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BDCA Venture sells three portfolio companies

BDCA Venture has completed the sale of its entire position in three portfolio companies resulting in total cash proceeds of USD16.7 million and net realised gains of USD6.4 million during the fourth quarter of 2014.

TrueCar, Inc. (Nasdaq: TRUE) common shares were sold in open market transactions following the expiration of post-IPO lockup restrictions on 12 November 12, 2014 for net proceeds of USD6.5 million, resulting in a realis

On 18 November, 2014, Xtime, Inc, a private portfolio company, completed an all-cash merger transaction with Cox Automotive, Inc. At the closing of the merger, BDCA Venture received USD9.7 million in exchange for its Xtime preferred stock and common stock warrants, resulting in a realised gain of USD6.9 million. Separate from the USD9.7 million of cash proceeds received, BDCA Venture was required at the merger closing to set aside approximately USD809,000 in escrow as partial security for potential stockholder indemnification obligations under the merger agreement. The USD809,000 represents additional proceeds that may be released to the Company at a later date subject to potential indemnity claims. Based solely on the cash payment received at the merger closing, BDCA Venture would have a return multiple of 3.5x its investment cost over a holding period of 3.4 years, and a 41% gross IRR.

On 18 November, 2014, Stoke, Inc, a private portfolio company, was acquired by Mavenir Systems, Inc, a publicly traded company, in an all-cash merger. As part of the merger, BDCA Venture received approximately USD531,000 in exchange for its Stoke preferred stock and preferred stock warrants, resulting in a realized loss of USD4.0 million. Under the merger agreement, the Stoke preferred stockholders, including BDCA Venture, are obligated to indemnify the buyer for certain stockholder indemnification claims and, in certain cases, BDCA Venture’s potential liability for indemnity claims could exceed the cash consideration it received at the closing. Assuming no stockholder indemnification claims, BDCA Venture would have a return multiple of 0.1x its investment cost over an overall holding period of 2.5 years, and a negative 77% gross IRR.

Consistent with the Board of Directors’ intention to distribute to stockholders at least 100% of BDCA Venture’s total net realised gains for 2014, and based on projected realised gains or losses for the remainder of 2014, BDCA Venture’s estimated fourth quarter dividend would be approximately USD0.39 per share. However, the actual fourth quarter dividend may be greater or less than USD0.39 per share based on actual realized gains or losses for the remainder of 2014. BDCA Venture’s first, second and third quarter 2014 distributions totaled USD2.9 million, or USD0.30 per share.

“We are pleased to report that the estimated fourth quarter dividend of USD0.39 per share, together with the USD0.30 per share dividend previously paid in 2014, would represent our largest annual distribution to date,” stated Timothy J Keating, CEO. “Moreover, as the sales of existing equity investments are realised, we begin to free up capital to make debt investments in growth companies consistent with our new debt-focused investment strategy.”

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