Detroit Bear
Deep value, special situations, long-term horizon, value

Hercules Growth Technology: Great Dividend, But Too Expensive

Not long ago, I profiled a BDC by the name of Main Street Capital (NYSE:MAIN), which I described as a public bet on private equity. The stock has been pretty much flat, nevertheless, it piqued my interest in the broader business development company sector. While Main Street makes bets on energy and consumer companies, Hercules Technology Growth Capital (NYSE:HTGC) invests primarily in pharmaceutical and health care related firms with a much different risk profile than Main Street.

HTGC's Strategy

HTGC looks primarily at companies without a significant operating history, but it believes these firms have tremendous potential. Under the current SBA regulations, one may think HTGC's lending is restricted. From HTGC's 10-K:

"Under present SBA...
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