#1February 23, 2021 FOURTH QUARTER 2020 INVESTOR PRESENTATION Financing the Growth of Tomorrow's Companies Today™ Xercules CAPITAL HTGC LISTED NYSE#2IMPORTANT NOTICE: FORWARD LOOKING STATEMENTS This presentation may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act. The information disclosed in this presentation is made as of the date hereof and reflects Hercules' current assessment of its financial performance for the period reported. Actual financial results filed with the Securities and Exchange Commission in the future may differ from those contained herein in the event of additional adjustments recorded prior to the filing of its financial statements. This presentation may contain "forward-looking statements." These forward-looking statements include comments with respect to our financial objectives, loan portfolio growth, strategies and results of our operations. However, by their nature, these forward-looking statements involve numerous assumptions, uncertainties and risks, both general and specific. The risk exists that these statements may not be fulfilled. We caution readers of this presentation not to place undue reliance on these forward-looking statements as a number of factors could cause future Company results to differ materially from these statements. Forward-looking statements may be influenced in particular by factors such as fluctuations in interest rates and stock indices, the effects of competition in the areas in which we operate, and changes in economic, political and regulatory conditions. We caution that the foregoing list is not exhaustive. When relying on forward-looking statements to make decisions, investors should carefully consider the aforementioned factors as well as other uncertainties and events. Historical results discussed in this presentation are not indicative of future results. This presentation should be read in conjunction with our recent SEC filings. Xercules. CAPITAL 2#3(1) HERCULES CAPITAL Structure IPO Date Internally Managed Business Development Company (BDC) June 9, 2005 HTGC (NYSE) - Common Stock Institutional Notes PAR $1000.00 Investment Options • 4.625% Notes due 2022 • 4.77% Notes due 2024 • 4.28% Notes due 2025 . . 4.31% Notes due 2025 4.50% Notes due 2026 Retail Notes (Baby Bonds) PAR $25.00 . . HCXY (NYSE) 6.25% Notes due 2033 HCXZ (NYSE) 5.25% Notes due 2025 Convertible Notes • 4.375% Notes due 2022 Securitization Notes • 4.605% Asset-backed Notes due 2027 . 4.703% Asset-backed Notes due 2028 (1) Annualized Dividend Yield¹ Distributions Declared Price to NAV Annualized based on the $0.32 distribution declared for Q4 2020 and a closing stock price of $14.42 as of December 31, 2020 8.9% as of December 31, 2020 $0.32 per share for Q4 2020 $0.05 per share supplemental for Q4 2020 1.39x February 19, 2021 ~1.1x to ~1.5x historical range Xercules. CAPITAL 3#4FOURTH QUARTER 2020 INVESTOR PRESENTATION ○ Key Performance Highlights ○ Company & Strategic Overview ○ Financial Highlights O Portfolio Highlights ○ Venture Capital Market Opportunity ○ Analyst Coverage ○ Supplemental Information#5KEY PERFORMANCE HIGHLIGHTS Xercules CAPITAL#6Robust Earnings Strong Shareholder Returns Q4 2020 HIGHLIGHTS · • • Net Investment Income ("NII") of $42.2M, up 5.1% Y-Y Total Investment Income of $75.3M, up 6.7% Y-Y NII per share of $0.37 and 116% distribution coverage 1YR/3Yr/5YR Total Shareholder Returns (¹): 12.0%/38.8%/69.7% • ROAE (1,2): 13.9% • ROAA (1,2): 6.6% . Net Interest Margin ("NIM"): 10.3% High-Yield Portfolio of Earning Assets Industry-Leading Originations Platform Strong Liquidity and Balance Sheet Strong Capital Raising Position • Total Debt Investments (at cost): $2.10B • Total Investments (at cost): $2.32B • • • . · • • Effective Yield: 13.3% $11.1B in total debt commitments since inception Cumulative Total Net Realized (Loss) since inception of ($79.7M) or annualized loss rate of 4.5 basis points Total debt & equity commitments: $150.8M Debt & equity fundings: $129.8M $673.3M available liquidity (subject to existing terms and covenants) GAAP and regulatory leverage: 100.6% and 93.0% (3) Price-to-NAV: 1.39x (4) "ATM" Equity Distribution Agreement Investment Grade Credit Ratings: DBRS: BBB | KBRA: BBB+ (1) Source: S&P CaplQ as of 12/31/20 (2) Based on NII, excludes realized and unrealized gains/losses (3) Regulatory leverage is defined as GAAP leverage excluding SBA debentures (4) As of February 19, 2021 Xercules. CAPITAL 6#7TOTAL SHAREHOLDER RETURN (TSR) vs. BDCS & WELLS FARGO INDEX 100% 80% 60% 40% 20% cho 12.0% 38.8% 1.4% 5.7% 69.7% 31.9% 31.6% 41.3% 16.3% 5.9% 0% -10.2% -11.2% -20% -40% 1- Year 3-Year HTGC Peer Group(a) 5-Year I Wells Fargo BDCS Index (a) Peer Group: AINV, ARCC, BKCC, OCSL, FSK, GBDC, GSBD, MAIN, NMFC, OXSQ, PNNT, PSEC, SLRC, BBDC, TCPC, FCRD, TSLX (b) TSR is defined as stock appreciation plus distributed dividend distributions Source: S&P Capital IQ as of December 31, 2020 Xercules. CAPITAL 7-Year 7#8Cumulative Distributions Paid (per Share) 8% 7% DELIVERING STRONG SUSTAINABLE SHAREHOLDER RETURNS Return on Average Assets % (ROAA) 18% 16% 14% Return on Average Equity % (ROAE) 6% 5% 6.1% 6.1% 5.8% 7.2% 4% 6.3% 5.7% 6.8% 5.7% 3% 7.3% 4.3% 2% 3.7% 6.6% 12% 10% 8% 11.7% 11.3% 12.6% 10.4% 12.0% 13.6% 9.6% 10.2% 6% 15.4% 8.5% 8.1% 13.9% 4% 1% 2% 0% 0% 2015 2016 2017 IHTGC 2018 ■Peer Group (a) 2019 Q4 2020 2015 2016 2017 2018 2019 Q4 2020 HTGC ■Peer Group(a) Source: S&P Capital IQ as of 12/31/20 for HTGC and Peer Group. Return on Average Assets excluding cash. NII divided by average of beginning of period total assets excluding cash and end of period total assets excluding cash. Source: S&P Capital IQ as of 12/31/20 for HTGC and Peer Group. Return on Average Equity based on NII. NII divided by average of beginning of period equity and end of period equity. (a) Peer Group: AINV, ARCC, BKCC, OCSL, FSK, GBDC, GSBD, MAIN, NMFC, OXSQ, PNNT, PSEC, SLRC, BBDC, TCPC, FCRD, TSLX (1) Q1 09 distribution was paid in 10% cash and 90% stock $18 $18.05 per share or ~$1.10 Billion in Historical Cumulative Distributions Since June 2005 IPO $0.40 $16 $17.50 $17.82 $16.22 $14 $14.95 $0.30 $12 $13.71 $12.47 $10 $11.23 $0.20 $8 $9.99 $8.75 $6 $7.64 $6.69 $0.10 $0.10 $4 $5.81 $2 $1.23 $3.75 $0.33 $2.43 $5.01 $0.04 $0.06 $0.05 $0.02 $0 $0.00 (1) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 2021 Base Distribution Supplemental Distribution Note: The Yield Calculation may include a potential tax return of capital. Any portion of a distribution that is ultimately deemed to be a tax return of capital should not be considered. The determination of the tax attributes of the Company's distributions is made annually as of the end of the Company's fiscal year based upon its taxable income for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of its distributions for a full year. The tax attributes of its distributions for the years ended December 31, 2008 through December 31, 2020 were paid 100% from earnings and profits; however, there can be no certainty to shareholders that this determination is representative of the tax attributes of the Company's 2021 full year distributions to stockholders. Xercules. CAPITAL 8 Supplemental Distributions Paid (per Share)#9AVAILABLE LEVERAGE FOR POTENTIAL EARNINGS GROWTH Leverage to Return on Average Equity % (ROAE)" (1) 16% 14% 115.0% 140% 120% 102.6% 12% 101.8% 100.6% 95.5% 100% 87.0% 84.7% 10% 84.7% 72.9% 83.4% 8% 96.2% 93.0% 80% 77.6% 60% 6% 60.6% 62.0% 4% 2% 12.6% 12.0% 13.6% 15.4% 0% 2016 2017 2018 2019 ROAE GAAP Leverage 40% 20% 13.8% 0% Q4 2020 -Regulatory Leverage (2) Net Regulatory Leverage (3) (1) Source: S&P Capital IQ as of 12/31/20. Return on Average Equity based on NII. NII divided by average of beginning of period equity and end of period equity. (2) Excludes SBA (3) Excludes SBA and cash Xercules. CAPITAL 9#10(a) Net Asset Value (NAV) HERCULES CONSISTENTLY MAINTAINS A PREMIUM TO NAV CREATES A STRONG CAPITAL RAISING POSITION TO SUPPORT GROWTH 1.5 1.43 $16 1.4 1.32 1.33 1.27 1.3 $14 1.23 1.2 1.11 1.1 $12 0.96 0.86 0.86 0.96 1 0.84 0.9 0.92 0.8 $10 0.7 0.6 $9.94 $9.90 $9.96 $9.90 $10.55 $11.26 $8 0.5 2015 2016 2017 2018 2019 Q4 2020 (a) Hercules NAV Hercules Price to NAV Peer Group Price to NAV Peer Group: AINV, ARCC, BKCC, OCSL, FSK, GBDC, GSBD, MAIN, NMFC, OXSQ, PNNT, PSEC, SLRC, BBDC, TCPC, FCRD, TSLX Price to NAV Source: S&P CaplQ as of 12/31/20 for HTGC and Peer Group. Stock price based on closing price on last trading day of each calendar year or relative quarter. Xercules. CAPITAL 10 Price to NAV Multiple (x)#11$300 Total Investment Income ($ in millions) $250 $200 $150 15.3% CAGR $100 $50 $79.9 $97.5 $139.7 $143.7 $157.1 $175.1 HERCULES KEY PERFORMANCE HIGHLIGHTS $190.9 $0 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $587.4 $0 2011 Total Investments at Cost ($ in millions) 16.5% CAGR $207.8 $267.9 $287.3 $2,600 $2,400 $2,200 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $160 $140 Net Investment Income "NII" ($ in millions) $120 $100 $80 16.5% CAGR $60 $40 $20 $39.6 $48.1 2011 2012 2013 2014 2015 2016 $73.1 $71.8 $73.5 $100.3 $96.4 $108.7 $143.3 $157.1 Total Assets ($ in millions) 15.0% CAGR 2017 2018 2019 2020 $914.3 $906.3 $1,035.3 $1,252.3 $1,511.5 $1,619.8 $1,980.5 $2,402.0 $2,315.4 2012 2013 2014 2015 2016 2017 2018 2019 2020 $0 Xercules. CAPITAL $747.4 $1,123.6 $1,221.7 $1,299.2 2011 2012 $1,464.2 8 $1,324.0 $1,654.7 $1,945.2 $2,462.0 $2,624.0 2013 2014 2015 2016 2017 2018 2019 2020 11#12$ in billions PORTFOLIO GROWTH WITH UNDERWRITING DISCIPLINE Cumulative Debt Commitment and Fundings, Since Inception $12 $11 $10 $9 $8 $7 $6 HTGC $5.7 $4.9 $5 IPO $4.0 $4.2 $4 $3.4 $3.5 $2.7 $2.9 $3 $2.1 $2.4 $2 $1.4 $1.5 $1.9 $1.5 $1 $0.2 $0.2 $0.5 $0.4 $0.9 $1.1 $1.2 $0.7 $0 2005 2006 2007 $11.1 $9.9 $8.5 $8.3 $7.6 $7.3 $6.5 $6.5 $5.6 $4.9 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Cumulative Commitments Cumulative Fundings Cumulative Total Aggregate Net Realized Gains/(Losses), Since Inception $80 70 50.3 44.2 $60 ר ז 50 $ in millions 30.9 $40 17.3 30 8.9 $20 0.0 2.2 0.0 0.0 2.0 1.0 0.0 3.0 3.0 4.5 1.6 10 $0.5 $1.7 $0 $4.3 ($1.1) ($26.5) ($52.9) ($50.1) ($47.0) ($32.1) ($12.0) ($6.9) ($2.3) ($29.0) ($40.1) ($23.6) ($79.7) -10 -$20 -30 -$40 -50 -$60 -$80 -70 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q4 2020 Net Realized Loss Carry Forward Annualized Loss Rate (bps)(a) (a) When compared to total new debt commitments during the same period Xercules. CAPITAL 12#13COMPANY & STRATEGIC OVERVIEW Xercules CAPITAL#14HERCULES AT-A-GLANCE LARGEST BDC FOCUSED ON PROVIDING FINANCING TO HIGH-GROWTH VENTURE CAPITAL-BACKED COMPANIES $1.78 BILLION MARKET CAPITALIZATION $2.10 BILLION DEBT INVESTMENT PORTFOLIO 100 COMPANIES WARRANT & EQUITY PORTFOLIO $673.3 MILLION LIQUIDITY & BALANCE SHEET AVAILABLE LIQUIDITY TO INVEST (2) FOUNDED DECEMBER 2003 IPO: June 2005 ❝HTGC" ENTERPRISE VALUE $3.05 billion (1) MARKET CAPITALIZATION $1.78 billion (¹) NET ASSET VALUE PER SHARE $11.26 as of 12/31/20 HISTORICAL PRICE/NAV ~1.1x to ~1.5x range CURRENT PRICE/NAV 1.39x (¹) DEBT INVESTMENT COST BASIS $2.10 billion DEBT INVESTMENT FAIR VALUE $2.10 billion EFFECTIVE YIELD 13.3% DEBT INVESTMENTS IN 97 companies SHORT TERM MATURITIES 36-42 months INVESTMENT SIZE $5 to $200 million (1) Source for Enterprise Value and Market Capitalization is S&P Capital IQ as of February 19, 2021 (2) Subject to existing terms and covenants WARRANT HOLDINGS IN 100 companies EQUITY HOLDINGS IN 59 companies TOTAL WARRANT AND EQUITY GAAP COST $215.6 million TOTAL WARRANT AND EQUITY FAIR VALUE $259.3 million Xercules. CAPITAL $673.3 million GAAP LEVERAGE 100.6% 93.0% ex. SBA INVESTMENT GRADE RATINGS Moody's: Baa3 DBRS: BBB KBRA: BBB+ SECURITIZATION INVESTMENT GRADE RATINGS KBRA: A(sf) 14#15WHY IS HERCULES DIFFERENT THAN OTHER BDCS WE INVEST IN INNOVATIVE VENTURE GROWTH-STAGE COMPANIES What We Don't Do ■No direct oil and gas exposure ■No CLO exposure ■No CMBS or RMBS exposure ■ No metals or minerals exposure What We Do ■ We focus primarily on pre-IPO and M&A, innovative high-growth venture capital backed companies at their expansion (venture growth) and established stages in a broadly diversified variety of technology, life sciences and sustainable and renewable technology industries Highly asset sensitive debt investment portfolio - 96.9% floating rate loans and with interest rate floors(1) ■ We are generally the only lender and 84.2% are "true" first lien senior secured (¹) ■ The majority of our debt investments include warrants for potential additional total return ■ Substantially all of our debt investments have short term amortizing maturities (36-42 months) ■ Focused on strong and sustainable shareholder returns ■ Disciplined, proven investment philosophy with over 16 years of strong credit performance history (1) As of December 31, 2020 Xercules. CAPITAL 15#16STRATEGIC ACCESS TO EQUITY AND DEBT CAPITAL MARKETS HERCULES' SUCCESSFUL ATM DISTRIBUTION PROGRAM Hercules' At-the-Market "ATM" Equity Distribution Agreement Equity Distribution Agreement: Up to a total of 16.5 million shares of common stock The Benefits and Competitive Advantages ■ "Just-in-Time” access provides control on the timing, pricing and amount of capital raised, with full control over leverage ratios ■ Ideal for raising growth capital when needed, proceeds expeditiously invested in new investments ■ Exceptionally low and cost-effective access to capital markets ■ Equity issuances can be highly accretive to NAV when HTGC trades at a premium to NAV The Results ■ Equity ATM Program FY 2020: sold ~ 6.3 million shares for total net proceeds of ~ $77.2 million ◉ Equity ATM Program FY 2019: sold ~ 4.6 million shares for total net proceeds of ~ $62.7 million Xercules. CAPITAL 16#17WE ARE AT CENTER STAGE OF THE INNOVATION ECONOMY HERCULES HAS DOMAIN EXPERTISE IN FIVE SPECIALIZED LENDING GROUPS "WE ARE NOT GENERALISTS" CPU Technology Life Sciences SaaS Financing Sustainable and Renewable Technology Special Situations We Invest at the Expansion "Venture Growth" and Established Stage $11.1 billion in total debt commitments to over 520 companies since inception Offices in key venture capital markets: CA | MA | NY | DC | IL | CT Over 1000 different VC & PE firms, financial investors Over 190 portfolio companies completed/announced an IPO or M&A event since inception Xercules. CAPITAL 17#18FINANCIAL HIGHLIGHTS Xercules CAPITAL#19INCOME STATEMENT: Q4 2020 VS. Q4 2019 SUMMARY RESULTS ($ in 000's, except per share amounts) Interest Income Fee Income Total Investment Income Interest and Loan Fees General and Administrative Employee Compensation Total Operating Expenses Other Income Pre-Tax Net Investment Income-NII Three Months Ended December 31, 2020 2019 Year/Year (unaudited) (unaudited) Change $ 68,245 $ 66,086 3% 7,087 4,491 58% 75,332 70,577 7% 17,191 15,954 8% 5,982 5,092 17% 9,997 9,432 6% 33,170 30,478 9% 42,162 40,099 5% Total Net Realized and Unrealized Gain/Loss 109,010 4,512 Net Increase (Decrease) in Net Assets from Operations 151,172 44,611 239% NII - Net Investment Income per Share (Basic) $ 0.37 $ 0.38 -3% Weighted Average Shares Outstanding - Basic 113,898 105,634 8% Xercules. CAPITAL 19#20CURRENT AND HISTORICAL INCOME STATEMENTS Twelve Months Ended December 31, 2020 2019 ($in 000's, except per share amounts) Year/Year Change Interest Income Fee Income Total Investment Income Interest and Loan Fees General and Administrative Employee Compensation Total Operating Expenses Other Income Pre-Tax Net Investment Income-NII $ 263,379 $ 23,879 247,513 6% 20,361 17% 287,258 267,874 7% 66,874 61,674 8% 23,195 19,183 21% 40,049 41,519 -4% 130,118 124,602 4% 157,140 143,272 10% Total Net Realized and Unrealized Gain/Loss 70,121 30,326 Net Increase (Decrease) in Net Assets from Operations 227,261 173,598 31% NII - Net Investment Income per Share (Basic) $ 1.39 $ 1.41 -1% Weighted Average Shares Outstanding - Basic 111,985 101,132 11% Xercules. CAPITAL 0 20#21CURRENT & HISTORICAL BALANCE SHEET ($ in 000's, except per share amounts) ASSETS Total Investments Cash and cash equivalents Restricted cash Interest receivable Other assets Total Assets LIABILITIES Accounts Payable and Accrued Liabilities Long-term SBA Debentures 2022 Notes July 2024 Notes February 2025 Notes April 2025 Notes June 2025 Notes March 2026 A Notes 2033 Notes 2027 Asset-Backed Notes 2028 Asset-Backed Notes 2022 Convertible Notes Credit Facilities Total Liabilities Net Assets Shares Outstanding Net Assets per Share Xercules. CAPITAL December 31, December 31, 2020 2019 2,354,078 $ 2,314,526 198,282 64,393 39,340 50,603 19,077 20,207 13,220 12,239 $ 2,623,997 $ 2,461,968 45,655 41,844 98,176 148,165 149,039 148,514 103,942 103,685 49,522 73,351 72,970 69,272 49,550 38,610 38,501 178,812 197,312 247,647 247,395 228,177 226,614 103,919 $ 1,332,293 $ 1,328,919 $ 1,291,704 $ 1,133,049 114,726 107,364 $ 11.26 $ 10.55 21#22Effective Yield EFFECTIVE YIELD VS. CORE YIELD - LEADS TO STRONG EARNINGS MEDIAN CORE YIELD FROM Q1 2017 TO Q4 2020: 12.4% 18% 16% 14% 13.4% 14.9% 14.1% 14.2% 14.3% 14.3% 13.5% 13.5% 13.5% 13.4% 13.6% 13.0% 13.0% 13.3% 12.6% 12.2% 12% 12.9% 12.6% 12.5% 12.7% 12.7% 12.7% 12.7% 12.2% 12.4% 12.1% 12.3% 11.9% 11.8% 11.8% 11.5% 11.3% 10% 10.4% 10.4% 10.1% 10.3% 10.3% 10.2% 10.1% 9.6% 9.8% 9.3% 9.5% 9.5% 8% 8.9% 9.3% 9.2% 9.3% 6% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 GAAP Effective Yield (1) Q4-18 Q1-19 (2) Core Yield Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Loan Coupon Rate Q4-20 Effective Yield is inclusive of all fees, including all realized unamortized fees and all realized transaction fees including but not limited to amendment fees and prepayment fees, and is calculated based on the weighted average principal balance of loans outstanding on a daily basis (1) (2) Core Yield excludes Early Repayments and One-Time Fees, and includes income and fees from expired commitments Xercules. CAPITAL 22#23$1,500 Total Debt Investments, at value (millions) $0 $500 $1,311.9 $1,000 $1,287.6 $1,300.1 $2,000 $1,416.0 $2,500 13.4% $1,336.3 HIGH-YIELD PORTFOLIO OF EARNING ASSETS MEDIAN EFFECTIVE YIELD FROM Q1 2017 TO Q4 2020 OF 13.5% 14.9% 14.1% 14.2% 14.3% 13.5% 13.5% 13.5% $1,546.0 $1,603.3 $1,733.5 $1,897.1 13.0% 14.3% 13.4% 13.0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 $2,061.6 $2,079.9 Total Debt Investments at Fair Value (1) Effective Yield (1) Effective Yield is inclusive of all fees, including all realized unamortized fees and all realized transaction fees including but not limited to amendment fees and prepayment fees, and is calculated based on the weighted average principal balance of loans outstanding on a daily basis Xercules. CAPITAL $2,148.6 $2,195.6 $2,216.4 $2,264.5 $2,094.4 0% 23 2% 13.6% 16% 18% 13.3% 14% 12.2% 12.6% 13.5% 12% 4% 6% 8% 10% Effective Yield (%)#24Net Interest Margin (in thousands) $70,000 $60,000 11.1% 10.1% $50,000 $40,000 $30,000 $20,000 $10,000 $33,920 $37,850 $35,366 $37,159 $38,140 (1) Net Interest Margin = Net Interest Income/Average Yielding Assets excluding Equity Investments STRONG, CONSISTENT NET INTEREST MARGIN - NIM MEDIAN NIM FROM Q1 2017 TO Q4 2020 OF 10.5% 10.3% 10.4% 10.5% $36,322 $41,650 $44,946 9.5% $43,321 $54,103 10.8% 11.0% 10.3% 11.8% 11.6% 11.0% 11.1% $0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Net Interest Margin (in thousands) Net Interest Margin %(1) Xercules. CAPITAL $54,243 $54,623 $57,293 $51,243 $53,707 $58,142 0% 90 24 14% 12% 10.3% 9.5% 10.5% 9.7% 10% 2% 4% 6% 8% Net Interest Margin (%)#2520% IMPACT OF EARLY PAYOFFS ON EFFECTIVE YIELDS Early Payoffs Lead to Higher Effective Yields and Earnings 14.9% 14.1% 14.2% 14.3% 14.3% 15% 13.4% 13.5% 13.5% 13.5% 12.2% 12.1% 12.6% 12.5% 12.7% 12.7% 13.0% 12.9% 12.7% 13.4% 13.6% 13.0% 13.3% 12.2% 12.6% 12.7% 11.9% 12.4% 12.3% 11.8% 11.5% 11.8% 11.3% 10% 9.3% 9.6% 9.8% 10.1% 10.4% 10.4% 10.3% 10.3% 10.2% 9.5% 10.1% 8.9% 9.5% 9.3% 9.2% 9.3% 5% Q1-17 Q2-17 Q3-17 Q4-17 GAAP Effective Yield Q1-18 Q2-18 (1) Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 (2) Core Yield Q4-19 Q1-20 Q2-20 Q3-20 Loan Coupon Rate Q4-20 $300 $505.6 EFFECTIVE YIELDS 17.8% $486.6 $526.7 $250 12.7% $200 8.7% 8.7% 8.6% 8.4% $150 7.2% 7.4% 7.4% 6.7% 6.7% 20% $709.0 13.4% 15% 10% $100 4.0% 3.6% 3.7% 9.4% 5% $50 $100.3 $166.4 $114.7 $124.2 $243.5 $114.3 $64.9 $63.9 $47.5 $178.3 $140.1 $160.8 $150.5 $85.4 $190.8 $282.3 $0 0% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Early Payoffs Early Payoffs as % of Ending Total Debt Investment Balance at Cost UNSCHEDULED EARLY PAYOFFS ($in millions) (1) Effective Yield is inclusive of all fees, including all realized unamortized fees and all realized transaction fees including but not limited to amendment fees and prepayment fees, and is calculated based on the weighted average principal balance of loans outstanding on a daily basis (2) Core Yield excludes Early Repayments and One-Time Fees, and includes income and fees from expired commitments Xercules. CAPITAL 25#26$18,000 $16,000 NON-INTEREST AND FEE EXPENSE TO AVERAGE TOTAL ASSETS $14,000 2.9% 2.6% $12,000 $10,000 OPEX (in thousands) $8,000 $6,000 $4,000 $2,000 $0 $9,410 T $10,667 $9,562 $11,023 MEDIAN ADJ. OPEX TO AVERAGE TOTAL ASSETS FROM Q1 2017 TO Q4 2020 OF 2.5% $9,769 2.5% $10,692 2.8% $10,389 2.4% $12,414 IOPEX (exc. Interest, fees, RSU, PSU and option expense) 2.5% $12,025 2.4% $16,248 3.2% 2.8% 2.6% 2.4% 2.4% 2.7% 2.3% 2.2% 2.2% Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 0% Xercules. CAPITAL $12,465 $13,430 $15,078 OPEX as a % of Average Total Assets $13,882 $13,333 $14,300 26 2% 3% 2.5% OPEX as a % of Total Assets (%) 1% 4%#27$270 $240 UNFUNDED COMMITMENTS AS A PERCENTAGE OF TOTAL ASSETS $210 $180 Available Unfunded Commitments (in millions) $150 $120 4.8% $90 3.6% $60 $30 T $75.9 $57.6 2.9% $46.3 $73.6 4.4% 3.2% $51.9 9.4% 7.7% 7.2% 7.2% 7.2% 7.1% $129.7 $171.9 $139.0 $154.2 $177.2 14% 12% 9.7% 10% 8% 6.7% 6.9% 5.6% 5.4% $0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 0% $167.5 $133.7 $134.7 Available Unfunded Commitments (in millions) (1) Unfunded Commitments as % of Total Assets (1) Amount represents available unfunded commitments, including undrawn revolving facilities, which are available at the request by the portfolio company. Xercules. CAPITAL $165.1 $242.5 $179.8 2% 27 16% Available Unfunded Commitments as % Total Assets 4% 6%#28Debt Portfolio Value ($ in millions) CONSISTENT AND DISCIPLINED UNDERWRITING STANDARDS Disciplined credit underwriting standards deliver consistent long-term results $2,500 $1,500 $1,000 $2,000 2.27 2.24 2.17 2.21 2.23 2.18 2.19 2.17 2.15 2.43 2.43 2.18 2.34 2.30 2.22 2.16 2.0 $500 $1,311.9 $1,287.6 $1,300.1 $1,416.0 $1,336.3 $1,546.0 $1,603.3 $1,733.5 $1,897.1 $1,224.1 $2,079.9 $2,148.6 $2,195.6 $2,216.4 $0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Debt Portfolio Value (1) Weighted Investment Credit Rating Credit Grading at Fair Value, Q4 2020 - Q4 2019 ($ in millions) $2,264.4 $2,094.4 3.0 4.0 1.0 High Quality Credit Rating 5.0 Low Quality Q4 2020 Q3 2020 Q2 2020 Q1 2020 Q4 2019 Grade 1 - High $ 411.0 19.6% $ 406.5 Grade 2 $1,027.9 49.1% $1,053.1 Grade 3 $ 621.3 Grade 4 $ 25.3 Grade 5 - Low $ 8.9 29.7% 1.2% 0.4% $ 772.3 $ 26.7 $ 5.9 17.9% 46.5% 34.1% 1.2% 0.3% 849.7 $ 25.0 $ $ 443.6 20.1% $ 877.9 39.6% 38.3% 1.1% $ 390.4 $ 818.1 $ 917.2 $ 54.3 20.1 0.9% $ 15.5 17.7% 37.3% 41.8% 2.5% 0.7% $ 387.3 $1,180.5 $ 509.9 18.0% 55.0% 23.7% $ 69.0 3.2% $ 1.8 0.1% Weighted Avg. (1) Debt only; based on fair value 2.16 2.22 2.30 Xercules. CAPITAL 2.34 2.15 28#29DIVERSIFIED SOURCES OF FUNDING: Q4 2020 Entity Capitalization $ in Millions $1,291.7 Capital Sources as of 12/31/20 Equity SBA Debentures 2027 Asset-Backed Notes 2028 Asset-Backed Notes 2022 Convertible Notes 2022 Notes (Institutional) 2024 Notes (Institutional) 2025 Notes (Baby Bonds) 2033 Notes (Baby Bonds) 2025 Notes (Institutional) 2026 Notes (Institutional) Credit Facilities Total Capital % of Total 49.8% $99.0 3.8% $181.0 7.0% $250.0 9.6% $230.0 8.9% $150.0 5.8% $105.0 4.1% $75.0 2.9% $40.0 1.5% $120.0 4.6% 50.0 2.0% $0.0 0.0% $2,591.7 100.0% ($ in millions) Debt Capital Stack 2025 Notes (Institutional) 2026 Institutional Notes 2.8% 2022 Institutional Notes 8.5% 4.6% 2024 Notes (Institutional). 2025 Institutional Notes 6.8% 2024 Institutional Notes. 5.9% 4.1% $105.0 $150.0 $50.0 $75,0 2025 Notes 4.2% $120.0 $75.0 SBA License 2 - HTIII 5.6% $99.0 $40.0 2033 Notes 2.2% $250.0 $230.0 $200.0 Wells Fargo 4.2% 2033 Notes (Baby Bonds) 1.5% Total Corporate Capitalization 2026 Notes (Institutional) 2.0% 2022 Notes (Institutional) 5.8% SBA Debentures 3.8% Union Bank 22.5% 2025 Notes (Baby Bonds) 2.9% $400.0 2028 Asset-Backed Notes 9.6% 2028 Asset Backed Notes. 14.1% 2022 Convertible Notes 13.0% 2027 Asset Backed Notes 10.2% 2022 Convertible Notes. 8.9% Credit Facilities 0.0% 2027 Asset-Backed Notes 7.0% Xercules. CAPITAL Equity 49.8% 29#30DIVERSIFIED SOURCES OF FUNDING (AS OF 12/31/20) Notes Wells Fargo Credit Facility Union Bank January 2022 October 2022 Credit Facility Conv. Notes Inst. Notes April 2025 Notes October 2033 Notes July 2024 Inst. Notes February 2025 Inst. Notes June 2025 Inst. Notes March 2026 A Inst. Notes SBA Debentures License 2 HTIII Securitizations DATE ENTERED Aug. 2008 Feb. 2020 Jan. 2017 Oct. 2017 April 2018 Oct. 2018 July 2019 Feb. 2020 June 2020 Nov. 2020 May 2010 Nov. 2018 Jan. 2019 FACILITY SIZE ($ in millions) $75.0 $400.0 $230.0 $150.0 $75.0 $40.0 $105.0 $50.0 $70.0 $50.00 $99.0 $181.0 $250.0 INTEREST RATE LIBOR + 300bps LIBOR + 250bps 4.375% 4.625% 5.25% unsecured unsecured unsecured 6.25% unsecured 4.77% unsecured 4.28% 4.31% 4.50% Unsecured Unsecured Unsecured Range(1) from 2.2% to 5.5% 4.605% 4.703% MATURITY January 2023 February 2024 February 2022 October 2022 April 2025 October 2033 July 2024 February 2025 June 2025 March 2026 Mature 10 years after borrowing November February 2027 2028 Set in ADDITIONAL INFO (Expandable up to $125.0) (Expandable up to $600.0) DBRS: BBB KBRA: BBB+ DBRS: BBB KBRA: BBB+ NYSE: HCXZ DBRS: BBB KBRA: BBB+ NYSE: HCXY DBRS: BBB KBRA: BBB+ March & Sept. KBRA: BBB+ KBRA: BBB+ KBRA: BBB+ KBRA: BBB+ KBRA: A(sf) KBRA: A(sf) (range: 2.2% to 5.5%) OUTSTANDING $0.0 $0.0 $230.0 $150.0 $75.0 $40.0 $105.0 $50.0 $70.0 $50.00 $99.0 $181.0 $250.0 ($ in millions) (1) ($ in millions) Interest rate range for the SBA debentures does not include annual fees Well Managed Debt Maturity Schedule $400 $300 $150.0 $49.2 $200 $70.0 $250.0 $100 $230.0 $50.0 $181.0 $25.0 $24.8 $105.0 $75.0 $50.0 $40.0 $0 2021 2022 2023 2024 2025 2026 2027 2028 2033 Convertible Notes SBA Bonds October 2033 Notes October 2022 Notes July 2024 Notes April 2025 Notes February 2025 Notes March 2026 A Notes June 2025 Notes Securitization Xercules. CAPITAL 30#31Net Income ($ in thousands) $19,900 $14,900 INTEREST RATES & ASSET SENSITIVITY Net Income EPS $0.20 $0.17 $0.16 $0.12 $9,900 $0.08 $0.08 $0.06 $0.04 $4,900 $0.04 $0.02 $0.00 $0.00 $0.00 -$100 -75 -50 -25 25 50 $0.00 75 100 200 Basis Point Movement in Prime Rate (1) EPS calculated on basic weighted shares outstanding of 113.9 million and a static debt investment portfolio as of December 31, 2020. Estimates are also subject to change due to impact from potential participation in the Company's equity ATM program and future equity offerings. Xercules. CAPITAL Earning per Share (1) 31#32PORTFOLIO HIGHLIGHTS Xercules CAPITAL#33HERCULES' INVESTMENT PORTFOLIO: Q4 2020 Floating vs. Fixed Rate Investment Type Breakout 3.1% 96.9% Industry Breakout 0.4% 2.0% 0.1% 2.1% 0.0% 0.0% 0.1% 0.2% 32.2% 2.4% 1.2% 2.3% 21.9% 1.1% 0.9% 0.0% 33.1% ■Floating Fixed 1.5% 9.5% 89.0% Debt Investments Equity Investments Warrant Positions Percentage of Portfolio Companies by Region (Portfolio Companies as of December 31, 2020) ■Communications & Networking Consumer & Business Products ■Drug Delivery ■Drug Discovery & Development Sustainable & Renewable Technologies Healthcare Services, Other ■Information Services Internet Consumer & Business Services ■Media/Content/Info Medical Devices & Equipment Semiconductors Software Specialty Pharmaceuticals Surgical Devices Electronics & Computer Hardware Biotechnology Tools Diversified Financial Services Xercules. 4% 37% 41% 9% 4% International: 5% Powered by Bing DSAT for MSFT, GeoNames, Navteq CAPITAL 33#34HERCULES' WARRANT & EQUITY PORTFOLIO: POTENTIAL FUTURE UPSIDE FOR SHAREHOLDER'S TOTAL RETURN 9 Portfolio Companies completed IPOs or in Registration - 2020 ■ Oak Street Health, Outset Medical, Palantir, Codiak, DoorDash and 908 Devices completed ■Metuchen Pharma and Yumanity Therapeutics (reverse mergers) and 1 confidential JOBS Act filer 14 Portfolio Company M&A Liquidity Events - 2020 ■ Quid, CareCloud, Elenion Technologies, TAS Energy, Metuchen Pharma, Machine Zone, Lastline, Postmates, Yumanity Therapeutics, Patron Technology, Blurb, Actifio, Insurance Technologies and Neos Therapeutics Current Warrant and Equity Portfolio - Q4 2020 100 warrant holdings • GAAP fair value ~$34.6 million • GAAP cost ~$25.7 million ~$63.8 million in nominal Exercise Value (as of 12/31/20) ■ 59 equity holdings GAAP fair value ~$224.7 million • GAAP cost $189.9 million ■Illustrative models of potential warrant gains (as of 12/31/20) $31.9M x 2X multiple: $63.8M $12.8M cost = Assumption: 50% of warrants will not monetize GAAP cost ~$12.8 million Based on ~113.9 million weighted average shares $51.0M unrealized gain = $0.45/share $31.9M x 3X multiple: $95.7M $12.8M cost = $82.9M unrealized gain = $0.73/share Xercules. CAPITAL $31.9M x 4X multiple: $127.6M $12.8M cost = $114.8 unrealized gain = $1.01/share 34#35SELECT LIST OF WARRANT AND EQUITY PORTFOLIO HOLDINGS Technology QPalantir DOORDASH docker Ccontentful X908 devices lyn dashlane IMPOSSIBLE™ fuze Postmates Couchbase 23andMe® lightspeed Nextdoor Thumbtack Life Sciences bridgebio TRICIDA Insmed uniQure MYOVANT avedro SCIENCES Xercules. CAPITAL TransMedics CHEMOCENTRYX Stealth BIOTHERAPEUTICS 35#36% Total Investment Portfolio at Fair Value A BROADLY DIVERSIFIED PORTFOLIO RE-BALANCED ACCORDING TO OUR ASSESSMENT OF ONGOING MARKET CONDITIONS MITIGATES RISK ($M) $1,020.7 $1,200.6 $1,423.9 $1,542.2 $1,880.4 $2,314.5 $2,354.1 100% 2.2% 3.0% 1.3% 2.1% 3.4% 2.1% 6.2% 2.0% 2.1% 4.7% 3.2% 4.5% 1.2% 2.4% 1.5% Diversified Financial Services 90% 5.9% 3.3% 13.3% 6.7% 10.9% 7.7% ■Electronics & Computer Hardware ■Consumer & Business Products 80% 12.3% 33.1% 12.3% 25.2% ■Surgical Devices 15.4% 23.4% 29.2% 70% 2.9% 2.2% 6.8% Healthcare Services, Other Sustainable & Renewable 8.0% 9.7% 0.9% 60% 0.9% Software 8.7% 1.2% 7.4% 9.9% 6.8% 2.6% 21.4% 50% 6.0% 17.5% 21.9% 13.7% 7.7% 10.0% 1.3% 40% 2.0% 13.5% 2.6% 5.9% 2.2% 7.6% 1.6% 2.6% 2.0% 1.6% 3.2% 2.3% 7.5% 2.7% 6.5% 1.1% 30% 6.1% 5.1% 4.3% 2.4% 20% 32.2% 32.2% 29.7% 28.7% 26.2% 23.7% 23.9% 10% Semiconductors ■Media/Content/Info Internet Consumer & Business Services ■Drug Delivery ■Information Services ■Communications & Networking ■Medical Devices & Equipment ■Specialty Pharmaceuticals ■Drug Discovery & Development Biotechnology Tools 0% 2014 2015 2016 2017 2018 2019 2020 Xercules. CAPITAL 36#37SELECT LIST OF DIVERSIFIED PORTFOLIO COMPANIES Technology Life Sciences SaaS Financing Couchbase uniQure box impervą Postmates bridgebio onelogin TRICIDA A ARCTIC WOLF W WageWorks fastly memSQL ♥ ОАК STREET HEALTH Insmed TransMedics Stealth BIOTHERAPEUTICS businessolver C2FO fuze abrigo make big things happen. salsa Sustainable & Renewable Technology Special Situations Annie's PROTERRA IMPOSSIBLE™ -chargepoin+ PLUG tpí P COMPOSITES druva Chorizon SOLAR POWER ForeScout FANDUEL MZ MACHINEZONE ancestry.com cloudpay rethink global payroll NextRoll mesoblast AXSOME TLED A DETICS TG Therapeutics Constellation PHARMACEUTICALS UROVANT SCIENCES CHEMOCENTRYX CLARABRIDGE PICO® "Воситар dashlane EVERFI Xercules. CAPITAL Trilliant Xometry ^ AMYRIS Bright Source Limitless FLUIDICENERGY zayo GROUP HighJump Jab MD everywhere Medsphere daegis InfoLogix intelligent beauty Velocity VAULTLOGIX Education Dynamics™ DocuSign 37#38DIVERSIFIED INVESTMENT APPROACH MITIGATES RISK FINANCIAL SPONSORS Ж Four Key Diversification Strategies INDUSTRY SECTORS STAGES OF DEVELOPMENT GEOGRAPHIC LOCATION More than 1000 Venture Capital Firms & Investors Technology SaaS Financing Life Sciences Sustainable & Renewable Special Situations Expansion or "Venture Growth" & Established Key VC Investment Centers Palo Alto Boston New York Washington DC Chicago Hartford Xercules. CAPITAL 38#39VENTURE CAPITAL MARKET OPPORTUNITY Xercules CAPITAL#40Dollars Invested (billions) OVER $1.1 TRILLION IN VENTURE CAPITAL INVESTMENTS Venture Capital Investment Activity 1997 - 2020 $180 $160 $140 $120 $100 6,350 $80 4,590 $60 3,341 2,547 $40 $20 2,211 3 $0 1997 1998 1999 2000 2001 2002 2,892 3,155 3,123 2,484 2,462 2.633 294 9 3 $33.3 11,024 12,000 10,000 4,995 8,000 4,341 6,000 4,000 $103.3 $156.2 2,000 0 2,799 $25 3,204 3,7293,906 4,048 4,2784,379 4,295 4,649 $28. $36.7 $34.8 $36.4 $58.5 $84.7 $60.2 $80.2 $108.5 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 # of deals Note: Represents VC investments only Source: Dow Jones VentureSource Q4 2019 $ in billions Pitch Book-NVCA Venture Monitor Q4 2020 Venture Capital Fundraising Activity 1997 - 2020 $90 $85.5 $80 Funds Raised (billions) $70 $60 $50 50 $54.6 $56.5 $58.7 $73.6 $42.5 $40 $26.9 $30 $20 $39.3 $31.9 $29.0 $29.8 $18.9 $12.5 $10.4 $46.1 $39.6 $37.3 $39.7 $22.4 $21.0 $17.9 $21.7 $14.9 $10 $0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2016 2014 2015 2016 2017 2018 2019 2020 Source: Dow Jones VentureSource Q4 2019 PitchBook-NVCA Venture Monitor Q4 2020 Xercules. CAPITAL 40 # of Deals#41EXITS OF VENTURE CAPITAL-BACKED COMPANIES Mergers & Acquisitions $140 759 826 900 708 742 703 730 800 $120 667 663 675 632 645 700 $100 T 600 $80 456 440 500 $60 400 300 $40 200 $20 100 $26.5 $22.8 $55.6 $56.7 $69.3 $67.8 $133.0 $84.7 $120.5 $89.0 $129.5 $123.4 $68.1 $0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $ in billions # M&A Deals Source: Dow Jones VentureSource Q4 2019 PitchBook-NVCA Venture Monitor Q4 2020 $250 Initial Public Offerings 126 140 120 $200 102 $150 87 58 53 52 100 79 82 79 80 60 60 $100 41 40 $50 9 8 20 $12.1 $0.6 $0.9 $3.9 $7.1 $9.6 $12.0 $8.0 $9.9 $11.2 $222.0 $2.8 $25.0 $0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $ in billions # of IPOS Source: Dow Jones VentureSource Q4 2019 PitchBook-NVCA Venture Monitor Q4 2020 Xercules. CAPITAL # of IPOS 41 # of Deals#42Commitment VC Dollars Invested (billions) $40 $20 $0 $25 2005 2006 $31.2 $34.5 $33.3 HERCULES' TOTAL COMMITMENTS vs. VC DOLLARS INVESTED VENTURE CAPITAL INVESTMENT ACTIVITY 2005 - 2020 $180 IVC Dollars Invested $160 Hercules Debt & Equity Commitments $140 Note: Represents VC investments only $120 $745 $882 $905 $100 $80 $807 $705 $630 $637 $494 $523 $60 $243 $413 $215 $186 197$ $28.9 $36.7 $34.8 $36.4 $58.5 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $84.7 s as % of VC Dollars 0.9% 0.8% 1.4% 1.2% 0.8% 1.8% 1.7% 1.8% 1.9% 1.6% 1.0% 1.6% 1.1% 1.1% 1.4% 0.8% $60.2 $80.2 $1,475 $1,600 $1,213 $1,188 $1,400 $1,200 $1,000 $800 $600 $400 $108.5 $103.3 $156.2 $200 50 $0 Invested ■ Hercules' uncompromising yield and credit underwriting standards drives commitments ■Market conditions determine commitment activity more than pure VC investment activity ■ Hercules' 16-year historical average: 1.3% Source: Dow Jones VentureSource Q4 2019 PitchBook-NVCA Venture Monitor Q4 2020 Xercules. CAPITAL 42 Hercules Debt and Equity Commitments (millions)#43INVESTMENT HIGHLIGHTS Attractive Yields and Upside from Equity and Warrant Portfolio Large Market Opportunity Experienced Management Team Strict Focus on Credit Underwriting Process Platform in Place to Grow Portfolio Xercules CAPITAL Focused on Strong and Sustainable Shareholder Returns Strong Venture Capital and Private Equity Relationships Strong Balance Sheet and Diverse Funding Sources Xercules. CAPITAL 43#44ANALYST COVERAGE Xercules CAPITAL#45BROAD INDUSTRY ANALYST COVERAGE - 9 FIRMS WELLS FARGO SECURITIES Jefferies KBW Finian O'Shea (Transferred Coverage 7/13/2018) John Hecht (Initiated Coverage 6/30/2015) A Stifel Company Ryan Lynch (Re-initiated Coverage 2/19/2013) BRILEY Securities Member FINRA/SIPC I a B. Riley Financial company PIPER SANDLER Sarkis Sherbetchyan (Re-initiated Coverage 2/22/2021) JMP Devin Ryan (Re-initiated Coverage 11/2/2020) COMPASS POINT RESEARCH & TRADING, LLC Crispin Love (Re-initiated Coverage 7/20/2020) Casey Alexander (Initiated Coverage 6/23/15) III WEDBUSH Henry Coffey (Initiated Coverage 10/24/17) LADENBURG THALMANN ESTABLISHED 1876 Christopher Nolan (Initiated Coverage 11/20/2017) Hercules Capital is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Hercules Capital's performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Hercules Capital or its management. Hercules Capital does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations. Xercules. CAPITAL 45#46SUPPLEMENTAL INFORMATION Xercules CAPITAL#47REGULATION AND STRUCTURE Hercules is an Internally Managed BDC under the 1940 Act and a RIC for Tax Purposes Business Development Company (BDC) Regulated by the SEC under the Investment Company Act of 1940 ■Leverage limited to approximately 2:1 debt/equity, unless an SEC exemptive order exists to exclude SBA debt ■ Investments are required to be carried at fair value Majority of Board of Directors must be independent ■ Offer managerial assistance to portfolio companies Regulated Investment Company (RIC) ■ Distribute taxable income as dividend distributions to shareholders ■Mandates asset diversification ■ Eliminates corporate taxation ■ Allows for the retention of capital gains and/or spillover of taxable income Small Business Investment Company (SBIC) ■ One Small Business Investment Company ("SBIC") license granted through the U.S. Small Business Administration ("SBA") ■ Currently, $99.0 million exemption from SEC leverage restrictions for BDCs, excludes all SBIC debt from BDC 2:1 leverage test Xercules. CAPITAL 47#48PRIMARILY INVEST AT STAGES OF HIGH GROWTH Type of Company Equity Capital Provider Expansion Stage Follow-on Rounds of Growth Capital (Series B-Liquidity Event) Venture Capital/ Private Equity Established Private Late Stage/ Select Public Companies Public Markets/ Private Equity Expectation for Additional Sponsor Support Targeted Warrant 1-3 Additional Rounds 0-2 Additional Rounds Gain Potential Potential Time to Liquidity 3-7 x 4-6 years Xercules. CAPITAL 2-4 x 2-4 years 48