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Good afternoon. My name is Jess, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hercules Capital Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference may be recorded. I will now turn the call over to Michael Hara, Managing Director of Investor Relations. Please go ahead, sir.

Thank you, Jess. Good afternoon, everyone, and welcome to Hercules conference call for the second quarter of 2025. With us on the call today from Hercules are Scott Bluestein, CEO and Chief Investment Officer; and Seth Meyer, CFO. Hercules financial results were released just after today's market close and can be accessed from Hercules Investor Relations section at investor.htgc.com. An archived webcast replay will be available on the Investor Relations web page following the conference call. During this call, we may make forward-looking statements based on our own assumptions and current expectations. These forward- looking statements are not guarantees of future performance and should not be relied upon in making any investment decision. Actual financial results may differ from a number of reasons, including, but not limited to, the risks identified in our annual report on Form 10-K and other filings that are publicly available on the SEC's website. Any forward-looking statements made during this call are made only as of today's date, and Hercules assumes no obligation to update any such statements in the future. And with that, I'll turn the call over to Scott.

Thank you, Michael, and thank you all for joining the Hercules Capital Q2 2025 Earnings Call. Hercules wrapped up the first half of 2025 by delivering another strong quarter of record fundings and record operating performance while maintaining our balance sheet strength and robust liquidity, allowing us to remain focused on high-quality originations. After originating over $1 billion of new commitments in Q1, our momentum continued in Q2 with our second consecutive quarter of originations of over $1 billion. Our record fundings led to $192.1 million of net debt portfolio growth in Q2 and a new record with over $461.9 million in the first half of 2025. During the second quarter, we took additional steps to further strengthen our balance sheet and liquidity position with the closing of our institutional investment-grade bond offering of $350 million of 6% unsecured notes due 2030. We also extended and upsized our credit facility led by MUFG to $440 million. Our staggered liability maturity stack, low cost of capital relative to our peers and ample liquidity across our platform, continues to put us in an advantageous competitive position. Post Q2, we announced the first close of our Adviser subsidiary's fourth private credit fund. Hercules Adviser LLC now manages 4 funds with approximately $1.6 billion in committed equity and debt capital. As a reminder, Hercules Adviser LLC is a wholly owned subsidiary of Hercules Capital, an internally managed BDC. And as a result, 100% of the earnings and value of that business benefit our public shareholders and stakeholders. Our strong Q2 performance was highlighted by several new records, including record total gross fundings of $709.1 million, an increase of 53.7% year-over-year; record total investment income of $137.5 million, an increase of 10% year-over-year; and record net investment income of $88.7 million or $0.50 per share, an increase of 7.7% year-over-year. Our first half performance was highlighted by several new records, including record first half 2025 total investment income of $257 million, record first half 2025 net investment income of $166.2 million, record first half 2025 total gross new debt and equity commitments of $2.02 billion and record first half 2025 total gross fundings of $1.25 billion. Our performance results are driven by our leadership position within the growth stage lending market. The longevity, consistency and scale of the Hercules Capital platform and our unwavering commitment to always doing what we believe is in the best interest of our shareholders and stakeholders. In our public comments during the first quarter of 2025, we noted that we anticipated a more favorable new business landscape broadly, and that we were positioning the business to be able to take advantage of that. It has played out largely consistent with our expectations. While the equity and credit markets have remained volatile, we have noted a general improvement in overall market sentiment subsequent to our last earnings call. Management teams appear less hesitant, investors are active and companies seem to be navigating the market choppiness and changing messaging from the current administration more effectively. We believe that certain sectors, geographies and end markets are positioned better right now, and our recent and near-term originations will reflect that. Despite strong originations and record fundings, we have maintained a conservative and defensive balance sheet. In Q2, we maintained our high first lien exposure, which remained at approximately 91% and continues to be towards the high end of our BDC peers. GAAP leverage decreased modestly to just over 90% -- 97% in Q2, down from 99.9% in Q1. Our Q2 GAAP level typical historical range of 100% to 115% and below the average of our BDC peers. We ended Q2 with over $1 billion of liquidity across our platform and no material near-term debt maturities, which we believe continues to position us very well. Let me now recap some of the key highlights of our performance for Q2. In Q2, we originated total gross debt and equity commitments of over $1 billion and record gross fundings of over $709 million. We generated record total investment income of $137.5 million and record net investment income of $88.7 million or $0.50 per share. We were able to achieve 125% coverage of our quarterly base distribution of $0.40 per share. We generated a return on equity in Q2 of 17.1%, and our portfolio generated a GAAP effective yield of 13.9% in Q2, which was relatively flat compared to Q1. Our balance sheet with moderate leverage and low cost of leverage remains very well positioned to support our continued growth objectives, and provides us with the ability to continue to focus on high-quality transactions versus chasing higher-yielding assets, which we believe have more risk. The focus of our origination efforts in Q2 was on maintaining a disciplined approach to capital deployment while being selectively aggressive on certain opportunities where we felt that we had a competitive advantage. Our Q2 originations activity were well balanced between life sciences and tech companies. In Q2, approximately 53% of our commitments and fundings were to life sciences companies, while approximately 47% of our commitments and fundings were to tech companies. We funded debt capital to 26 different companies in Q2, of which 11 were new borrower relationships. Year-to-date, through the end of Q2, we have added 20 new borrowers to the Hercules portfolio. We also increased our capital commitments to several portfolio companies during the quarter. Our available unfunded commitments were approximately $471.5 million, up slightly from $455.7 million in Q1. Since the close of Q2 and as of July 28, 2025, our deal teams have closed $44.2 million of new commitments and funded $33.5 million. We have pending commitments of an additional $480 million in signed nonbinding term sheets, and we expect this number to continue to grow as we progress in Q3. Q3 is historically our slowest quarter for new originations, and we expect that to be the case again this year. While that is typical for the venture and growth stage markets generally, we have chosen to be even more selective and patient recently given some of our recent market observations. In certain sectors, we have seen an abundance of liquidity and the desire for asset growth, leading to transactions that we do not believe reflect appropriate risk-adjusted returns. As we have always done, we intend to remain disciplined and focused on the long term, and we remain bullish on our pipeline and expectations for funding activity over the coming quarters. We are generally pleased with the exit activity that we saw in our portfolio during the second quarter. In Q2, we had 3 M&A events in our portfolio, which included 1 life sciences portfolio company and 2 technology portfolio companies announcing acquisitions. That brings us to 6 M&A events in our portfolio year-to-date through the end of Q2. In addition, we had 1 technology company complete their IPO in the quarter. Based on current market conditions and improving corporate sentiment, we expect exit activity to accelerate towards year-end. Early loan repayments increased as expected in Q2 to approximately $267 million. Even with the higher level of early loan repayments, we still achieved strong net debt portfolio growth given the record funding levels in the quarter, which continues to position us well for strong core earnings growth in the second half of 2025. For Q3 2025, we expect prepayments to be similar to Q2 and in the range of $200 million to $250 million, although this could change as we progress in the quarter. The credit quality of the debt investment portfolio improved quarter-over-quarter. Our weighted average internal credit rating of 2.26 decreased slightly from the 2.31 rating in Q1 and remains within our normal historical range. Our Grade 1 and Grade 2 credits increased to 62.9% compared to 61.1% in Q1. Grade 3 credits increased slightly to 34.7% in Q2 versus 33.9% in Q1. Our rated 4 credits decreased to 2.4% from 4.1% in Q1, and we did not have any rated 5 credits as of Q2 quarter end. In Q2, the number of loans and companies on nonaccrual decreased by 1. We had 1 debt investment on nonaccrual with an investment cost and fair value of approximately $9.8 million and $7.9 million, respectively, or 0.2% as a percentage of our total investment portfolio at cost and value. During the second quarter, we concluded our workout efforts with our 3 rated 5 loans from Q1, including Koros, a legacy loan that had been impaired and on nonaccrual status since Q2 of 2024. The resulting realized loss on those 3 positions was $6.5 million less than our previous quarter's impairment, and there was a positive impact to net asset value during Q2 as a result. With respect to our broader credit book and outlook, we generally remain pleased by what we are seeing on a portfolio level, and our portfolio monitoring remains enhanced. Given the ongoing uncertainty of the current tariff and trade-related environment, we continue to proactively assess any material impact across our credit portfolio. Based on what we know as of today and continued conversations with our borrowers, we continue to believe that none of our portfolio companies will be negatively impacted by the current tariff situation to a material degree. Our net asset value per share in Q2 was $11.84, an increase of 2.5% from Q1 2025. We ended Q2 with strong liquidity of $785.6 million in the BDC of liquidity across the Hercules platform. With healthy liquidity, a low cost of debt relative to our peers and 4 investment-grade corporate credit ratings, we remain well positioned to compete aggressively on quality transactions, which we believe is the prudent approach in the current environment. Venture capital investment activity continues to demonstrate a healthy pace with $69.9 billion invested in Q2 and $162.8 billion invested for the first half of 2025, according to data gathered by PitchBook-NVCA. M&A exit activity in Q2 for U.S. venture capital- backed companies was $32.2 billion. IPO activity improved, but remained muted during the second quarter. Consistent with the aggregate data for the ecosystem, during Q2, capital raising across our portfolio remained strong with 19 companies raising over $1.1 billion in new capital during the second quarter. For the first half of 2025, we've had 45 companies raise over $3.8 billion in new capital. Given our strong sustained operating performance, we exited Q2 with undistributed earnings spillover of $134.1 million or $0.74 per ending share outstanding. For Q2, we are maintaining our quarterly base distribution of $0.40 and our supplemental distribution of $0.07 per share for a total of $0.47 of shareholder distributions. Our Q2 net investment income covered our base distribution by 125% and our full distribution, including our $0.07 supplemental distribution by over 106%. This is our 20th consecutive quarter of being able to provide our shareholders with a supplemental distribution in addition to our regular quarterly base distribution. In closing, our scale, institutionalized lending platform and our ability to capitalize on a rapidly changing competitive and macro environment continues to drive our business forward and our operating performance to record levels. In Q2, Hercules delivered its ninth consecutive quarter of over $100 million of quarterly core income, which excludes the benefit of prepayment fees or fee accelerations from early repayments. Our success is attributable to the tremendous dedication, efforts and capabilities of our 100- plus employees and the trust that our venture capital and private equity partners place with us every day. We are thankful to the many companies, management teams and investors [ that ] choice. I will now turn the call over to Seth.

Thank you, Scott, and good afternoon, ladies and gentlemen. The second quarter for Hercules Capital was very busy across our balance sheet. As Scott shared, the business activity during the quarter [indiscernible] and record-breaking for our platform. To support the growth of our investment portfolio, we've added to the more than $325 million of capital raised in the first quarter by raising another $500 million split between $350 million of institutional 6% unsecured notes and nearly $150 million of highly accretive capital via our ATM. In addition, we increased our available liquidity by renewing our MUFG-led credit facility and upsizing it to $440 million based on strong demand. These activities helped us maintain our weighted average cost of debt at approximately 5% and our conservative leverage position remaining below 1:1 on both GAAP and a regulatory basis, supported by the full deployment of our most recent SBIC license. We continue to maintain strong available liquidity of more than $785 million as of quarter end and more than $1 billion across the platform, including the adviser funds managed by our wholly-owned subsidiary, Hercules Capital LLC. Based on the performance of the quarter, Hercules Adviser delivered a second quarter dividend of $2.1 million, which when combined with the expense reimbursement of $3.4 million resulted in approximately $5.5 million in NII contribution to the BDC in Q2. With that in mind, let's review the following areas: the income statement performance and highlights, the NAV, unrealized and realized activity, leverage and liquidity, and finally, the financial outlook. Turning to the income statement performance and highlights. Total investment income in Q2 was a record $137.5 million, a 15% quarter-over-quarter increase, supported by our debt portfolio that has grown to $4 billion as of the second quarter. Core investment income, a non-GAAP measure, increased to a record $124.6 million. Core investment income excludes the benefit of income recognized as a result of loan prepayments. Net investment income increased quarter-over-quarter 14.6% to $88.7 million or $0.50 per share in Q2. Our effective and core yields were 13.9% and 12.5%, respectively, compared to 13% and 12.6% in the prior quarter. As of quarter end, approximately half of our prime-based loans are at the contractual floor and thus the impact of any future rate reductions will be muted. Second quarter gross operating expenses were $52.2 million compared to $45.3 million in the prior quarter. Net of costs recharged to the RIA, our net operating expenses were $48.7 million. Interest expense and fees increased to $25.7 million due to the growth of the business and corresponding increase of leverage. SG&A increased to $26.5 million, above my guidance on the growth of the business. Net of costs recharged to the RIA, the SG&A expenses were $23 million. Our weighted average cost of debt increased slightly to 5%. Our ROAE or NII over average equity increased to 17.1% for the second quarter, and ROAA or NII over average total assets increased to 8.6%. Switching to the NAV activity. During the quarter, our NAV per share increased by $0.29 per share to $11.84 per share. This represents an NAV per share increase of 2.5% quarter-over-quarter. [indiscernible] was accretion due to use of the ATM. Our realized loss of $57.6 million was primarily the result of 3 previously impaired debt positions, 2 of which were on nonaccrual as of the first quarter. The [indiscernible] from these 3 positions was lower than the previous quarter impairment. Our $47.8 million of net unrealized depreciation attributable to $53.8 million of reversal of previous quarter depreciation mentioned earlier, $7 million of net unrealized depreciation attributable to valuation [indiscernible] privately and publicly held equity warrant and investment funds, including foreign exchange movements. This was a $13 million of net unrealized depreciation on debt investments primarily from collateral-based impairments on [indiscernible]. The reversal of prior unrealized depreciation resulted in a net realized loss of [indiscernible], primarily due to the losses on debt and warrant investments and losses from foreign exchange movements. On leverage and liquidity, our GAAP and regulatory leverage decreased to 97.4% and 81.1%, respectively, compared to the prior quarter due to the use of the ATM to support the growth in the balance sheet. Netting out leverage with cash on the balance sheet, our net GAAP and regulatory leverage was 95% and 78.7%, respectively. We ended the quarter with a little over -- more than $785 million of available liquidity. As a reminder, this excludes capital raised by the funds managed by our wholly-owned RIA subsidiary. Inclusive of these amounts, the Hercules platform had more than $1 billion of available liquidity. The strong liquidity positions us very well to support our existing portfolio companies and source new opportunities. As mentioned, in June, Hercules Capital issued $350 million of institutional 6% unsecured notes due in 2030 and renewed and increased our credit facility led by MUFG to $440 million. As a final point, we continued to opportunistically access the ATM market during the quarter and raised approximately $149 million in the second quarter, resulting in $0.28 NAV per share. On the outlook, for the third quarter, we expect our core yield to be at the high end of our guidance range of 12% to 12.5%, excluding any future benchmark interest rate changes. As a reminder, 98% of our debt portfolio is floating with a floor and presently, approximately 50% of our prime-based portfolio is at its contractual floor. Although difficult to predict, as communicated by Scott, we expect $200 million to $250 million in prepayment and activity in the third quarter. We expect our third quarter interest expense to increase compared to the prior quarter based on the debt portfolio growth during the first half of the year. For the third quarter, we expect SG&A expenses of $24 million to $25 million and an RIA expense allocation of approximately $3 million. Finally, we expect a quarterly dividend from the RIA of approximately $1.9 million to $2.1 million per quarter. In closing, the steps we have taken to strengthen our balance sheet will help us continue scaling our platform and ensure we are well positioned for the remainder of 2025. I will now turn the call over to the operator to begin the Q&A portion of our call. Jess, over to you.

[Operator Instructions] We will take our first question from Crispin Love with Piper Sandler.

Your debt fundings have been extremely strong year-to-date. On the fundings outlook or commentary, you seemed a little cautious on the immediate near term, but positive on longer-term funding. So as you look forward to the fourth quarter and into '26, do you think funding levels that you put up late last year and the beginning of this year, are those types of levels attainable based on what you're seeing today? Or any reasons why you may pull back for an extended period of time on the funding basis?

Thanks for the question, Crispin. No sense that there's going to be a pullback. I think what we did in the second half of last year is likely indicative of what we'll do in the second half of this year. Q3 is typically, as we've mentioned several times, several years in a row, our slowest quarter. In addition to it just being sort of a seasonally slow Q3, we have pulled back slightly to start the quarter just given some of the observations that we're making in terms of the current market environment. But we are very bullish with respect to our overall funding activity for the second half of this year, and we expect to end 2025 with both record fiscal year commitments and record fiscal year gross fundings.

Great. I appreciate that, Scott. And then just building on that a little bit, can you discuss the competitive environment you're seeing in venture lending from other nonbanks as well as the bank space? Have you seen meaningful changes in the landscape? You alluded to -- or I believe you did a little bit that some lenders might be behaving a little bit irrationally in the third quarter. Is that right? And if so, can you just dig a little bit deeper into that?

Sure. I would not characterize what we're seeing necessarily as anything specific to banks or nonbanks. We continue to see certain banks that we compete with from time to time. We also, as I think you now, Crispin, we continue to partner with certain commercial banks for certain profile of transaction. On the nonbank side, we've seen a handful of lenders recently, particularly in certain sectors, be very aggressive with respect to a lack of structure and a willingness to go well below our threshold from a yield perspective. And so that's what has caused us to be a little bit more patient to start Q3. We don't think that's a permanent shift. We think that's largely a result of just an abundance of liquidity in the system and some managers desperate for asset growth. We've always taken a long-term approach to the space. That's what we're going to continue to do. We're still finding pockets. We expect Q3 to be strong, but seasonally slow, and we expect the second half of the year to be strong from my earlier comments.

[Operator Instructions] We will go next to Brian Mckenna with Citizens.

And first off, just congrats on another impressive quarter here. The business has clearly inflected in terms of size and scale. And I think results the last couple of quarters also highlight the meaningful share you've taken within the industry. But I'm curious, as you reach these new levels of scale and as the business continues to perform incredibly well, I mean, what does all of this mean for attracting and retaining top talent? I'm assuming it's been a very positive dynamic, and you'll continue to hire at a strong clip, but any thoughts here would be great.

Sure. Thanks for the comment and the compliment, Brian, certainly appreciate it. Our culture continues to be of utmost important to us. I think if you look at this business, particularly over the last 5-plus years, we've done a tremendous job in terms of not only attracting talent to the platform, but retaining the strong talent that we have. And that will continue to be a focus for us. We have a really high bar with respect to new hires, particularly at the senior level. We're not afraid to make new hires, but we are very selective when we do so. If you think about sort of the environment, particularly over the last 2 to 3 years in the immediate aftermath of the SVB situation, we hired a handful of individuals who have been very accretive to the platform. Over the last year or so, we've added some significant senior talent to the originations team in certain markets. And then we just recently year-to-date have continued to do so selectively. So continuing to focus on finding the right talent to add to the platform, focused on particular sectors, focused on particular geographies, but maintaining a corporate culture where our employees want to be here, want to stay with the platform and want to continue to help us drive the company forward is of the utmost importance to us.

Okay. That's really helpful. I appreciate it, Scott. And then just on the RIA, it's great to see the first close for fund 4. Just a few related questions to that, if you have detail here. How much equity capital did you raise in the first close? And then what's the hard cap or target for that fund? Of the $1.6 billion of AUM that RIA is now managing, how much of that is equity capital versus debt? And then just a little bit bigger picture, looking at the platform today, the existing infrastructure and the team in place, I mean, how much more AUM can you manage longer term?

Sure. So a couple of questions there, Brian. Consistent with our approach to funds 1, 2 and 3, given that it is a wholly-owned subsidiary underneath the BDC, we do not disclose individual equity commitments or debt commitments per fund. What we do disclose is the aggregate number when we have certain meaningful events. So as of the most recent data that we've publicly disclosed, between the 4 funds, we have approximately $1.6 billion of committed equity and debt capital. I think we've been pretty clear that the leverage in our private fund business is generally consistent with the leverage in our public BDC business. So if you would sort of back into what the equity commitments are versus what the debt commitments are, we continue to think that the private fund platform and vehicle is a tremendous growth opportunity for us. It is flexible capital. We are raising money from strong long-term institutional investors. We continue to see opportunities to raise capital, and we will continue to do so as long as we think we can prudently put it to work. Given that the BDC is internally managed, this has never been and will never be a growth at all cost mentality. But if we see pockets, if we see opportunities to deliver strong risk-adjusted returns for our investors, we'll take advantage of that.

We'll go next to Cory Johnson with UBS.

This is actually Doug Harter from UBS. Given your comments about the strong pipeline for funding in the second half, can you talk about kind of how you think about funding that, whether that be through increasing leverage from current levels or using the ATM or both?

Sure. So I think we're in really good position, Doug, with respect to liquidity. If you look at just the BDC, ended Q2 with $785 million of available liquidity. If you look at it across the platform, inclusive of the private fund business, a little bit over $1 billion of liquidity. We ended the quarter sub-100% from a GAAP leverage perspective. We ended the quarter sub-82% from a regulatory leverage perspective. So no imminent plans to raise additional capital. We think the business is very well capitalized, strong balance sheet, very conservative balance sheet, and that should put us into a position to, again, gradually take leverage up. And if we see pockets of opportunity to deploy more capital than our current pipeline shows, obviously, we have the ATM. But we are very sensitive to using the ATM despite where the stock trades. We use the ATM on an as-needed basis to maintain our leverage ratios. Right now, we're a little bit underlevered relative to where we would like to be. So we would anticipate taking that leverage ratio up back to that 100%, 105% range before using the ATM again.

Just to clarify that last comment, that $100 million, $105 million, is that on a GAAP basis or a regulatory basis?

That's a GAAP basis.

We'll go next to Casey Alexander with Compass Point.

That was my question. My question was just asked and answered.

We'll go next to Finian O'Shea with Wells Fargo.

Just hitting on a couple of smaller items in the details. In recent periods, it looks like there's a lot less equity co-investment and also less principal repayment. So seeing the trends there if you're, to a lesser extent, investing in or lending to amortizing structures as is the case historically and whether or not you find the equity co-invest attractive?

Sure. Thanks, Fin. So with respect to amortization in principle, I would make sort of 2 comments. Number one, over the last 2 to 3 years, initial interest-only periods have extended slightly relative to where they once were. So that's certainly a component. The other component is in the majority of transactions that we do, we allow our portfolio companies to earn interest-only extensions based on specific preset performance milestones. Thankfully, many of our companies continue to achieve those preset milestones. As those companies achieve those milestones, they're able to earn into additional interest-only extensions. So we look at that as an indicator of strong performance across the portfolio. And then with respect to the second point, we have been a little bit more judicious with respect to equity investments, with respect to RTIs, with respect to co-investments. And that's just largely been a function of valuation relative to our assessment. We think the market has become relatively frothy from an equity perspective. Where we see pockets of opportunity in the portfolio, we are continuing to make equity investment decisions, but we're just being a little bit more judicious in terms of equity investments in the current environment.

Okay. That's helpful. And just sort of tying in there, like if there's a frame of time where you don't do equity co-invest, is there -- is the ATM in part a tool to shore up NAV as it has been to some extent in the last few years?

We don't think about it that way. We think of the ATM as something that we can use sporadically to help us maintain a strong, conservative, defensive balance sheet. We don't use the ATM to drive net asset value.

[Operator Instructions] We will go next to Christopher Nolan with Ladenburg Thalmann.

And apologies if I missed it, but given all the changing currents with all the tariffs and these tariff deals announced, how does Hercules stand to benefit given many of these countries are going to be supposedly making large dollar investments into the United States?

Yes. I think it's a great question, and it's something we've spent a lot of time thinking about as an organization. I think our current assessment, and this can change daily just based on the changing messaging. But our current assessment is that the biggest driver of positivity for our portfolio companies will be increased interest and investment in the United States. In a lot of these tariff deals or trade deals or just deals in general, you're seeing things announced where these countries are committing to certain investments in U.S. infrastructure, U.S. technology, et cetera. And so we think just from a portfolio perspective, the increased investment into the U.S. markets will be a net positive for technology-oriented growth stage businesses broadly.

Okay. And then for my follow-up for Seth. Congratulations on the low coupon for the $350 million raise. Has there been any sort of changes on the advance rates?

Yes. Thanks a lot, Chris. So it isn't a new. It's an extension of an existing. We just upsized it as well. And MUFG and the other lenders have worked with us to actually improve the conditions each and every time we renew the facility and improve the availability for us. So there's no change in the advance rates, although there are categories associated with it where they give us a better opportunity to increase the overall average advance rate.

We'll go next to Paul Johnson with KBW.

Most of might have been asked, but I just ask with the recent IPO activity, understanding that the [indiscernible] issuance is still at a pretty low level, but it's still recovering. But with performance that we've seen CoreWeave, Cicle, [indiscernible], Figma, do you think that that's changed sort of BC's mindset in terms of kind of the exit pathway and potentially looking closer at the IPO route versus just the buyout, even if it means potentially like a lower multiple than kind of where the peak valuation was?

Yes, it's a great question. I think our assessment is that it's still too early to make that assessment. We did see some improvement in terms of you mentioned a couple of the names, including the one from today. But that's really early just in terms of sort of that projecting out to be an indicator of what's to come and what's going to change potentially with respect to VC sentiment. This does conclude today's Hercules Capital Second Quarter 2025 Financial Results Conference Call. You may now disconnect your Our perspective is the bar right now continues to be really high for successful IPOs for growth stage companies. And so when you look at the sort of the types of companies that are going public, it's really the top of the top in terms of quality. So when we think about sort of the broader markets, I think we continue to view the M&A market as likely the largest driver going forward of exit year.

I'm showing no further questions. I would now like to turn the call back over to Scott Bluestein for any closing remarks.

Thank you, Jess, and thanks to everyone for joining our call today. We look forward to reporting our progress on our Q3 2025 earnings call.