v3.25.1
MANAGEMENT FEE AND RELATED PARTIES
 3 Months Ended
Mar. 31, 2025
Related Party Transactions [Abstract]  
MANAGEMENT FEE AND RELATED PARTIES MANAGEMENT FEE AND RELATED PARTIES
Management Fee
As compensation for its services to the Fund, from the date of the first capital call, May 1, 2018, the Manager receives a management fee (the “Management Fee”). The aggregate annual amount of the Management Fee for each annual period (which is comprised of four whole fiscal quarters and which, in the case of the first year, commenced on the first day of the first fiscal quarter following the first capital contribution) calculated as a percentage of committed capital, is as follows:

Management Fee
Year 11.575%
Year 21.600%
Year 31.575%
Year 41.500%
Year 51.250%
Year 60.900%
Year 70.600%
Year 80.350%
Year 90.150%

For the three months ended March 31, 2025 and 2024, Management Fees were calculated at 0.60% and 0.90% of the Company's committed capital, respectively.
Management Fees of $0.7 million and $1.0 million were recognized as expenses for the three months ended March 31, 2025 and 2024, respectively.
Related Parties

Certain officers and directors of the Fund also serve as officers and directors of the Manager. The Amended and Restated Articles of Incorporation of the Fund provide for indemnification of directors, officers, employees and agents (including the Manager) of the Fund to the fullest extent permitted by applicable state law and the 1940 Act, including the advance of expenses and reasonable counsel fees. The Amended and Restated Articles of Incorporation of the Fund also contain a provision eliminating personal liability of a Fund director or officer to the Fund or its shareholder for monetary damages for certain breaches of their duty of care. For this reason, the Fund acquired a directors and officers insurance policy.

Transactions with Venture Lending & Leasing VIII, Inc. (“Fund VIII”)  

The Manager also served as the investment manager for Fund VIII.  So long as Fund VIII had capital available to invest in loan transactions with final maturities earlier than December 31, 2025, the Fund was able to invest in each portfolio company in which Fund VIII invested, subject to the approval of the Fund's Board. The Manager’s allocation process was designed to allocate investment opportunities fairly and equitably among the Fund and Fund VIII over time, and subject to board approval, was based on a methodology taking into account investment pace, the remaining commitment periods and other relevant factors. The Fund co-invested with Fund VIII through March 31, 2021, which was the end of Fund VIII's investment period. Fund VIII was deregistered as a BDC with the Securities and Exchange Commission (“SEC”) on October 12, 2023 and distributed all of its remaining assets to its parent, Venture Lending & Leasing VIII, LLC during the year ended December 31, 2023.
Transactions with WTI Fund X, Inc. (“Fund X”)

The Manager also serves as the investment manager for Fund X. So long as Fund X had capital available to invest in loan transactions with final maturities earlier than December 31, 2028 (the date on which the Fund's term of existence automatically expires), the Fund was able to invest in each portfolio company in which Fund X invested, subject to the approval of the Fund's Board. The Manager’s allocation process was designed to allocate investment opportunities fairly and equitably among the Fund and Fund X over time, and subject to board approval, was based on a methodology taking into account investment pace, the remaining commitment periods and other relevant factors. The Fund co-invested with Fund X through December 31, 2023, which was the end of the Fund’s investment period.

The ability of the Fund to co-invest with Fund VIII, Fund X, and other clients advised by the Manager, was subject to the conditions (the “Conditions”) with which the funds were complying while seeking certain exemptive relief from the SEC from the provisions of Sections 17(d) and 57 of the 1940 Act and Rule 17d-1 thereunder. To the extent that clients, other than Fund VIII and Fund X, advised by the Manager (but in which the Manager had no proprietary interest) invested in opportunities available to the Fund, the Manager allocated such opportunities among the Fund and such other clients in a manner deemed fair and equitable considering all of the circumstances in accordance with the Conditions.
Intercreditor Agreements  
In all transactions in which the Fund and other funds managed by the Manager invest or those in which another lender(s) has either invested or may later invest (or in the event a successor fund is raised, in which the Fund and the successor fund invest), it is expected that the Fund and, other funds managed by the Manager (or the successor fund as the case may be), and/or the other lender(s) will enter into an intercreditor agreement pursuant to which the Fund and, other funds managed by the Manager (or the successor fund), and/or the other lender(s), along with any predecessor funds which still have a balance outstanding, will cooperate in pursuing their remedies following a default by the common borrower. Generally, under such intercreditor agreements, each party would agree that its security interest would be treated in parity with the security interest of the other party, regardless of which security interest would have priority under applicable law. Accordingly, proceeds realized from the sale of any collateral or the exercise of any other creditor’s rights will be allocated between the Fund and, other funds managed by the Manager, and any predecessor funds as described above, pro rata in accordance with the amounts of their respective investments. An exception to the foregoing arrangement would occur in situations where, for example, one of the lenders financed specific items of equipment collateral; in that case, usually the lender who financed the specific assets will have a senior lien on that asset, and the other lenders will have a junior priority lien (even though they may ratably share liens of equal priority on other assets of the common borrower). As a result of such intercreditor agreements, the Fund may have less flexibility in pursuing its remedies following a default than it would have had had there been no intercreditor agreement, and the Fund may therefore realize fewer proceeds. In addition, because the Fund and other funds managed by the Manager (or the successor fund) invest at the same time in the same borrower, such borrower would be required to service two loans rather than one. Any additional administrative costs or burdens resulting therefrom may make the Fund a less attractive lender and may make it more difficult for the Fund to acquire such loans.