Venture Lending & Leasing VII, Inc. - FORM 10-Q

Attached files

file	filename
EX-31.1 - VLL7INC 10Q 06-30-14 EXHIBIT 31.1 - Venture Lending & Leasing VII, Inc.	vll76302014ex311.htm
EX-32.1 - VLL7INC 10Q 06-30-14 EXHIBIT 32.1 - Venture Lending & Leasing VII, Inc.	vll76302014ex321.htm
EX-32.2 - VLL7INC 10Q 06-30-14 EXHIBIT 32.2 - Venture Lending & Leasing VII, Inc.	vll76302014ex322.htm
EX-31.2 - VLL7INC 10Q 06-30-14 EXHIBIT 31.2 - Venture Lending & Leasing VII, Inc.	vll76302014ex312.htm

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014



[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ______________

Commission file number 814-00969

Venture Lending & Leasing VII, Inc.

(Exact Name of Registrant as specified in its charter)



Maryland	45-5589518
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

104 La Mesa Drive, Suite 102	Portola Valley, CA 94028
(Address of principal executive offices)	(Zip Code)

(650) 234-4300

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer”, and "smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer [ ]	Accelerated filer [ ]	Non-accelerated filer [x]	Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [x]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:



Class		Outstanding as of August 8, 2014
Common Stock, $.001 par value		100,000

VENTURE LENDING & LEASING VII, INC.

INDEX



PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Statements of Assets and Liabilities (Unaudited)
	As of June 30, 2014 and December 31, 2013

	Condensed Statements of Operations (Unaudited)
	For the three and six months ended June 30, 2014 and 2013

	Condensed Statements of Changes in Net Assets (Unaudited)
	For the six months ended June 30, 2014 and 2013

	Condensed Statements of Cash Flows (Unaudited)
	For the six months ended June 30, 2014 and 2013

	Notes to Condensed Financial Statements (Unaudited)

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Item 4.	Controls and Procedures

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings

Item 1A.	Risk Factors

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.	Defaults Upon Senior Securities

Item 4.	Mine Safety Issues

Item 5.	Other Information

Item 6.	Exhibits

SIGNATURES

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VENTURE LENDING & LEASING VII, INC.

CONDENSED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)

AS OF JUNE 30, 2014 AND DECEMBER 31, 2013



	June 30, 2014			December 31, 2013
ASSETS
Loans, at estimated fair value
(Cost of $162,295,237 and $123,702,847)	$	160,828,937		$	122,392,255
Cash and cash equivalents	5,142,340			6,380,162
Other assets (Cost of $3,586,151 and $3,057,357)	3,427,448			3,050,158

Total assets	169,398,725			131,822,575

LIABILITIES
Borrowings under debt facility	76,000,000			43,000,000
Accrued management fees	2,343,750			2,343,750
Accounts payable and other accrued liabilities	739,262			710,310

Total liabilities	79,083,012			46,054,060

NET ASSETS	$	90,315,713		$	85,768,515

Analysis of Net Assets:

Capital paid in on shares of capital stock	$	104,425,000		$	96,925,000
Return of capital distributions	(11,893,064		)	(9,247,476		)
Accumulated deficit	(2,216,223		)	(1,909,009		)
Net assets (equivalent to $903.16 and $857.69 per share based on 100,000 shares of capital stock outstanding - See Note 5)	$	90,315,713		$	85,768,515

See notes to condensed financial statements.

VENTURE LENDING & LEASING VII, INC.

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013



	For the Three Months Ended June 30, 2014			For the Three Months Ended June 30, 2013			For the Six Months Ended June 30, 2014			For the Six Months Ended June 30, 2013


INVESTMENT INCOME:
Interest on loans	$	7,208,718		$	1,922,601		$	12,579,548		$	2,163,422
Other interest and other income	5,553			195			5,678			82,484
Total investment income	7,214,271			1,922,796			12,585,226			2,245,906

EXPENSES:
Management fees	2,343,750			2,343,750			4,687,500			4,689,226
Interest expense	680,860			—			1,188,506			—
Banking and professional fees	31,500			90,872			78,119			249,234
Other operating expenses	13,455			20,479			26,773			36,561
Total expenses	3,069,565			2,455,101			5,980,898			4,975,021
Net investment income (loss)	4,144,706			(532,305		)	6,604,328			(2,729,115		)

Net realized loss from investments	—			—			(1,317,886		)	—
Net change in unrealized loss from investments	(1,311,300		)	—			(155,710		)	—
Net change in unrealized loss from hedging activities	(117,830		)	—			(151,504		)	—
Net realized and change in unrealized loss from investments and hedging activities	(1,429,130		)	—			(1,625,100		)	—

Net increase (decrease) in net assets resulting from operations	$	2,715,576		$	(532,305	)	$	4,979,228		$	(2,729,115	)
Net increase (decrease) in net assets resulting from operations per share	$	27.16		$	(5.32	)	$	49.79		$	(27.29	)
Weighted average shares outstanding	100,000			100,000			100,000			100,000

See notes to condensed financial statements.

VENTURE LENDING & LEASING VII, INC.

CONDENSED STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2014 AND 2013



	For the Six Months Ended June 30, 2014			For the Six Months Ended June 30, 2013
Net increase (decrease) in net assets resulting from operations:
Net investment income (loss)	$	6,604,328		$	(2,729,115	)
Net realized loss from investments	(1,317,886		)	—
Net change in unrealized loss from investments	(155,710		)	—
Net change in unrealized loss from hedging activities	(151,504		)	—

Net increase (decrease) in net assets resulting from operations	4,979,228			(2,729,115		)

Distributions of income to shareholder	(5,286,442		)	—
Return of capital to shareholder	(2,645,588		)	(5,226,252		)
Contributions from shareholder	7,500,000			77,500,000
(Decrease) Increase in capital transactions	(432,030		)	72,273,748

Total increase	4,547,198			69,544,633

Net assets
Beginning of period	85,768,515			7,227,429

End of period	$	90,315,713		$	76,772,062

See notes to condensed financial statements.

VENTURE LENDING & LEASING VII, INC.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2014 AND 2013



	For the Six Months Ended June 30, 2014			For the Six Months Ended June 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase (decrease) in net assets resulting from operations	$	4,979,228		$	(2,729,115	)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:
Net realized loss from investments	1,317,886			—
Net change in unrealized loss from investments	155,710			—
Net change in unrealized loss from hedging activities	151,504			—
Amortization of deferred costs related to borrowing facility	317,273			—
Net increase in other assets	(594,067		)	(956,342		)
Net increase in accounts payable, other accrued liabilities, and accrued management fees	28,952			2,461,147
Origination of loans	(61,825,000		)	(73,890,000		)
Principal payments on loans	21,845,374			5,514,582
Acquisition of equity securities	(4,862,682		)	(5,226,252		)
Net cash used in operating activities	(38,485,822		)	(74,825,980		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distribution to shareholder	(3,000,000		)	—
Contributions from shareholder	7,500,000			77,500,000
Net borrowings under debt facility	33,000,000			—
Payment of bank facility fees and costs	(252,000		)	—
Net cash provided by financing activities	37,248,000			77,500,000
Net increase (decrease) in cash and cash equivalents	(1,237,822		)	2,674,020
CASH AND CASH EQUIVALENTS:
Beginning of period	6,380,162			7,311,471
End of period	$	5,142,340		$	9,985,491
SUPPLEMENTAL DISCLOSURES:
CASH PAID DURING THE PERIOD:
Interest	$	602,602		$	—
NON-CASH ACTIVITIES:
Distributions of equity securities to shareholder	$	4,932,030		$	5,226,252
Receipt of equity securities as repayment of loans	$	69,348		$	—

See notes to condensed financial statements.

VENTURE LENDING & LEASING VII, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)


1.	ORGANIZATION AND OPERATIONS OF THE FUND

Venture Lending & Leasing VII, Inc. (the “Fund”), was incorporated in Maryland on June 21, 2012 as a non-diversified closed-end management investment company electing status as a business development company (“BDC”) under the Investment Company Act of 1940, as amended ("1940 Act") and is managed by Westech Investment Advisors, LLC, (“Manager” or “Management”). The Fund will be dissolved on December 31, 2022 unless an election is made to dissolve earlier by the Board of Directors of the Fund (the "Board"). One hundred percent of the stock of the Fund is held by Venture Lending & Leasing VII, LLC (the “Company”). Prior to commencing its operations on December 18, 2012, the Fund had no operations other than the sale to the Company of 100,000 shares of common stock, $0.001 par value for $25,000 in July 2012. This issuance of stock was a requirement in order to apply for a finance lender's license from the California Commissioner of Corporations, which was obtained on September 20, 2012.

In the Manager's opinion, the accompanying financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of financial position and results of operations for interim periods. Certain information and note disclosures normally included in audited annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted; however, the Fund believes that the disclosures made are adequate to make the information presented not misleading. The interim results for the six months ended June 30, 2014 are not necessarily indicative of what the results would be for a full year. It is suggested that these financial statements be read in conjunction with the financial statements and the notes included in the Fund's Annual Report on Form 10-K for the year ended December 31, 2013.


2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and money market mutual funds with maturities of 90 days or less. Money market mutual funds held as cash equivalents are valued at their most recently traded net asset value.

Interest Income

Interest income on loans is recognized using the effective interest method including amounts from the amortization of discounts attributable to equity securities received as part of the loan transaction. Additionally, fees received as part of the transaction are added to the loan discount and amortized over the life of the loan.

Valuation Procedures

The Fund accounts for loans at fair value in accordance with the “Valuation Methods” below. All valuations are determined under the direction of the Manager, in accordance with these methods.

The Fund's loans are valued in connection with the issuance of its periodic financial statements, the issuance or repurchase of the Fund's shares at a price equivalent to the current net asset value per share, and at such other times as

required by law. On a quarterly basis, Management submits to the Board a “Valuation Report,” which details the rationale for the valuation of investments.

As of June 30, 2014 and December 31, 2013, the financial statements include nonmarketable investments of $160.8 million and $122.4 million, respectively (or approximately 95% and 93% of total assets, respectively), with fair values determined by the Manager in the absence of readily determinable market values. Because of the illiquidity of the Fund's investments, a substantial portion of its assets are carried at fair value as determined in good faith by the Manager in accordance with the Fund's policy as approved by the Board. Because of the inherent uncertainty of these valuations, estimated fair values of such investments may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material. Below is the information used by the Manager in making these estimates.

Loans

The Fund defines fair value as the price that would be received to sell an asset or paid to lower a liability in an orderly transaction between market participants at the measurement date. There is no secondary market for the loans made by the Fund to borrowers, hence Management determines fair value based on hypothetical markets. Venture loans are generally held to maturity and are recorded at estimated fair value. The determination of fair value is based on a number of factors including the amount for which an investment could be exchanged in a current sale, which assumes an orderly disposition over a reasonable period other than in a forced sale. Management considers the fact that no ready market exists for substantially all of the investments held by the Fund. Management determines whether to adjust the estimated fair value of a loan based on a number of factors including but not limited to the borrower's payment history, available cash and “burn rate,” revenues, net income or loss, the likelihood that the borrower will be able to secure additional financing in the future, as well as an evaluation of the general interest rate environment. The amount of any valuation adjustment considers liquidation analysis and is determined based upon a credit analysis of the borrower and an analysis of the expected recovery from the borrower, including consideration of factors such as the nature and quality of the Fund's security interests in collateral, the estimated value of the Fund's collateral, the size of the loan, and the estimated time that will elapse before the Fund achieves a recovery. Management has evaluated these factors and has concluded that the effect of deterioration in the quality of the underlying collateral, increase in the size of the loan and increase in the estimated time to recovery would have the effect of lowering the value of the current portfolio of loans.

Non-accrual Loans

The Fund's policy is to place a loan on non-accrual status when the loan stops performing and Management deems that it is unlikely that the loan will return to performing status. When a loan is placed on non-accrual status, all interest previously accrued but not collected is reversed for the quarter in which the loan was placed on non-accrual status. Any uncollected interest related to quarters prior to when the loan was placed on non-accrual status is added to the principal balance, and the aggregate balance of the principal and interest is evaluated in accordance with the policy for valuation of loans in determining Management's best estimate of fair value. Interest received by the Fund on non-accrual loans will be recorded on a cash basis.

If a borrower of a non-accrual loan resumes making regular payments and Management deems that the borrower has sufficient resources that it is unlikely the loan will return to non-accrual status, the loan is re-classified back to accrual or performing status. Interest that would have been accrued during the non-accrual status will be added back to the remaining payment schedule, and thus changing the effective interest rate.

As of June 30, 2014, a loan with a cost basis of $2.0 million and a fair value of $1.6 million was classified as non-accrual. As of December 31, 2013 loans with a cost basis of $1.5 million and a fair value of $0.2 million were classified as non-accrual.

Warrants and Stock

Warrants and stock that are received in connection with loan transactions generally will be assigned a fair value at the time of acquisition, unless a market price is available. These securities are then distributed by the Fund to the Company at the assigned value. Warrants are valued based on a modified Black-Scholes option pricing model which takes into account underlying stock value, expected term, volatility, and risk-free interest rate, among other factors.

Underlying asset value is estimated based on information available, including information regarding recent rounds of funding of the portfolio company, or the publicly-quoted stock price at the end of the financial reporting period for warrants for comparable publicly-quoted securities.

Volatility, or the amount of uncertainty or risk about the size of the changes in the warrant price, is based on an index of publicly traded companies grouped by industry and which are similar in nature to the underlying portfolio companies issuing the warrant (“Industry Index”). The volatility assumption for each Industry Index is based on the average volatility for individual public companies within the portfolio company's industry for a period of time approximating the expected life of the warrants. A hypothetical increase in the volatility calculated from the indexes used in the modified Black-Scholes option pricing model would have the effect of increasing the value of the warrants.

The remaining expected lives of warrants are based on historical experience of the average life of the warrants, as warrants are often exercised in the event of acquisitions, mergers, or initial public offerings and terminated due to events such as bankruptcies, restructuring activities, or additional financings. These events cause the expected term to be less than the remaining contractual term of the warrants. The remaining expected lives of warrants may be adjusted from time to time to reflect new facts and circumstances. A hypothetical increase in the estimated initial term of the warrants used in the modified Black-Scholes option pricing model would have the effect of increasing the value of the warrants.

The risk-free interest rate is derived from the constant maturity tables issued by the U.S. Treasury Department. The effect of a hypothetical increase in the estimated risk-free rate used in the modified Black-Scholes option pricing model would have the effect of increasing the value of the warrants.

On an annual basis, the Fund engages an independent valuation company to provide valuation assistance. This company evaluates the Fund's valuation methodology and assumptions for reasonableness from the perspective of a market participant. The independent third party also calculates certain inputs used such as volatility and risk-free rate. Upon the receipt of such data, a sample test is performed to ensure the accuracy of the third party calculations and that the source of data is reliable and consistent with the way in which the calculations were made in prior periods. Such inputs are entered into the database with a second review to ensure the accuracy of the input information. All calculations of warrant values are performed by one employee and reviewed by a second party. The inputs of the modified Black-Scholes option pricing model are reevaluated every quarter.

Other Assets and Liabilities

Other Assets include costs incurred in conjunction with borrowings under the Fund's debt facility, including the interest rate cap and are stated at initial cost with the exception of the interest rate cap which is stated at fair value. The costs are amortized over the term of the facility.

As of June 30, 2014 and December 31, 2013, the fair values of Other Assets and Liabilities are estimated at their carrying values because of their short-term nature.

As of June 30, 2014 and December 31, 2013, based on borrowing rates available to the Fund, which are Level 2 inputs, the estimated fair values of the borrowings under the debt facility were $76.0 million and $43.0 million, respectively.

Commitment Fees

Unearned income and commitment fees on loans are recognized using the effective interest method over the term of the loan. Commitment fees are carried as liabilities when received for commitments upon which no draws have been made. When the first draw is made, the fee is treated as unearned income and is recognized as described above. If a draw is never made, the forfeited commitment fee less any applicable legal costs becomes recognized as other income after the commitment expires.

Interest Rate Cap Agreements

Interest rate caps are primarily valued on the basis of quotes obtained from brokers and dealers and adjusted for counterparty risk. The valuation of the interest rate cap agreement also considers the future expected interest rates on the notional principal balance remaining which is comparable to what a prospective acquirer would pay on the measurement date. Valuation pricing models consider inputs such as forward rates, anticipated interest rate volatility relating to the reference rate, as well as time value and other factors underlying cap instruments. The contracts are recorded at fair value in either other assets or accounts payable and other accrued liabilities in the Condensed Statements of Assets and Liabilities, depending on whether the value of the contract is in favor of the Fund or the counter party. The changes in fair value are recorded in net realized and change in unrealized gain (loss) from hedging activities in the Condensed Statements of Operations. The quarterly interest paid or received on the interest rate cap contracts is also recorded in net realized and change in unrealized gain (loss) from hedging activities.

Deferred Bank Fees

Through June 30, 2014, the deferred bank fees and costs associated with the debt facility have been capitalized and will be allocated over the estimated life of the facility, which currently is through July 2016. The amortization of these costs is recorded as interest expense in the Condensed Statements of Operations (see Note 6).

Tax Status

The Fund has elected to be treated as a Regulated Investment Company ("RIC") under Subchapter M of the Internal Revenue Code (the "Code") and operates in a manner so as to qualify for the tax treatment applicable to RICs.

In order to qualify for favorable tax treatment as a RIC, the Fund is required to distribute annually to its sole shareholder at least 90% of its investment company taxable income, as defined by the Code. To avoid federal excise taxes, the Fund must distribute annually at least 98% of its ordinary income and 98.2% of net capital gains from the current year and any undistributed ordinary income and net capital gains from the preceding years. The Fund, at its discretion, may carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income. If the Fund chooses to do so, all other things being equal, this would increase expenses and reduce the amount available to be distributed to the sole shareholder. The Fund will accrue excise tax on estimated undistributed taxable income as required.

Dividends from net investment income and distributions from net realized capital gains are determined in accordance with U.S. federal income tax regulations, which may differ from those amounts determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital or accumulated net realized gain (loss), as appropriate, in the period that the differences arise. Temporary and permanent differences are primarily attributable to differences in the tax treatment of certain loans and the tax characterization of income and non-deductible expenses. These differences are generally determined in conjunction with the preparation of the Fund's annual RIC tax return.

Book and tax basis differences relating to shareholder dividends and distributions and other permanent book and tax differences are reclassified among the Fund's capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from GAAP.

The Fund may pay distributions in excess of its taxable net investment income. This excess would be a tax-free return of capital in the period and reduce the shareholder's tax basis in its shares. The cumulative amount is disclosed on the Condensed Statements of Assets and Liabilities as return of capital distributions. Cumulative return of capital distributions were $11.9 million and $9.2 million as of June 30, 2014 and December 31, 2013, respectively. As of June 30, 2014, the Fund had no uncertain tax positions.

The Fund's tax years open to examination by major jurisdictions are 2012 and forward.


3.	SUMMARY OF INVESTMENTS

Loans generally are made to borrowers pursuant to commitments whereby the Fund agrees to finance assets and/or provide working or growth capital up to a specified amount for the term of the commitment, upon the terms and subject to the conditions specified by such commitment. As of June 30, 2014, the Fund's investments in loans were primarily to companies based within the United States and were diversified among borrowers in the industry segments shown below. The percentage of net assets that each industry group represents is shown with the industry totals below (the sum of the percentages does not equal 100 percent because the percentages are based on net assets as opposed to total loans). All loans are senior to unsecured creditors except where indicated.

The Fund defines fair value as the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants at the measurement date; that is, an exit price. The exit price assumes the asset or liability was exchanged in an orderly transaction; it was not a forced liquidation or distressed sale.

Loan balances are summarized by borrower. Typically a borrower's balance will be composed of several loans drawn under a commitment made by the Fund with the interest rate on each loan fixed at the time each loan is funded. Each loan drawn under a commitment may have a different maturity date and amount. For the three and six months ended June 30, 2014, the weighted-average interest rate on performing loans was 18.63% and 17.38%, respectively. For the three and six months ended June 30, 2013 the weighted-average interest rate on performing loans was 16.48% and 15.44%, respectively. This rate is inclusive of both cash and non-cash interest income. For the three and six months ended June 30, 2014, the weighted-average interest rate on the cash portion of the interest income was 14.54% and 13.48%, respectively. For the three and six months ended June 30, 2013, the weighted-average interest rate on the cash portion of the interest income was 12.60% and 11.68%, respectively. Interest is calculated using the effective interest method, and rates earned by the Fund will fluctuate based on many factors including early payoffs, volatility of values ascribed to warrants and new loans funded during the year.

The risk profile of a loan changes when events occur that impact the credit analysis of the borrower and loan as described in our loan accounting policy. Such changes result in the fair value being adjusted from par value of the individual loan. Where the risk profile is consistent with the original underwriting, which is primarily the case for this loan portfolio, the par value of the loan will approximate fair value.

All loans as of June 30, 2014 were to non-affiliates and consisted of the following:



	Percentage of	Estimated Fair		Par Value		Final
Borrower	Net Assets	Value 6/30/14		6/30/14		Maturity Date

Carrier Networking
Vello Systems, Inc.		$	1,457,980	$	1,822,980	*
Subtotal:	1.6%	$	1,457,980	$ 1,822,980



Computers & Storage
Clustrix Inc.		$	2,352,178	$	2,352,178	5/1/17
Connected Data, Inc.		2,148,953		2,148,953		5/1/17
D-Wave Systems, Inc.		1,835,430		1,835,430		2/1/17
Gridstore, Inc.		1,390,814		1,390,814		6/1/17
Looxcie, Inc.		595,904		595,904		12/1/15
Subtotal:	9.2%	$	8,323,279	$ 8,323,279

Enterprise Networking
Apprion, Inc.		$	699,859	$	699,859	4/1/16
Splashtop, Inc.		1,460,787		1,460,787		5/1/16
Subtotal:	2.4%	$	2,160,646	$ 2,160,646

Internet
Bee Cave Games, Inc.		$	140,429	$	140,429	2/1/17
Better Doctor, Inc.		391,745		391,745		6/1/16
Bot Home Automation, Inc.		214,754		214,754		10/1/16
Change.org, Inc.		2,331,548		2,331,548		11/1/16
CustomMade, Inc.		1,900,861		1,900,861		5/1/17
Desti, Inc.		38,980		43,280		*
Digital Caddies, Inc.		803,637		803,637		6/1/17
FanDuel, Inc.		1,736,235		1,736,235		9/1/16
Fast Labs, Inc.		436,220		436,220		3/1/17
Fingi, Inc.		347,073		347,073		6/1/18
FlipTop, Inc.		228,560		228,560		6/1/17
Giveforward, Inc.		459,318		459,318		7/1/17
Good Eggs, Inc.		388,272		388,272		6/1/16
Grovo Learning, Inc.		951,831		951,831		3/1/17
Inside Vault, Inc.		233,373		233,373		1/1/17
Jun Group, LLC		788,752		788,752		2/1/17
Kitsy Lane, Inc.		266,802		266,802		12/1/16
Kiwi Crate, Inc.		1,307,885		1,307,885		10/1/16
Komli Media, Inc.		772,823		772,823		9/1/15
LocalResponse, Inc.		481,671		481,671		3/1/16
MassDrop, Inc.		354,409		354,409		9/1/17
MediaSpike, Inc.		214,827		214,827		12/1/16
MeetMe, Inc.		1,735,964		1,735,964		4/1/16
Modasuite, Inc.		1,652,370		1,652,370		7/1/16
Moveline Group, Inc.		938,361		938,361		6/1/17
Osix Corp.		102,303		102,303		10/1/16
Piryx, Inc.		918,960		918,960		6/1/17
Pixalate, Inc.		467,184		467,184		3/1/17
Playstudios, Inc.		901,209		901,209		9/1/17
Pleygo, Inc.		218,595		218,595		12/1/16
Quantcast Corp.		5,696,978		5,696,978		4/1/17
Quri, Inc.		1,162,183		1,162,183		12/1/17
Radius Intelligence, Inc.		1,576,940		1,576,940		10/1/17



Retail Innovation Group		2,043,069		2,043,069		7/1/16
The SavvySource For Parents, Inc.		216,666		216,666		12/1/16
Schooltube, Inc.		68,222		108,222		*
Session M, Inc.		1,856,468		1,856,468		2/1/17
Smart Lunches, Inc.		195,814		195,814		6/1/16
Sociable Labs, Inc.		402,092		402,092		7/1/16
StitchFix, Inc.		627,501		627,501		8/1/16
Waluzi, Inc.		99,234		99,234		8/1/16
Weddington Way, Inc.		1,044,996		1,044,996		11/1/16
WHI, Inc.		1,140,258		1,140,258		2/1/17
YouDocs Beauty, Inc.		741,628		1,141,628		5/1/18
Zazma, Inc.		1,747,513		1,747,513		5/1/17
Subtotal:	44.7%	$	40,344,513	$ 40,788,813

Medical Devices
AxioMed, Inc.		$	1,861,487	$	2,326,487	11/1/16
Blockade Medical LLC		452,415		452,415		9/1/17
Cayenne Medical, Inc.		4,721,722		4,721,722		12/1/17
Subtotal:	7.8%	$	7,035,624	$ 7,500,624

Other Healthcare
Cogito Health, Inc.		$	566,992	$	566,992	4/1/17
Health Integrated		1,841,530		1,841,530		7/1/17
Mulberry Health, Inc.		4,774,610		4,774,610		12/1/17
Physician Software Systems, LLC		470,180		470,180		7/1/17
Practice Fusion, Inc.		5,717,085		5,717,085		6/1/16
Project Healthy Living, Inc.		954,249		954,249		10/1/16
ZocDoc, Inc.		4,349,924		4,349,924		6/1/17
Subtotal:	20.7%	$	18,674,570	$ 18,674,570

Other Technology
21e6, LLC		$	4,582,302	$	4,582,302	4/1/17
Automatic Labs, Inc.		930,477		930,477		12/1/16
Beeline Bikes, Inc.		131,526		131,526		6/1/17
Daylight Solutions, Inc.		1,846,156		1,846,156		8/1/17
Ecologic Brands, Inc.		748,711		748,711		6/1/17
General Assembly, Inc.		2,367,242		2,367,242		12/1/16
InsideTrack, Inc.		609,572		609,572		3/1/17
Lumo BodyTech, Inc.		563,617		563,617		12/1/17
Neuehouse LLC		1,686,935		1,686,935		3/1/17
nWay, Inc.		687,283		687,283		3/1/17
Prana Holdings, Inc.		5,847,462		5,847,462		7/1/16
Pure Energies Group, Inc.		2,060,433		2,060,433		8/1/16
Scoot Networks, Inc.		197,003		197,003		3/1/17
Sproutling, Inc.		461,027		461,027		9/1/17
Tribogenics, Inc.		534,771		534,771		9/1/16
Wallaby Financial, Inc.		120,891		120,891		8/1/16



Subtotal:	25.9%	$	23,375,408	$ 23,375,408

Security
Agari Data, Inc.		$	1,185,651	$	1,185,651	9/1/17
Guardian Analytics, Inc.		2,830,728		2,830,728		1/1/18
Uplogix, Inc.		1,140,344		1,140,344		5/1/17
Venafi, Inc.		3,630,501		3,630,501		6/1/17
Voltage Security, Inc.		2,341,142		2,341,142		9/1/17
Subtotal:	12.3%	$	11,128,366	$ 11,128,366

Software
3Scale, Inc.		$	461,594	$	461,594	6/1/17
Apportable, Inc.		942,442		942,442		3/1/17
Brightpearl, Inc.		586,946		586,946		6/1/16
Ceros, Inc.		548,491		548,491		4/1/16
ClearPath, Inc.		350,931		350,931		5/1/16
Clypd, Inc.		698,640		698,640		11/1/16
Dataium, LLC		191,024		383,024		3/1/16
DropThought, Inc.		470,400		470,400		12/1/16
eCommera, Ltd.		4,728,123		4,728,123		3/1/17
Encoding.com, Inc.		654,004		654,004		11/1/16
Lulo Ventures, Inc.		1,371,075		1,371,075		9/1/16
MediaPlatform, Inc.		739,119		739,119		9/1/16
Nectar, Inc.		548,057		548,057		3/1/17
Neebula Systems LTD		548,999		548,999		2/1/17
OrderGroove, Inc.		1,091,513		1,091,513		12/1/16
Palantir Technologies, Inc.		9,116,472		9,116,472		4/1/16
SCVNGR, Inc.		2,241,250		2,241,250		10/1/16
SnapLogic, Inc.		2,020,736		2,020,736		7/1/16
SoundHound, Inc.		3,960,349		3,960,349		5/1/17
StreetLight Data, Inc.		700,099		700,099		4/1/17
Top Hat Monocle Corp.		812,627		812,627		7/1/16
Workspot, Inc.		201,111		201,111		9/1/16
ZeroTurnaround USA, Inc.		692,617		692,617		6/1/18
Subtotal:	37.3%	$	33,676,619	$ 33,868,619

Technology Services
955 Dreams, Inc.		$	691,819	$	691,819	6/1/17
Akademos, Inc.		858,103		858,103		6/1/17
BidPal, Inc.		758,051		758,051		12/1/15
Blazent, Inc.		761,803		761,803		5/1/16
Boost Media, Inc.		815,043		815,043		11/1/16
BountyJobs, Inc.		225,629		225,629		5/1/17
Callisto Media, Inc.		724,392		724,392		9/1/16
FSA Store, Inc.		720,502		720,502		9/1/17
Grassroots Unwired, Inc.		92,762		92,762		8/1/16
Maxi Mobility, Inc.		194,323		194,323		7/1/16



Rated People, Ltd.		775,710		775,710		12/1/16
Stackstorm Inc		260,298		260,298		8/1/17
TiqIQ, Inc.		237,061		237,061		7/1/17
Subtotal:	7.9%	$	7,115,496	$ 7,115,496

Wireless
AppStack, Inc.		$	298,243	$	298,243	12/1/15
Clementine, Inc.		230,908		230,908		3/1/17
GPShopper, LLC		473,369		473,369		7/1/17
InfoReach, Inc.		462,048		462,048		3/1/17
Physical Graph Corporation		1,825,746		1,825,746		4/1/17
Receivd, Inc.		466,123		466,123		1/1/17
SpiderCloud Wireless Inc.		3,779,999		3,779,999		1/1/17
Subtotal:	8.3%	$	7,536,436	$ 7,536,436

Total (Cost of $162,295,237):	178.1%	$	160,828,937	$ 162,295,237

*As of June 30, 2014, loans with a cost basis of $2.0 million and a fair value of $1.6 million were classified as non-accrual.

As of June 30, 2014, a number of loans represented greater than 5% of the Fund's net assets. The outstanding loan balances as of June 30, 2014 in 21e6, LLC of $4,582,302, Cayenne Medical, Inc. of $4,721,722, eCommera, Ltd. of $4,728,123, Mulberry Health, Inc. of $4,774,610, Palantir Technologies, Inc. of $9,116,472, Practice Fusion, Inc. of $5,717,085, Prana Holdings, Inc. of $5,847,462 and Quantcast Corp. of $5,696,978 represented 5.1%, 5.2%, 5.2%, 5.3%, 10.1%, 6.3%, 6.5% and 6.3% of the Fund's net assets, respectively. No other loan represented greater than 5% of the Fund's net assets.

All loans as of December 31, 2013 were to non-affiliates and consisted of the following:



	Percentage of	Estimated Fair		Par Value		Final
Borrower	Net Assets	Value 12/31/13		12/31/2013		Maturity Date
Carrier Networking
Vello Systems, Inc.		$	2,023,248	$	2,023,248	6/1/2016
Subtotal:	2.4%	$	2,023,248	$	2,023,248

Computers & Storage
Connected Data, Inc.		$	1,399,414	$	1,399,414	11/1/2016
Looxcie, Inc.		743,209		743,209		12/1/2015
Subtotal:	2.5%	$	2,142,623	$	2,142,623

Enterprise Networking
Apprion, Inc.		$	848,878	$	848,878	4/1/2016
Splashtop, Inc.		1,657,534		1,657,534		5/1/2016
Subtotal:	2.9%	$	2,506,412	$	2,506,412

Internet
Better Doctor, Inc.		$	472,915	$	472,915	6/1/2016



Carwoo!, Inc.		89,438		919,438		*
Change.org, Inc.		2,375,933		2,375,933		11/1/2016
CustomMade, Inc.		1,880,757		1,880,757		5/1/2017
Desti, Inc.		395,283		395,283		5/1/2016
Dezine, Inc.		-		142,590		*
FanDuel, Inc.		1,880,835		1,880,835		9/1/2016
Fast Labs, Inc.		229,448		229,448		1/1/2017
Good Eggs, Inc.		452,593		452,593		5/1/2016
Grovo Learning, Inc.		701,522		701,522		3/1/2017
Jarvis Labs, Inc.		234,471		234,471		10/1/2016
Kitsy Lane, Inc.		304,957		304,957		12/1/2016
Kiwi Crate, Inc.		1,419,972		1,419,972		10/1/2016
Komli Media, Inc.		1,043,481		1,043,481		9/1/2015
LocalResponse, Inc.		611,036		611,036		3/1/2016
MeetMe, Inc.		2,110,116		2,110,116		4/1/2016
Modasuite, Inc.		1,910,112		1,910,112		7/1/2016
nPario, Inc.		99,940		397,940		*
Osix Corporation		108,399		108,399		10/1/2016
Piryx, Inc.		897,206		897,206		9/1/2016
Pixalate, Inc.		217,736		217,736		11/1/2016
Playstudios, Inc.		400,393		400,393		6/1/2017
Pleygo, Inc.		209,632		209,632		12/1/2016
Quantcast Corp.		5,577,736		5,577,736		4/1/2017
Radius Intelligence, Inc.		823,129		823,129		3/1/2016
Retail Innovation Group, Inc.		2,372,213		2,372,213		7/1/2016
Schooltube, Inc.		63,741		103,741		5/1/2016
Session M, Inc.		1,885,531		1,885,531		2/1/2017
Smart Lunches, Inc.		232,785		232,785		6/1/2016
Sociable Labs, Inc.		459,559		459,559		7/1/2016
StitchFix, Inc.		713,806		713,806		8/1/2016
TalentBin, Inc.		228,709		228,709		7/1/2017
Waluzi, Inc.		109,637		109,637		8/1/2016
We Heart It, Inc.		1,113,290		1,113,290		2/1/2017
Weddington Way, Inc.		1,209,857		1,209,857		11/1/2016
YouDocs Beauty, Inc.		1,192,798		1,192,798		6/1/2016
Zazma, Inc.		1,820,045		1,820,045		5/1/2017
Subtotal:	41.8%	$	35,849,011	$	37,159,601

Medical Devices
AxioMed, Inc.		$	2,683,106	$	2,683,106	11/1/2016
Subtotal:	3.1%	$	2,683,106	$	2,683,106

Other Healthcare
Caring.com, Inc.		$	3,758,873	$	3,758,873	6/1/2017
Cogito Health, Inc.		560,265		560,265		4/1/2017
Health Integrated, Inc.		1,360,207		1,360,207		2/1/2017
Mulberry Health, Inc.		4,738,816		4,738,816		12/1/2017
Practice Fusion, Inc.		6,902,052		6,902,052		6/1/2016
Project Healthy Living, Inc.		943,454		943,454		10/1/2016
Subtotal:	21.3%	$	18,263,667	$	18,263,667




Other Technology
Automatic Labs, Inc.		$	937,315	$	937,315	12/1/2016
Ecologic Brands, Inc.		850,527		850,527		6/1/2017
General Assembly, Inc.		2,325,684		2,325,684		12/1/2016
Prana Holdings, Inc.		7,019,273		7,019,273		7/1/2016
Pure Energies Group, Inc.		1,419,062		1,419,062		6/1/2016
Tribogenics, Inc.		577,918		577,918		9/1/2016
Wallaby Financial, Inc.		134,111		134,111		8/1/2016
Subtotal:	15.5%	$	13,263,890	$	13,263,890

Security
Agari Data, Inc.		$	453,674	$	453,674	5/1/2017
Subtotal:	0.5%	$	453,674	$	453,674

Software
Apportable, Inc.		$	209,718	$	209,718	12/1/2016
Brightpearl, Inc.		706,581		706,581		6/1/2016
Ceros, Inc.		668,612		668,612		4/1/2016
ClearPath, Inc.		418,634		418,634		5/1/2016
Clypd, Inc.		712,353		712,353		11/1/2016
Dataium, LLC		474,082		474,082		3/1/2016
eCommera, LTD.		5,151,682		5,151,682		3/1/2017
Encoding.com, Inc.		714,472		714,472		11/1/2016
Lulo Ventures, Inc.		1,401,588		1,401,588		11/1/2016
MediaPlatform, Inc.		641,446		641,446		3/1/2016
OrderGroove, Inc.		1,184,088		1,184,088		12/1/2016
Palantir Technologies, Inc.		11,167,398		11,167,399		4/1/2016
SCVNGR, Inc.		2,352,638		2,352,638		10/1/2016
SnapLogic, Inc.		2,330,274		2,330,274		7/1/2016
SoundHound, Inc.		4,180,336		4,180,337		5/1/2017
StreetLight Data, Inc.		228,182		228,182		12/1/2016
Top Hat Monocle Corp.		944,150		944,150		7/1/2016
Workspot, Inc.		213,048		213,048		9/1/2016
Subtotal:	39.3%	$	33,699,282	$ 33,699,284

Technology Services
Akademos, Inc.		$	827,130	$	827,130	6/1/2017
BidPal, Inc.		969,754		969,754		12/1/2015
Blazent, Inc.		927,116		927,116		5/1/2016
Boost Media, Inc.		893,452		893,452		11/1/2016
Callisto Media, Inc.		831,240		831,240		9/1/2016
FSA Store, Inc.		709,863		709,863		9/1/2017
Grassroots Unwired, Inc.		106,696		106,696		8/1/2016
Maxi Mobility, Inc.		222,904		222,904		7/1/2016
Rated People, Ltd.		763,615		763,615		12/1/2016
Subtotal:	7.3%	$ 6,251,770		$ 6,251,770

Wireless
AppStack, Inc.		$ 370,818		$ 370,818		12/1/2015



GPShopper, LLC		468,495		468,495	7/1/2017
Physical Graph Corporation		1,901,737		1,901,737	4/1/2017
Receivd, Inc.		223,346		223,346	11/1/2016
SpiderCloud Wireless Inc.		2,291,176		2,291,176	12/1/2016
Subtotal:	6.1%	$ 5,255,572		$ 5,255,572

Total (Cost of $123,702,847):	142.7%	$	122,392,255	$ 123,702,847

*As of December 31, 2013, loans with a cost basis of $1.5 million and a fair value of $0.2 million were classified as non-accrual.

As of June 30, 2014, a number of loans represented greater than 5% of the Fund's net assets. The outstanding loan balances as of December 31, 2013 in eCommera, Ltd. of $5,151,682, Mulberry Health, Inc. of $4,738,816, Palantir Technologies, Inc. of $11,167,398, Practice Fusion, Inc. of $6,902,052, Prana Holdings, Inc. of $7,019,273, and Quantcast, Corp. of $5,577,736 represented 6.0%, 5.5%, 13.0%, 8.1%, 8.2% and 6.5% of the Fund's net assets, respectively. No other loan represented greater than 5% of the Fund's net assets.

The Fund provides asset-based financing primarily to start-up and emerging growth venture-capital-backed companies. These loans are generally secured by assets of the borrowers. As a result, the Fund is subject to general credit risk associated with such companies. As of June 30, 2014 and December 31, 2013, the Fund had unexpired unfunded commitments to borrowers of $96.1 million and $56.4 million, respectively.

Valuation Hierarchy

The Fund categorizes its fair value measurements according to a three-level hierarchy as required by GAAP. The hierarchy prioritizes the inputs used by the Fund's valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:



Level 1		Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.
Level 2		Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.
Level 3		Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Transfer of investments between levels of the fair value hierarchy is recorded on the actual date of the event or change in circumstances that caused the transfer. There were no transfers in and out of Level 1, 2, and 3 during the period ended June 30, 2014.

The Fund's cash equivalents were valued at the traded net asset value of the money market mutual fund. As a result, these measurements are classified as Level 1. The Fund's investments in the interest rate cap are based on quotes

from the market makers and therefore, are classified as Level 2. The Fund uses estimated exit values when determining the value of its investments. Because loan transactions are individually negotiated and unique, and there is no market in which these assets trade, the inputs for these assets, which are discussed in the Valuation Methods listed above, are classified as Level 3.

The following tables provide quantitative information about the Fund's Level 3 fair value measurements of its investments as of June 30, 2014 and December 31, 2013. In addition to the techniques and inputs noted in the table below, the Fund may also use other valuation techniques and methodologies when determining its fair value

measurements. The below tables are not intended to be all-inclusive, but rather provides information on the significant Level 3 inputs as they relate to the Fund's fair value measurements.



Investment Type - Level 3	Fair Value at	Valuation Techniques/		Weighted
Debt Investments	6/30/2014	Methodologies	Unobservable Input	Average/Range

Computers and Storage	$8,323,279	Hypothetical market analysis	Hypothetical market coupon rate	19%

Internet	$40,344,513	Hypothetical market analysis	Hypothetical market coupon rate	15%
		Liquidation	Investment Collateral	$38,980 - $68,222

Medical Devices	$7,035,624	Hypothetical market analysis	Hypothetical market coupon rate	15%

		Liquidation	Investment Collateral	$1,861,487
Other Healthcare	$18,674,570	Hypothetical market analysis	Hypothetical market coupon rate	15%

Other Technology	$23,375,408	Hypothetical market analysis	Hypothetical market coupon rate	15%

Security	$11,128,366	Hypothetical market analysis	Hypothetical market coupon rate	16%

Software	$33,676,619	Hypothetical market analysis	Hypothetical market coupon rate	15%

Technology Services	$7,115,496	Hypothetical market analysis	Hypothetical market coupon rate	16%

Wireless	$7,536,436	Hypothetical market analysis	Hypothetical market coupon rate	15%

Other*	$3,618,626	Hypothetical market analysis	Hypothetical market coupon rate	17%
		Liquidation	Investment Collateral	$1,457,980
	$160,828,937

*As of June 30, 2014, other loans were comprised of companies in the Carrier Networking and Enterprise Networking industries.



Investment Type - Level 3	Fair Value at	Valuation Techniques/	Unobservable	Weighted Average/
Debt Investments	December 31, 2013	Methodologies	Input	Range

Computers and Storage	$2,142,623	Hypothetical market analysis	Hypothetical market coupon rate	17%

Enterprise Networking	$2,506,412	Hypothetical market analysis	Hypothetical market coupon rate	17%

Internet	$35,849,011	Hypothetical market analysis	Hypothetical market coupon rate	16%
		Liquidation	Investment Collateral	$0 - $99,940

Other Healthcare	$18,263,667	Hypothetical market analysis	Hypothetical market coupon rate	14%

Other Technology	$13,263,890	Hypothetical market analysis	Hypothetical market coupon rate	14%

Software	$33,699,282	Hypothetical market analysis	Hypothetical market coupon rate	14%

Technology Services	$6,251,770	Hypothetical market analysis	Hypothetical market coupon rate	16%

Wireless	$5,255,572	Hypothetical market analysis	Hypothetical market coupon rate	15%

Other*	$5,160,028	Hypothetical market analysis	Hypothetical market coupon rate	20%
	$122,392,255

* As of December 31, 2013, other loans were comprised of companies in the carrier networking, medical devices and security industries.

The following table presents the balances of assets as of June 30, 2014 and December 31, 2013 measured at fair value on a recurring basis:



As of June 30, 2014	Level 1		Level 2		Level 3		Total
ASSETS:
Loans*	$	—	$	—	$	160,828,937	$	160,828,937
Interest rate cap	—		289,194		—		289,194
Cash equivalents	5,142,340		—		—		5,142,340
Total	$	5,142,340	$	289,194	$	160,828,937	$	166,260,471



As of December 31, 2013	Level 1		Level 2		Level 3		Total
ASSETS:
Loans*	$	—	$	—	$	122,392,255	$	122,392,255
Interest rate cap	—		286,994		—		286,994
Cash equivalents	6,380,162		—		—		6,380,162
Total	$	6,380,162	$	286,994	$	122,392,255	$	129,059,411

*For a detailed listing of borrowers comprising this amount, please refer to Note 3, Summary of Investments.

The following table provides a summary of changes in Level 3 assets measured at fair value on a recurring basis:



	For the Three Months Ended June 30, 2014						For the Six Months Ended June 30, 2014
	For the Three Months Ended June 30, 2014						For the Six Months Ended June 30, 2014
	Loans			Warrants			Loans			Warrants
Beginning balance	$	145,748,354		$	—		$	122,392,255		$	—
Acquisitions and originations	30,075,000			1,907,920			61,825,000			4,932,030
Principal reductions	(13,683,117		)	—			(21,914,722		)
Distribution to shareholder	—			(1,907,920		)				(4,932,030		)
Net change in unrealized gain from investments	(1,311,300		)	—			(155,710		)	—
Net realized loss from investments	—			—			(1,317,886		)	—
Ending balance	$	160,828,937		$	—		$	160,828,937		$	—
Net change in unrealized loss on investments relating to investments still held at June 30, 2014	$	(1,311,300	)				$	(1,426,300	)



	For the Three Months Ended June 30, 2013						For the Six Months Ended June 30, 2013
	For the Three Months Ended June 30, 2013						For the Six Months Ended June 30, 2013
	Loans			Warrants			Loans			Warrants
Beginning balance	$	15,611,544		$	—		$	398,350		$	—
Acquisitions and originations	57,300,000			3,983,841			73,890,000			5,226,252
Principal reductions	(4,137,775		)	—			(5,514,581		)	—
Distribution to shareholder	—			(3,983,841		)	—			(5,226,252		)
Net change in unrealized gain from investments	—			—			—			—
Net realized loss from investments	—			—			—			—
Ending balance	$	68,773,769		$	—		$	68,773,769		$	—
Net change in unrealized loss on investments relating to investments still held at June 30, 2013	—						$	—


4.	EARNINGS PER SHARE

Basic earnings per share are computed by dividing net increase (decrease) in net assets resulting from operations by the weighted average common shares outstanding. Diluted earnings per share are computed by dividing net increase(decrease) in net assets resulting from operations by the weighted average common shares outstanding, including the dilutive effects of potential common shares (e.g., stock options). The Fund held no instruments that would be potential common shares; thus, reported basic and diluted earnings per share are the same.


5.	CAPITAL STOCK

As of June 30, 2014 and December 31, 2013, there were 10,000,000 shares of $0.001 par value common stock authorized, and 100,000 shares issued and outstanding. Total committed capital of the Company, as of June 30, 2014 and December 31, 2013, was $375.0 million. Total contributed capital to the Company through June 30, 2014 and December 31, 2013 was $112.5 million and $103.1 million, of which $104.4 million and $96.9 million were contributed to the Fund, respectively.

The chart below shows the distributions of the Fund for the six months ended June 30, 2014 and 2013.



	For the Six Months Ended June 30, 2014		For the Six Months Ended June 30, 2013
Cash distributions	$	3,000,000	$	—
Distributions of equity securities	4,932,030		5,226,252

Total distributions to shareholder	$	7,932,030	$	5,226,252

Final classification of the distributions as either a return of capital or a distribution of income is an annual determination made at the end of each year dependent upon the Fund's current year and cumulative earnings and profits.

6. DEBT FACILITY

The Fund has entered into a syndicated loan agreement led by Wells Fargo, N.A. and Union Bank, N.A. that established a secured revolving loan facility in an initial amount of up to $125,000,000 with the option to request that the lenders providing the facility increase the borrowing availability thereunder to no more than $300,000,000 in the aggregate, as commitments may be obtained. Borrowings by the Fund will be collateralized by the property and other assets of the Fund. Loans under the facility may be, at the option of the Fund, either Reference Rate or LIBOR loans. The Fund will pay interest on its borrowings and will also pay a fee on the unused portion of the facility.

The facility terminates on July 18, 2016, but can be accelerated in the event of default, such as failure by the Fund to make timely interest or principal payments. As of June 30, 2014 and December 31, 2013, $76.0 million and $43.0 million was outstanding under the facility, respectively.

Borrowings under the facility are collateralized by receivables under loans advanced by the Fund with assignment to the financial institution, plus other assets of the Fund. Such borrowings will bear interest at an annual rate of either LIBOR plus 2.25% or the Reference Rate plus 1.25%. The Fund pays an unused line fee of 0.25% of the total unused commitment amount on a quarterly basis.

Bank fees and other costs of $1.3 million were incurred in connection with the facility. The bank fees and other costs incurred have been capitalized and are amortized to interest expense on a straight line basis over the expected life of the facility. As of June 30, 2014, the remaining unamortized fees and costs of $0.9 million are being amortized over the expected life of the facility (July 2016).

The facility is revolving and as such does not have a specified repayment schedule, although advances are secured by the assets of the Fund and thus repayments will be required as assets decline. The facility contains various covenants including financial covenants related to: (i) minimum debt service coverage ratio, (ii) interest coverage ratio, (iii) maximum loan loss reserves, and (iv) unfunded commitment ratio. There are also various restrictive covenants, including limitations on (i) the incurrence of liens, (ii) consolidations, mergers and asset sales, and (iii) capital expenditures. As of June 30, 2014, Management believes that the Fund was in compliance with these covenants.

The following is the summary of the outstanding facility draws as of June 30, 2014:



Roll-Over Date	Amount		Maturity Date	Floating Interest Rate
May 12, 2014	$	70,000,000	8/12/2014*	2.48%
June 30, 2014	$	6,000,000	7/3/2014**	4.50%
TOTAL OUTSTANDING	$	76,000,000

* Management intends to roll the outstanding amount for a 90-day LIBOR loan, maturing on November 12, 2014

** The Fund repaid the $6.0 million loan on July 3, 2014.

7. INTEREST RATE CAP AGREEMENT

As of June 30, 2014, the Fund has entered into interest rate cap transactions with Union Bank, N.A. with a notional principal amount of $76 million, to cap floating interest rates at 0.7%. The purpose of the interest rate cap agreement is to protect the Fund against rising interest rates, as the Fund originates loans with fixed interest rates. The Fund continues to adjust the notional principal amount as the outstanding balance under the debt facility changes. As of June 30, 2014, the notional principal amount was $76 million. The Fund paid upfront fees of $0.6 million which are amortized on a straight line basis over the life of the instrument and receives from the counterparty a payment of interest amounts above the 0.7% cap based on 90-day LIBOR. Payments, if necessary are made quarterly and will terminate on July 18, 2016.

As of June 30, 2014 and December 31, 2013, the fair value of the Fund's derivative financial instruments was as follows:

Asset Derivatives

June 30, 2014

December 31, 2013

Derivatives Not Designated as Hedging Instruments:

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Interest rate cap agreement

Other Assets

289,194

Other Assets

286,994

For the three and six months ended June 30, 2014 , the derivative financial instruments had the following effect on the Condensed Statements of Operations:



Derivatives Not Designated as Hedging Instruments:	Location of Loss Recognized	For the Three Months Ended June 30, 2014			For the Six Months Ended June 30, 2014
Interest rate cap agreement	Net change in unrealized loss from hedging activities	$	(117,830	)	$	(151,504	)

8. FINANCIAL HIGHLIGHTS

GAAP requires disclosure of financial highlights of the Fund for the periods presented, the three and six months ended June 30, 2014 and 2013. The total rate of return is defined as the return based on the change in value during the period of a theoretical investment made at the beginning of the period. The total rate of return assumes a constant rate of return for the Fund during the period reported and weights each cash flow by the amount of time held in the Fund. This required methodology differs from an internal rate of return.

The ratios of expenses and net investment income (loss) to average net assets, calculated below, are annualized and are computed based upon the aggregate weighted average net assets of the Fund for the periods presented. Net investment income (loss) is inclusive of all investment income net of expenses, and excludes realized or unrealized gains and losses.

Beginning and ending net asset values per share are based on the beginning and ending number of shares outstanding. Other per share information is calculated based upon the aggregate weighted average net assets of the Fund for the periods presented.

The following per share data and ratios have been derived from the information provided in the financial statements.



	For the Three Months Ended June 30, 2014			For the Three Months Ended June 30, 2013			For the Six Months Ended June 30, 2014			For the Six Months Ended June 30, 2013

Total return **	3.09		%	(0.99		)%	5.80		%	(21.86		)%

Per share amounts:
Net asset value, beginning of period	$	870.08		$	287.88		$	857.69		$	72.27
Net investment income (loss)	41.45			(5.32		)	66.04			(27.29		)
Net realized loss and net change in unrealized gain from investments and hedging activities	(14.29		)	—			(16.25		)	—
Net increase (decrease) in net assets from operations	27.16			(5.32		)	49.79			(27.29		)
Distributions of income to shareholder	(41.45		)	—			(52.86		)	—
Return of capital to shareholder	(7.63		)	(39.84		)	(26.46		)	(52.26		)
Contributions from shareholder	55.00			525.00			75.00			775.00

Net asset value, end of period	$	903.16		$	767.72		$	903.16		$	767.72

Net assets, end of period	$	90,315,713		$	76,772,062		$	90,315,713		$	76,772,062

Ratios to average net assets:

Expenses*	13.80		%	16.71		%	13.67		%	27.65		%
Net investment income (loss)*	18.63		%	(3.62		)%	15.09		%	(15.17		)%
* Annualized
** Total return amounts presented above are not annualized.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

In addition to the historical information contained herein, the information in this Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of the securities laws. These forward-looking statements reflect the current view of Venture Lending & Leasing VII, Inc. (the “Fund”) with respect to future events and financial performance and are subject to a number of risks and uncertainties, many of which are beyond the Fund's control. All statements, other than statements of historical facts included in this report, regarding the strategy, future operations, financial position, estimated revenues, projected costs, prospects, plans and objectives of the Fund are forward-looking statements. When used in this report, the words “will”, “believe”, “anticipate”, “intend”, “estimate”, “expect”, “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. All forward-looking statements speak only as of the date of this report. The Fund does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

The reader of this Quarterly Report should understand that all such forward-looking statements are subject to various uncertainties and risks that could affect their outcome. The Fund's actual results could differ materially from those suggested by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, variances in the actual versus projected growth in assets, return on assets, loan losses, expenses, rates charged on loans and earned on securities investments and competition. This entire Quarterly Report should be read to put such forward-looking statements in context and to gain a more complete understanding of the uncertainties and risks involved in the Fund's business.

Overview

The Fund is 100% owned by Venture Lending & Leasing VII, LLC (the “Company”). The Fund's shares of Common Stock, at $0.001 par value, were sold to its sole shareholder, the Company, under a stock purchase agreement. The Fund has issued 100,000 of the Fund's 10,000,000 authorized shares. The Company may make additional capital contributions to the Fund.

The Fund is a financial services company primarily providing financing and advisory services to a variety of carefully selected venture-backed companies primarily located throughout the United States with a focus on growth-oriented companies. The Fund's portfolio is expected to become more diversified and consists of companies in the communications, information services, media, and technology, including software and technology-enabled business services, bio-technology, and medical devices industry sectors, among others. The Fund's capital is generally used by its portfolio companies to finance acquisitions of fixed assets and/or for working capital. On December 18, 2012, the Fund completed its first closing of capital contributions, made its first investments, and became a non-diversified, closed-end investment company that elected to be treated as a business development company under the Investment Company Act of 1940. The Fund believes that it qualifies to be treated for federal income tax purposes as a Regulated Investment Company (“RIC”) under the Internal Revenue Code (the "Code") and has made the RIC election with the filing of its federal corporate income tax return for 2013. Pursuant to this election, the Fund generally will not have to pay corporate-level taxes on any income it distributes to the Company as dividends, allowing the Company to substantially reduce or eliminate its corporate-level tax liability.

The Fund will seek to continue to meet the ongoing requirements, including the diversification requirements, to qualify as a RIC under the Code. If the Fund fails to meet these requirements, it would be taxed as an ordinary corporation on its taxable income for that year (even if that income were distributed to the Company) and all distributions out of its earnings and profits would be taxable to the Members of the Company as ordinary income; thus, such income would be subject to a double layer of tax. There is no assurance that the Fund will meet the ongoing requirements to qualify as a RIC for tax purposes.

The Fund's investment objective is to achieve superior risk adjusted investment returns. The Fund seeks to achieve its investment objective by providing debt financing to portfolio companies. Since inception, the Fund's investing activities have focused primarily on private debt securities. The Fund generally receives warrants to acquire equity securities in connection with its portfolio investments. The Fund distributes these warrants to the

Company upon receipt. The Fund also has guidelines for the percentages of total assets which will be invested in different types of assets.

The portfolio investments of the Fund consist of debt financing to venture-capital backed companies. The borrower's ability to repay its loans may be adversely impacted by a number of factors, and as a result, the loan may not fully be repaid. Furthermore, the Fund's security interest in any collateral over the borrower's assets may be insufficient to make up any shortfall in payments.

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

The Manager also serves as investment manager for Fund VI. The Fund's Board determined that so long as Fund VI has capital available to invest in loan transactions with final maturities earlier than December 31, 2020 (the date on which Fund VI will be dissolved), the Fund will invest in each portfolio company in which Fund VI invests (“Investments”). Initially the amount of each Investment has been allocated 50% to the Fund and 50% to Fund VI so long as Fund VI has capital available to invest. After June 28, 2014, Fund VI is no longer permitted to enter into new commitments to borrowers; however, Fund VI will be permitted to fund existing commitments. While investing the Fund's capital in the same companies in which Fund VI is also investing could provide the Fund with greater diversification and access to larger transactions, it could also result in a slower pace of investment than would be the case if the Fund were investing in companies by itself.

To the extent that clients, other than Fund VI, advised by the Manager (but in which the Manager has no proprietary interest) invest in opportunities available to the Fund, the Manager will allocate such opportunities among the Fund and such other clients in a manner deemed fair and equitable considering all of the circumstances in accordance with procedures approved by the Fund's Board (including a majority of the disinterested directors).

Critical Accounting Policies

We identified and determined the most critical accounting principles upon which our financial statements depend by considering accounting policies that involve the most complex or subjective decisions or assessments. Such critical accounting policies relate to the valuation of loans and treatment of non-accrual loans.

Loans are held at estimated fair value as determined by Management, in accordance with the valuation methods described in the valuation of loans section of Note 2 in the Fund's financial statements (Summary of Significant Accounting Policies). Critical factors in determining the fair value of a loan include payment history, collateral position, financial strength of the borrower, prospects for the borrower raising future equity rounds, likelihood of sale or acquisition of the borrower, and length of expected holding period of the loan, as well as an evaluation of the general interest rate environment. The actual value of the loans may differ from Management's estimates, which would affect net income as well as assets.

Results of Operations - For the Three and Six Months Ended June 30, 2014 and 2013

Total investment income for the three months ended June 30, 2014 and 2013 was $7.2 million and $1.9 million, respectively which primarily consisted of interest on the venture loans outstanding. The remaining income consisted of interest and dividends on the temporary investment of cash and recognition of previously unamortized warrants. The income was primarily driven by the level of average loans outstanding for the three months ended June 30, 2014 and 2013 of $154.8 million and $46.7 million, respectively.

Total investment income for the six months ended June 30, 2014 and 2013 was $12.6 million and $2.2 million, respectively which primarily consisted of interest on the venture loans outstanding. The remaining income consisted of interest and dividends on the temporary investment of cash and recognition of previously unamortized warrants. The income was primarily driven by the level of average loans outstanding for the six months ended June 30, 2014 and 2013 of $144.7 million and $28.0 million, respectively.

Management fees for the three months ended June 30, 2014 and 2013 were $2.3 million. Management fees for the six months ended June 30, 2014 and 2013 were $4.7 million. Until December 18, 2014, management fees are calculated as 2.5 percent of the committed capital of the Company. Starting on December 18, 2014, management fees will be calculated as 2.5 percent of the Fund's total assets.

Interest expense was $0.7 million and $0 for the three months ended June 30, 2014 and 2013, respectively. Interest expense was $1.2 million and $0 for the six months ended June 30, 2014 and 2013, respectively. Interest expense was comprised of amounts related to interest on debt amounts drawn down, unused line fees and amounts amortized from deferred fees incurred in conjunction with the debt line.

The banking and professional fees were less than $0.1 million for the three months ended June 30, 2014 and 2013, respectively. The banking and professional fees were less than $0.1 million and $0.2 million for the six months ended June 30, 2014 and 2013, respectively. The banking and professional fees were comprised of legal, audit, banking and other professional fees.

Total other operating expenses were less than $0.1 million for the three and six months ended June 30, 2014 and 2013.

Net investment income (loss) for the three months ended June 30, 2014 and 2013 was $4.1 million and $(0.5) million, respectively. Net investment income (loss) for the six months ended June 30, 2014 and 2013 was $6.6 million and $(2.7) million, respectively.

Total net realized gain/loss from investments was $0 for the three months ended June 30, 2014 and 2013, respectively. Total net realized loss from investments was $1.3 million and $0 for the six months ended June 30, 2014 and 2013, respectively.

Net change in unrealized loss from investments was $1.3 million and $0 for the three months ended June 30, 2014 and 2013, respectively. Net change in unrealized loss from investments was $0.2 million and $0 for the six months ended June 30, 2014 and 2013, respectively. The unrealized loss consists of fair market value adjustments to loans and the reversal of fair market value adjustments previously taken against loans now written off and paid off.

Net change in unrealized loss from hedging activities was $0.1 million and $0 for the three months ended June 30, 2014 and 2013, respectively. Net change in unrealized loss from hedging activities was $0.2 million and $0 for the six months ended June 30, 2014 and 2013, respectively. The Fund entered into interest rate cap transactions with Union Bank, N.A. to cap the floating rate liabilities at a fixed rate (see Note 7 in the Fund's financial statements).

Net increase (decrease) in net assets resulting from operations for the three months ended June 30, 2014 and 2013 was $2.7 million and $(0.5) million, respectively. On a per share basis, the net increase (decrease) in net assets resulting from operations was $27.16 and $(5.32) for the three months ended June 30, 2014 and 2013.

Net increase (decrease) in net assets resulting from operations for the six months ended June 30, 2014 and 2013 was $5.0 million and $(2.7) million, respectively. On a per share basis, the net increase (decrease) in net assets resulting from operations was $49.79 and $(27.29) for the six months ended June 30, 2014 and 2013, respectively.

Liquidity and Capital Resources – June 30, 2014 and December 31, 2013

Total capital contributed to the Fund was $104.4 million and $96.9 million as of June 30, 2014 and December 31, 2013, respectively. Committed capital to the Company as of June 30, 2014 and December 31, 2013 was $375.0 million, of which $112.5 million and $103.1 million had been called as of June 30, 2014 and December 31, 2013, respectively. The remaining $262.5 million of committed capital outstanding as of June 30,

2014 is due to expire in December 2017 as the five year anniversary will have passed, at which time no further capital can be called.

As of June 30, 2014 and December 31, 2013, 3.0% and 4.8%, respectively, of the Fund's assets consisted of cash and cash equivalents. The Fund invested its assets in venture loans during the six months ended June 30, 2014. Amounts disbursed under the Fund's loan commitments totaled approximately $61.9 million during the six months ended June 30, 2014. Net loan amounts outstanding after amortization increased by approximately $38.4 million for the same period. Unexpired, unfunded commitments totaled approximately $96.1 million as of June 30, 2014.



As of	Cumulative Amount Disbursed	Principal Reductions and Fair Market Adjustments	Balance Outstanding - Fair Value	Unexpired Unfunded Commitments
June 30, 2014	$205.4 million	$44.6 million	$160.8 million	$96.1 million
December 31, 2013	$143.5 million	$21.1 million	$122.4 million	$56.4 million

Because venture loans are privately negotiated transactions, investments in these assets are relatively illiquid. It is the Fund's experience that not all unfunded commitments will be used by borrowers.

The Fund will seek to meet the ongoing requirements to qualify for the special pass-through status available to RICs under the Internal Revenue Code, and thus to be relieved of federal income tax on that part of its net investment income and realized capital gains that it distributes to the Company. To qualify as a RIC, the Fund must distribute to the Company for each taxable year at least 90% of its investment company taxable income (consisting generally of net investment income and net short-term capital gain) (“Distribution Requirement”). To the extent that the terms of the Fund's venture loans provide for the receipt by the Fund of additional interest at the end of the loan term or provide for the receipt by the Fund of a purchase price for the asset at the end of the loan term (“residual income”), the Fund would be required to accrue such residual income over the life of the loan, and to include such accrued undistributed income in its gross income for each taxable year even if it receives no portion of such residual income in that year. Thus, in order to meet the Distribution Requirement and avoid payment of income taxes or an excise tax on undistributed income, the Fund may be required in a particular year to distribute as a dividend an amount in excess of the total amount of income it actually receives. Those distributions will be made from the Fund's cash assets, from amounts received through amortization of loans or from borrowed funds.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Fund's business activities contain elements of risk. The Fund considers the principal types of market risk to be interest rate risk and credit risk. The Fund considers the management of risk essential to conducting its business and to maintaining profitability. Accordingly, the Fund's risk management procedures are designed to identify and analyze the Fund's risks, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs.

The Fund manages its market risk by maintaining a portfolio that is diverse by industry, size of investment, stage of development, and borrower. The Fund has limited exposure to public market price fluctuations as the Fund primarily invests in private business enterprises and the Fund generally distributes all equity securities upon receipt to the Company.

The Fund's investments are subject to market risk based on several factors, including, but not limited to, the investment's credit history, available cash, support of the borrower's underlying investors, available liquidity, "burn rate", revenue income, security interest, secondary markets for collateral, the size of the loan, and term of the loan.

The Fund's sensitivity to changes in interest rates is regularly monitored and analyzed by measuring the characteristics of assets and liabilities. The Fund utilizes various methods to assess interest rate risk in terms of the potential effect on interest income net of interest expense, the value of net assets and the value at risk in an effort to

ensure that the Fund is insulated from any significant adverse effects from changes in interest rates. At June 30, 2014, the outstanding debt balance was $76.0 million with interest based on a weighted average rate of 0.47%, for which the Fund had an interest rate cap in place at 0.70%, leaving our maximum exposure to interest rate sensitivity at 0.23%, which we do not believe is material to the financial statements.

Although Management believes that this measure is indicative of the Fund's sensitivity to interest rate changes, it makes estimates to adjust for potential changes in credit quality, size and composition of the balance sheet and other business developments that could affect net income. Accordingly, no assurances can be given that actual results would not differ materially from the potential outcome simulated by these estimates.

Item 4. Controls and Procedures:

Evaluation of Disclosure Controls and Procedures:

As of the end of the period covered by this quarterly report on Form 10-Q, the Fund's chief executive officer and chief financial officer conducted an evaluation of the Fund's disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934). Based upon this evaluation, the Fund's chief executive officer and chief financial officer concluded that the Fund's disclosure controls and procedures were effective in timely alerting them of any material information relating to the Fund that is required to be disclosed by the Fund in the reports it files or submits under the Securities Exchange Act of 1934.

Changes in Internal Controls:

There were no changes in the Fund's internal controls or in other factors that could materially affect these controls during the period covered by this quarterly report on Form 10-Q.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The Fund may become party to certain lawsuits from time to time in the normal course of business. While the

outcome of any legal proceedings cannot at this time be predicted with certainty, the Fund does not expect any such

proceedings will have a material effect upon the Fund's financial condition or results of operation. Management is

not aware of any pending legal proceedings involving the Fund.

Item 1A. Risk Factors

See item 1A - 'Risk Factors' in the Fund's 2013 Annual Report on Form 10-K for a detailed description of the risks attendant to the Fund and its business. There were no material changes to these factors during the three and six months ended June 30, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Prior to the Fund's commencement of operations on December 18, 2012, the Fund sold 100,000 shares to the Fund's sole shareholder, the Company, for $25,000 in July 2012. No other shares of the Fund have been sold; however, the Fund received an additional $104.4 million of paid in capital during the period from December 18, 2012 through June 30, 2014, which is expected to be used to acquire venture loans and fund operations.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Issues

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits



Exhibit Number	Description
3(i)	Articles of Incorporation of the Fund as filed with the Maryland Secretary of State on June 21, 2012, incorporated by reference to the Fund's Form 10 filed with the Securities and Exchange Commission on September 19, 2012.
3(ii)	Bylaws of the Fund, incorporated by reference to the Fund's Form 10 filed with the Securities and Exchange Commission on September 19, 2012.
4.1	Form of Purchase Agreement between the Fund and the Company, incorporated by reference to the Fund's Registration Statement on Form 10 filed with the Securities and Exchange Commission on September 19, 2012.
31.1-32.2	Certifications pursuant to The Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized.

VENTURE LENDING & LEASING VII, INC.

(Registrant)



By:	/s/ Maurice C. Werdegar	By:	/s/ Martin D. Eng
Maurice C. Werdegar		Martin D. Eng
President and Chief Executive Officer		Chief Financial Officer
Date:	August 8, 2014	Date:	August 8, 2014

EXHIBIT INDEX



Exhibit Number	Description
3(i)	Articles of Incorporation of the Fund as filed with the Maryland Secretary of State on June 21, 2012, incorporated by reference to the Fund's Form 10 filed with the Securities and Exchange Commission on September 19, 2012.
3(ii)	Bylaws of the Fund, incorporated by reference to the Fund's Form 10 filed with the Securities and Exchange Commission on September 19, 2012.
4.1	Form of Purchase Agreement between the Fund and the Company, incorporated by reference to the Fund's Registration Statement on Form 10 filed with the Securities and Exchange Commission on September 19, 2012.
31.1-32.2	Certifications pursuant to The Sarbanes-Oxley Act of 2002.

Venture Lending & Leasing VII, Inc. - FORM 10-Q - August 8, 2014

Attached files

Venture Lending & Leasing VII, Inc. Reports