.98,679 1.0% Healthcare Services, Other 20,626 2.3% 29,080 3.2% Information Services 15,102 1.7% 46,565 5.1% Surgical Devices 10,353 1.1% 10,307 1.0% Semiconductors 9,464 1.1% 4,685 0.5% Biotechnology Tools 4,541 0.5% 5,275 0.6% Consumer & Business Products 3,282 0.4% 2,995 0.3% Diagnostic 858 0.1% 902 0.1% Electronics & Computer Hardware 15,763 0.8% 9,982 0.6% Biotechnology Tools 6,279 0.3% 5,604 0.4% Consumer & Business Products 6,179 0.3% 19,792 1.3% Communications & Networking 4,871 0.3% 6,649 0.4% Surgical Devices 3,088 0.2% 13,161 0.9% Semiconductors 899 0.0% 10,406 0.7% Diagnostic 348 0.0% 720 792 0.1% Specialty Pharmaceuticals 24 0.09,211 1.0% 37,501 2.4% Total $ 1,880,373 890,662 100.0% $ 1,542,214 910,295 100.0% Industry and sector concentrations vary as new loans are recorded and loans pay off. Loan revenue, consisting of interest, fees, and recognition of gains on equity and warrants or other equity-equity- related interests, can fluctuate materially when a loan is paid off or a related warrant or equity interest is sold. Revenue recognition in any given year can be highly concentrated in among several portfolio companies. For the years three-months ended March 31, 2014 and the year ended December 31, 2018 and 20172013, our ten largest portfolio companies represented approximately 28.229.5% and 34.629.3% of the total fair value of our investments in portfolio companies, respectively. At December both March 31, 2018 2014 and December 31, 20172013, we had seven investments one investment that represented 5% or more of our net assets. At December March 31, 2018 and December 31, 20172014, we had five and nine equity investments representing approximately 53.071.0% and 67.1%, respectively, of the total fair value of our equity investments, and each represented 5% or more of the total fair value of our equity investments. No single portfolio investment represents more than 10At December 31, 2013, we had six equity investments which represented approximately 75.7% of the total fair value of our equity investments, and each represented 5% or more of the total investments as fair value of December 31, 2018 and 2017our equity investments. As of December March 31, 20182014, 100% of our debt investments were in a senior secured first lien position, and approximately 97.398.0% of the debt investment portfolio was priced at floating interest rates or floating interest rates with a Prime Prime-or LIBOR- LIBOR-based interest rate floor. As a result, we believe we are well positioned to benefit should market interest rates continue to rise. In most cases, we collateralize our investments by obtaining a first priority security interest in a portfolio company’s assets, which may include its intellectual property. In other cases, we may obtain a negative pledge covering a company’s intellectual property. As of December 31, 2018, approximately 85.3% of our debt investments were in a senior secured first lien position, with 48.5% secured by a first priority security in all of the assets of the portfolio company, including its intellectual property, 28.8% secured by a first priority security in all of the assets of the portfolio company and the portfolio company was prohibited from pledging or encumbering its intellectual property. 1.1% of our debt investments were senior secured by the equipment of the portfolio company, and 6.9% were in a first lien “last-out” senior secured position with security interest in all of the assets of the portfolio company, whereby the “last-out” loans will be subordinated to the“first-out” portion of the unitranche loan in a liquidation, sale or other disposition. Another 13.8% of our debt investments were secured by a second priority security interest in all of the portfolio company’s assets, and 0.9% were unsecuredincrease. Our investments in senior secured debt with warrants have detachable equity enhancement features, typically in the form of warrants or other equity-related securities designed to provide us with an opportunity for capital appreciation. These features are treated as original issue discount and are accreted into interest income over the term of the loan as a yield enhancement. Our warrant coverage generally ranges from 3% to 20% of the principal amount invested in a portfolio company, with a strike price generally equal to the most recent equity financing round. As of December March 31, 20182014, we held warrants in 129 107 portfolio companies, with a fair value of approximately $26.7 23.6 million. The fair value of our warrant portfolio decreased by approximately $10.1 million33.7%, as compared to a fair value of $36.8 35.6 million at December 31, 2017, 2013 primarily related a slight decrease to the reversal of unrealized appreciation related to the exercise of our warrant positions in portfolio companies Neuralstem, Inc. ($751,000) and valuation of the portfolioBox, Inc. ($8.3 million) to preferred stock. Our existing warrant holdings currently would require us to invest approximately $78.7 68.6 million to exercise such warrants as of December March 31, 20182014. Warrants may appreciate or depreciate in value depending largely upon the underlying portfolio company’s performance and overall market conditions. Of the warrants that which we have monetized since inception, we have realized warrant gain multiples in the range of approximately 1.02x 1.01x to 29.06x 14.91x based on the historical rate of return on our investments. However, our warrants may not appreciate in value and, in fact, may decline in value. Accordingly, we may experience losses not be able to realize gains from our warrant portfolio. Portfolio Grading We use an investment grading system, which grades each debt investment on a scale of 1 to 5, to characterize and monitor our expected level of risk on the debt investments in our portfolio with 1 being the highest quality. The following table shows the distribution of our outstanding debt investments on the 1 to 5 investment grading scale at fair value as of December 31, 2018 and 2017, respectively: (in thousands) December 31, 2018 December 31, 2017 Investment Grading Number ofCompanies Debt Investments at Fair Value Percentage of Total Portfolio Number ofCompanies Debt Investments at Fair Value Percentage of Total Portfolio 1 13 $ 311,597 18.0% 12 $ 345,191 24.4% 2 43 885,123 51.1% 32 583,017 41.2% 3 25 474,926 27.3% 32 443,775 31.3% 4 7 60,267 3.5% 4 41,744 2.9% 5 2 1,579 0.1% 5 2,257 0.2% 90 $ 1,733,492 100.0% 85 $ 1,415,984 100.0% As of December 31, 2018, our debt investments had a weighted average investment grading of 2.18 on a cost basis, as compared to 2.17 at December 31, 2017. Our policy is to lower the grading on our portfolio companies as they approach the point in time when they will require additional equity capital. Additionally, we may downgrade our portfolio companies if they are not meeting our financing criteria or are underperforming relative to their respective business plans. Various companies in our portfolio will require additional funding in the near term or have not met their business plans and therefore have been downgraded until their funding is complete or their operations improve. The slight increase in weighted average investment grading at December 31, 2018 from December 31, 2017 is primarily due to an overall decrease in positions with a credit rating of 1. At December 31, 2018, we had two debt investments onnon-accrual with a cumulative investment cost of approximately $2.7 million and zero fair value. At December 31, 2017, we had five debt investments on non-accrual with a cumulative investment cost and fair value of approximately $14.8 million and $340,000, respectively. The decrease in the cumulative cost and fair value of debt investments on non-accrual between December 31, 2018 and December 31, 2017 is the result of the liquidation of two debt investments that were on non-accrual at December 31, 2017, which resulted in a realized loss of approximately $10.3 million, slightly offset by a loan repayment in full from one debt investment.

Portfolio Composition. Our portfolio companies are primarily privately held companies and public companies which are active in the drug discovery & and development, medical device and equipment, software, internet consumer & and business services, energy technology, drug delivery, specialty pharmaceuticals, communications and networking, media/content/info, sustainable consumer and renewable technologybusiness products, medical devices & equipmentinformation services, drug deliverysurgical devices, healthcare services, specialty pharmaceuticals, information services, consumer & business products, surgical devices, semiconductors, electronics & computer hardware, communications & networking, biotechnology tools, diagnostic and diversified financial services electronics and computer hardware industry sectors. These sectors are characterized by high margins, high growth rates, consolidation and product and market extension opportunities. Value for companies in these sectors is often vested in intangible assets and intellectual property. As of December 31September 30, 20182014, approximately 87.868.9% of the fair value of our portfolio was composed of investments in five industries: 29.2% was composed of investments in the software industry, 28.723.2% was composed of investments in the drug discovery and development industry, 17.5% was composed of investments in the internet consumer and business services industry, 6.513.9% was composed of investments in the medical devices and equipment industry, and 5.911.3% was composed of investments in the sustainable software industry, 10.6% was composed of investments in the internet consumer and renewable business services industry and 9.9% was composed of investments in the energy technology industry. The following table shows the fair value of our portfolio by industry sector at December 31September 30, 2018 2014 (unaudited) and December 31, 20172013: September 30, 2014 December 31, 2018 December 31, 2017 2013 (in thousands) Investments at Fair Value Percentage of Total Portfolio Investments at Fair Value Percentage of Total Portfolio Software $ 548,952 29.2% $ 360,123 23.4% Drug Discovery & Development 539,977 28.7$ 232,214 23.2% 369,173 23.9$ 219,169 24.1% Medical Devices & Equipment 139,154 13.9% 103,614 11.4% Software 112,503 11.3% 65,218 7.2% Internet Consumer & Business Services 329,512 17.5106,128 10.6% 154,909 10.0122,073 13.4% Medical Devices & Equipment 121,420 6.5Energy Technology 98,555 9.9% 94,595 6.1% Sustainable and Renewable Technology 110,303 5.9% 118,432 7.7% Healthcare Services, Other 60,142 3.2% 72,337 4.7164,466 18.1% Drug Delivery 40,519 83,247 8.3% 62,022 6.8% Specialty Pharmaceuticals 73,127 7.3% 20,055 2.2% 91,214 5.9Communications & Networking 56,292 5.6% Diversified Financial Services 39,491 2.1% — 0.0% Information Services 30,940 1.6% 24,618 1.635,979 4.0% Media/Content/Info 21,666 1.229,361 2.9% 152,998 9.98,679 1.0% Consumer & Business Products 25,309 2.5% 2,995 0.3% Information Services 14,917 1.5% 46,565 5.1% Surgical Devices 9,822 1.0% 10,307 1.0% Healthcare Services, Other 7,666 0.8% 4,685 0.5% Semiconductors 5,354 0.6% 29,080 3.2% Biotechnology Tools 3,894 0.4% 5,275 0.6% Diagnostic 775 0.1% 902 0.1% Electronics & Computer Hardware 15,763 0.8% 9,982 0.6% Biotechnology Tools 6,279 0.3% 5,604 0.4% Consumer & Business Products 6,179 0.3% 19,792 1.3% Communications & Networking 4,871 0.3% 6,649 0.4% Surgical Devices 3,088 0.2% 13,161 0.9% Semiconductors 899 0.0% 10,406 0.7% Diagnostic 348 0.0% 720 595 0.1% Specialty Pharmaceuticals 24 0.09,211 1.0% 37,501 2.4% Total $ 1,880,373 998,913 100.0% $ 1,542,214 910,295 100.0% Industry and sector concentrations vary as new loans are recorded and loans pay off. Loan revenue, consisting of interest, fees, and recognition of gains on equity and warrants or other equity-equity- related interests, can fluctuate materially when a loan is paid off or a related warrant or equity interest is sold. Revenue recognition in any given year can be highly concentrated in among several portfolio companies. For the years nine months ended September 30, 2014 and the year ended December 31, 2018 and 20172013, our ten largest portfolio companies represented approximately 28.228.9% and 34.629.3% of the total fair value of our investments in portfolio companies, respectively. At September 30, 2014 we had two investments that represent 5% or more of our net assets and at December 31, 2018 and December 31, 20172013, we had seven investments one investment that represented 5% or more of our net assets. At December 31September 30, 2018 and December 31, 20172014, we had five and nine equity investments representing approximately 53.075.1% and 67.1%, respectively, of the total fair value of our equity investments, and each represented 5% or more of the total fair value of our equity investments. No single portfolio investment represents more than 10At December 31, 2013, we had six equity investments which represented approximately 75.7% of the total fair value of our equity investments, and each represented 5% or more of the total investments as fair value of December 31, 2018 and 2017our equity investments. As of December 31September 30, 20182014, 100.0% of our debt investments were in a senior secured first lien position, and approximately 97.398.1% of the debt investment portfolio was priced at floating interest rates or floating interest rates with a Prime Prime-or LIBOR- LIBOR-based interest rate floor. As a result, we believe we are well positioned to benefit should when market interest rates continue to rise. In most cases, we collateralize our investments by obtaining a first priority security interest may rise in a portfolio company’s assets, which may include its intellectual property. In other cases, we may obtain a negative pledge covering a company’s intellectual property. As of December 31, 2018, approximately 85.3% of our debt investments were in a senior secured first lien position, with 48.5% secured by a first priority security in all of the assets of the portfolio company, including its intellectual property, 28.8% secured by a first priority security in all of the assets of the portfolio company and the portfolio company was prohibited from pledging or encumbering its intellectual property. 1.1% of our debt investments were senior secured by the equipment of the portfolio company, and 6.9% were in a first lien “last-out” senior secured position with security interest in all of the assets of the portfolio company, whereby the “last-out” loans will be subordinated to the“first-out” portion of the unitranche loan in a liquidation, sale or other disposition. Another 13.8% of our debt investments were secured by a second priority security interest in all of the portfolio company’s assets, and 0.9% were unsecurednear future. Our investments in senior secured debt with warrants have detachable equity enhancement features, typically in the form of warrants or other equity-related securities designed to provide us with an opportunity for capital appreciation. These features are treated as original issue discount and are accreted into interest income over the term of the loan as a yield enhancement. Our warrant coverage generally ranges from 3% to 20% of the principal amount invested in a portfolio company, with a strike price generally equal to the most recent equity financing round. As of December 31September 30, 20182014, we held warrants in 129 125 portfolio companies, with a fair value of approximately $26.7 22.4 million. The fair value of our warrant portfolio decreased by approximately $10.1 million37.1%, as compared to a fair value of $36.8 35.6 million at December 31, 2017, 2013 primarily related a slight decrease to the reversal of unrealized appreciation related to the exercise of our warrant positions in portfolio companies Box, Inc. ($8.3 million) and valuation Neuralstem, Inc. ($751,000) to preferred stock and unrealized depreciation related to collateral based impairments of the portfolioapproximately $2.9 million on nine of our warrant positions due to poor company performance. Our existing warrant holdings currently would require us to invest approximately $78.7 83.2 million to exercise such warrants as of December 31September 30, 20182014. Warrants may appreciate or depreciate in value depending largely upon the underlying portfolio company’s performance and overall market conditions. Of the warrants that which we have monetized since inception, we have realized warrant gain multiples in the range of approximately 1.02x 1.01x to 29.06x 14.91x based on the historical rate of return on our investments. However, our warrants may not appreciate in value and, in fact, may decline in value. Accordingly, we may experience losses not be able to realize gains from our warrant portfolio. Portfolio Grading We use an investment grading system, which grades each debt investment on a scale of 1 to 5, to characterize and monitor our expected level of risk on the debt investments in our portfolio with 1 being the highest quality. The following table shows the distribution of our outstanding debt investments on the 1 to 5 investment grading scale at fair value as of December 31, 2018 and 2017, respectively: (in thousands) December 31, 2018 December 31, 2017 Investment Grading Number ofCompanies Debt Investments at Fair Value Percentage of Total Portfolio Number ofCompanies Debt Investments at Fair Value Percentage of Total Portfolio 1 13 $ 311,597 18.0% 12 $ 345,191 24.4% 2 43 885,123 51.1% 32 583,017 41.2% 3 25 474,926 27.3% 32 443,775 31.3% 4 7 60,267 3.5% 4 41,744 2.9% 5 2 1,579 0.1% 5 2,257 0.2% 90 $ 1,733,492 100.0% 85 $ 1,415,984 100.0% As of December 31, 2018, our debt investments had a weighted average investment grading of 2.18 on a cost basis, as compared to 2.17 at December 31, 2017. Our policy is to lower the grading on our portfolio companies as they approach the point in time when they will require additional equity capital. Additionally, we may downgrade our portfolio companies if they are not meeting our financing criteria or are underperforming relative to their respective business plans. Various companies in our portfolio will require additional funding in the near term or have not met their business plans and therefore have been downgraded until their funding is complete or their operations improve. The slight increase in weighted average investment grading at December 31, 2018 from December 31, 2017 is primarily due to an overall decrease in positions with a credit rating of 1. At December 31, 2018, we had two debt investments onnon-accrual with a cumulative investment cost of approximately $2.7 million and zero fair value. At December 31, 2017, we had five debt investments on non-accrual with a cumulative investment cost and fair value of approximately $14.8 million and $340,000, respectively. The decrease in the cumulative cost and fair value of debt investments on non-accrual between December 31, 2018 and December 31, 2017 is the result of the liquidation of two debt investments that were on non-accrual at December 31, 2017, which resulted in a realized loss of approximately $10.3 million, slightly offset by a loan repayment in full from one debt investment.