So the underwriting went well beyond just what could potentially happen in 1 clinical trial.
Ryan Lynch: Okay, understood. Just my last question then, is kind of just a broader question on the VC lending landscape, not necessarily specific to your portfolio, but — with the significant amount of — with a significant decline in the level of exit activity occurring in the VC markets as well as valuations going lower, how do you foresee the level of new venture investments being made in the space, either to new companies or maybe more importantly, supporting existing companies with additional rounds of capital. Obviously, venture capital has — there’s been a lot of capital raised, but do you think that they’re going to be active in deploying it when they’re not really receiving any capital or very little capital back from exits?
Gerald Michaud: Yes. That’s the right question right there. And there’s kind of a tug and pull going on. On one side of the equation, there is a lot of capital committed to VC funds. And ultimately, the VCs need to — are going to need to get that capital invested. So there’s going to be pressure, I think maybe not in the first half of this year, but by the second half to really start doing that. It was actually an interesting article from Bain. I think was yesterday or the day before, they just raised 2 very large funds. And their quote was — something to the effect — I’m paraphrasing here that they’re going to lean forward into the market right now. They think valuations are good, and they’re going to be investing. So you’ve got that on one side of it.
On the other side, to your also good point, the IPO market is still very much distracted with everything else that’s going on in the economy, and there are very few IPOs getting done. And M&A is not actually in much better shape. There has been some M&A activity. One of the things we have noticed. First of all, high-quality companies still are raising capital. We have a handful of companies in our own portfolio that have raised $75 million or more in 2022. As it relates to kind of everybody else, fundraising is still happening, but instead of the — let’s grow our business, raise a big round. It’s going to get us through 18 months, and a significant growth work . What we’re more seeing today is companies being far more focused on getting to cash flow positive.
They’re raising smaller rounds. So it’s not so much getting to a big event like an IPO or an M&A. It’s about getting to kind of better market conditions. So we see a lot of companies that are raising 6, 9, 12 months of capital where — a really good market. They may raise more than that and be really focused on the growth part of it. So we are seeing companies still being supported by investors for the most part. There are some idiosyncratic situations that obviously can be impacted by — in part by kind of the macro situation. But I think that’s what we’re going to see for the first half of this year. We’ll see continued investment. They want to keep their portfolios companies funded and keep them on some kind of track, but it isn’t necessarily a big growth track and kind of waiting for better market conditions, better valuations, more M&A and a better IPO market.
And that’s the world we’re living in right now. And so we obviously are aware of both the macro, and who the investors are and things like that.
Operator: Our next question comes from the line of Bryce Rowe from B. Riley.
