Firsthand Technology Value Fund, Inc.
Climate Impact & Sustainability Data (2019, 2020, 2023)
Reporting Period: 2019
Environmental Metrics
Climate Goals & Targets
Environmental Challenges
- Limited operating history.
- Dependence on FCM’s key personnel.
- Investment Adviser and its management has limited experience managing a BDC.
- Investment Adviser and its management manage other funds.
- Investment Adviser may not be able to achieve the same or similar returns to those achieved by its investment professionals while they were employed at prior jobs.
- Highly competitive market for investment opportunities.
- Regulations governing our operation as a business development company will affect our ability to, and the way in which we, raise additional capital.
- Failure to maintain our status as a business development company would reduce our operating flexibility.
- Failure to invest a sufficient portion of our assets in qualifying assets could fail to qualify as a business development company or be precluded from investing according to our current business strategy.
- Non-diversified investment company.
- Need to raise additional capital to grow.
- Many of our portfolio investments will be recorded at fair value as determined in good faith by our Board of Directors. As a result, there will be uncertainty as to the value of our portfolio investments.
- Lack of liquidity in our investments may adversely affect our business.
- Fluctuations in quarterly results.
- Significant potential conflicts of interest that could impact our investment returns.
- Incentive fee may induce FCM to make speculative investments and these fees will, in effect, be borne by our common stockholders.
- Changes in laws or regulations governing our operations may adversely affect our business.
- Provisions of the Maryland General Corporation Law and of our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.
- Board of Directors may change our investment objective, operating policies, and strategies without prior notice or stockholder approval.
- Investments in prospective portfolio companies may be risky, and you could lose all or part of your investment.
- May invest in micro-cap public companies and companies we may hope will have successful initial public offerings.
- Expect to purchase securities in IPOs, which involve significant risks for us, and we may not be able to participate in offerings to the extent desired or at all.
- Economic recessions or downturns could impair our portfolio companies and harm our operating results.
- Failure to make follow-on investments in our portfolio companies could impair the value of our portfolio.
- Sometimes do not hold controlling equity interests in our portfolio companies and we may not be in a position to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our investments.
- Investment strategy focused primarily on privately held companies presents certain challenges, including the lack of available information about these companies, a dependence on the talents and efforts of only a few key portfolio company personnel, and a greater vulnerability to economic downturns.
- Portfolio companies may issue additional securities or incur debt that ranks equal or senior to our investments in such companies.
- May purchase or sell options on securities and indexes, which may expose us, and your investment in our common stock, to certain risks.
- Investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.
Mitigation Strategies
- Disciplined investment approach
- Focus on investments that can generate positive risk-adjusted returns
- Ability to source and evaluate transactions through the Investment Adviser’s research capability and established network
- Longer investment horizon with attractive publicly traded model
- Multi-step valuation process for non-publicly traded securities
- Engagement of an independent valuation firm
- Procedures to mitigate conflicts of interest
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Period: 2020
Environmental Metrics
Climate Goals & Targets
Environmental Challenges
- Competition for investments with larger entities with greater resources and different regulatory restrictions.
- Maintaining BDC status due to investment restrictions.
- Lack of liquidity in investments in private companies.
- Fluctuations in quarterly results due to portfolio performance, expenses, and market conditions.
- Potential conflicts of interest.
- Economic recessions or downturns impacting portfolio companies.
- Failure to make follow-on investments in portfolio companies.
- Lack of controlling equity interests in portfolio companies.
- Challenges associated with investing primarily in privately held companies (lack of information, dependence on key personnel, vulnerability to economic downturns).
- Portfolio companies issuing additional securities or incurring debt senior to our investments.
- Risks associated with purchasing or selling options on securities and indexes.
- Risks associated with investments in foreign securities.
- COVID-19 pandemic impacting the global economy and the Fund's investments.
Mitigation Strategies
- Disciplined investment approach focusing on risk-adjusted returns and extensive due diligence.
- Seeking to raise additional capital for growth.
- Employing hedging techniques to minimize currency risk (for foreign securities).
- Monitoring portfolio companies and conducting valuations.
- Implementing procedures to address potential conflicts of interest.
- Reserving cash for follow-on investments in portfolio companies.