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Safeguard Scientifics Inc (NYSE:SFE)
Q3 2020 Earnings Call
Nov 5, 2020, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Safeguard Scientifics' Third Quarter 2020 Financial Results Conference Call. [Operator Instructions]

I would now like to turn the conference over to Matthew Barnard, Safeguard's General Counsel. Please go ahead.

G. Matthew Barnard -- General Counsel And Secretary

Good morning, and thank you for joining us for this update on Safeguard Scientifics' third quarter 2020 financial results. Joining me on today's call and webcast are Robert Rosenthal, Safeguard's Executive Chairman of the Board; Eric Salzman, Safeguard's Chief Restructuring Officer; and Mark Herndon, Safeguard's Chief Financial Officer. During today's call, Bob and Eric will provide some corporate and strategic updates, and Mark will discuss our results. Afterwards, we will open up the call to your questions. Today's presentation includes forward-looking statements, and those statements are subject to risks and uncertainties.

The risks and uncertainties that could cause actual results to differ materially include, among others, our ability to make good decisions about the monetization of our ownership interest for maximum value or at all and the return of value for our shareholders; the ongoing support of our existing ownership interest; the fact that our ownership interest may vary from period to period, challenges to achieving liquidity from our ownership interest, our ability to avoid registration under the Investment Company Act, 1940; and that we have a limited history of operating. During today's call words such as expect, anticipate, and believe and intend will be used in our discussion of goals or events in the future. Management cannot provide any assurance that future results will be as described in our forward-looking statements.

With that, here's Bob.

Robert J. Rosenthal -- Executive Chairman

Thanks, Matt. Good morning, and thank you for joining us. I know many of you are eager to discuss our current events and the progress we've made since last quarter. So I will keep my comments very brief. Overall, I am encouraged by the direction and activities of our ownership interest, and I believe we are continuing to move closer toward valuable exit transactions. Eric and Mark will now review our recent activities and this quarter's results.

Eric C. Salzman -- Chief Restructuring Officer

Thanks, Bob. And thank you for joining us this morning. On today's call, we'd like to share the progress we've achieved against the five key areas we identified last quarter and provide greater color on some of our more significant companies. Reiterating my comments from my first earnings call back in April, we're very excited by Safeguard's prospects and the upside in the portfolio. While we continue to navigate volatile macro conditions, which have created both headwinds and tailwinds, we believe the portfolio is well positioned to perform and create value as we enter 2021. We measure our progress by both our efforts to execute on our strategy, as well as, of course, the results of those efforts. As I've said in the past, there is no silver bullet to magically unlock the substantial embedded value in our companies and return that value to our shareholders. There are, however, lots of things we do every day with a portfolio. And these efforts, combined with an improving M&A and capital raising environment, have begun to bear fruit in our results as evidenced in Q3.

Let me take a second and reiterate a few of our achievements this quarter and year-to-date. We've sold Sonobi. We limited our follow-on investments in the portfolio from our earlier expectations. We reduced our operating costs. The portfolio of companies are positioned well exiting 2020. We have no debt, and we have sufficient cash to execute on our strategy. Lastly, we've reduced the minimum cash liquidity threshold, above which we plan on returning cash to shareholders from $25 million to $20 million. With that, I'd like to map our quarterly highlights against the five key focus areas that we identified last quarter. One, exits; two, liquidity situation of our companies; three, performance of our companies; four, reducing Safeguard's operating cost; and five, engaging with our shareholders. Let me start with exits. So as I mentioned, we generated $6.6 million in cash from the Sonobi sale. That was a good outcome for Safeguard and Sonobi. The buyer is a newly established private equity firm that can help the company build on its progress and navigate the complexities of the ad tech market. We wish the company best of luck.

As you may recall, Sonobi spun out a company called BritePool in Q1 2019 to its shareholders and Safeguard retains its 13% stake in BritePool posts the Sonobi sale. BritePool has developed the cutting edge replacement technology for third-party cookies and they are making progress in a dynamic and potentially very valuable market. Our ownership interest is not big enough to disclose on a stand-alone basis, but we're bullish on the market that the company is competing in. To connect the dots from last quarter's call, Sonobi was the unnamed company we mentioned that was under LOI with a private equity buyer. The other unnamed company that we mentioned on our last call that had launched a process continues to move forward, and we are cautiously optimistic of a successful outcome. We will not provide any further details on this situation as the company is in a competitive process with multiple interested parties. Of course, there could be no assurance that a transaction is consummated, and we'll update you as is prudent going forward.

We're also actively looking for exits for several of our smaller positions, both through company sales as well as through secondary transactions. We view these efforts as business as usual, and we'll report on each of these in due course. The second topic is the liquidity at our companies. Liquidity continues to be managed well. This is best evidenced by the narrowing of Safeguard's range of follow-on deployments, which Mark will speak to. This is a particularly positive result given where we were back in April. To call out one recent follow-on round, Aktana closed a $30 million financing led by a new investor, and we invested our pro rata of $2.5 million. We believe this round of financing, which was led by a leading VC firm with healthcare expertise is great confirmation of the uniqueness of Aktana's business model and the opportunity that the company has. Aktana was one of the companies we referred to on a no names basis on last quarter's earnings call that was in term sheet discussions for potential financing.

Of the other two companies we mentioned that were discussed in term sheets, one deal was put on hold, pending developments at the company, and is now back on track and moving forward. And the other company decided to retain a banker to run a competitive process on a financing and is in the market currently with that financing. Safeguard does not intend to participate in either of those financing. Keep in mind that since our companies are growth-oriented, capital raise opportunities are always topics of discussion at the Board level in order to accelerate growth, pursue M&A or explore other value-creating opportunities. The third topic is the performance of our companies. We measure performance at the portfolio level based on revenue growth and achieving strategic initiatives. The total portfolio revenue growth with one quarter lag was a positive 12% year-on-year.

Our healthcare companies posted revenue growth of 107% year-on-year with a one quarter lag. It's an amazingly robust achievement. Note that six of our eight healthcare companies are growing revenues above 50%, and the other two are growing around 30%. Again, this is trailing 12 months with one quarter lag. One company Prognos crossed over from the $10 million to $15 million revenue bucket to the greater than $20 million revenue bucket. For our non-healthcare companies, revenue growth was down 10% year-on-year with a one quarter lag. And as we've mentioned, some of our digital media companies were and are impacted by hospitality in the travel segments, but not all are experiencing the same headwinds. You heard from Flashtalking in our recent investor fireside chat, they're experiencing very strong growth through the pandemic. All companies are taking actions to address the cost structures, their business models and their balance sheets. I would point out that at a high level, macro factors are no longer the primary driver for company performance. And the portfolio management environment has returned by and large to company by company specific issues.

There's always the risk of another COVID-19 driven shutdown of the economy. But if that were to happen, we expect it would be less severe given how different industries have adapted to operating in a work-from-home environment and how business models, supply chains and service delivery mechanisms have adapted. While we have a long way to go to return to pre-pandemic economic levels, the resiliency of the private sector, supported by fiscal and monetary measures, have made a real difference. And the fourth area is reducing Safeguard's costs. We continue to evaluate all aspects of our spending. For example, we've not renewed our office lease and will be downsizing our space needs, saving significant amount of capital or expenses. Work-from-home is proving effective, and like our portfolio of companies, we've become more efficient in how we operate. We'll also be paying a large portion of employee bonuses in stock to both address cash costs and, more importantly, to better align the team with stock performance. We're not done with our cost reduction efforts, and we'll continue to focus on all items in our control.

The last item I'd like to touch on is engagement with our shareholders and transparency into the portfolio. We've done two fireside chat events, which have been well received, and the next one is Aktana on November 10 at 10:00 a.m., and we hope you can join. We continue to welcome discussions and feedback with our investors. Next, I'd like to continue what we introduced last quarter and provide detail on the other five companies that comprise our top 10 positions in terms of exit values. Last quarter, we discussed meQuilibrium, Prognos, Zipnosis, Clutch and Flashtalking. Today, we'd like to highlight Aktana, MediaMath, InfoBionic, Syapse and Moxe. We'll start with Aktana. Aktana offers AI-enabled decision support software that helps pharma sales reps and marketing teams optimize their go-to-market strategies. Basically, their product empowers pharma reps with tools to help them target their customers better and sell more effectively. The company's revenues are in the $20 million to $50 million revenue bucket, and the company has been one of our fastest growers in terms of revenue.

As we mentioned, it recently closed a $30 million round led by a third-party VC, and we invested $2.5 million in that round. Our total deployments in the company are $14.2 million, inclusive of the last round, and our primary ownership is 15%. We like the company because it operates in a large and growing market that is primed for adoption of digital and AI solutions. Success will be a function of continued top line growth and increased efficiency in delivering its solutions. COVID-19 has had a mixed impact on the business, as it has disrupted traditional workflows of pharma sales teams, which rely on in-person selling. But on the flipside, it has accelerated demand from multichannel selling capabilities, which Aktana supports. You'll hear more about Aktana from its CEO, David Ehrlich and Safeguard's Gary Kurtzman during our fireside chat interview on November 10. The next company we'd like to highlight is MediaMath. Mediamath is our largest company by revenue and falls in the $50 million plus revenue bucket. We've deployed $16 million in the company and own 13% on a primary basis.

The last financing that MediaMath closed was in July of 2018. MediaMath is the leading independent advertising platform that delivers enterprise-grade technology and services to global brands and services. They offer their service on a managed service basis and a software as a service platform, self-service model. MediaMath is serving a huge addressable market, dominated by walled garden solutions, and it is the number two DSP after publicly traded The Trade Desk. It operates in a competitive environment and faces, along with the other ad tech value chain companies, a number of regulatory and technology challenges as well as some very strong secular tailwinds. From a COVID-19 perspective, the company experienced a drop in ad spend in the March-April time period, which has recovered and now is running ahead of prior year. It's seeing particular strength in certain geographies, especially EMEA, it has also benefited from a cost alignment that was instituted at the start of the pandemic. The company is currently taking steps to ensure that its balance sheet is properly positioned to take advantage of their recovery and ad spend going into 2021.

The next company that I'll highlight is InfoBionic. The company offers a cloud-based remote cardiac arrhythmia detection and monitoring system for patients using a SaaS model. Safeguard has deployed $22 million in InfoBionic and owns 22% of the company. The last financing round was done in July of 2018. From a revenue standpoint, the company sits in the $10 million to $15 million revenue bucket. What we like about the company that it is one of the few players to provide on-demand streaming telemetry and has been adopted by the Mayo Clinic after an exhaustive RFP process. We are particularly pleased to see an organization like Mayo validate InfoBionic's product offering. From a macro standpoint, the pandemic has accelerated telehealth and is now a key focus as hospitals are shifting to remote and virtual care, which is a positive tailwind for InfoBionic. There's also a shift away from fee-for-service to value-added healthcare, which plays well for InfoBionic's ability to treat higher comorbidity patients outside of the hospital. The next company is Syapse. Syapse is in the $20 million plus revenue bucket.

The company provides a business information platform for oncology, where it takes clinical data from providers or healthcare systems, analyzes this data to offer insights for payers and pharma companies. These insights and actions can include anonymized clinical and real-world evidence that can improve treatments and inform drug development processes. That serves a huge addressable market in oncology drug development and commercialization. Key to success is the continued scaling of its offerings to pharma and biotech. COVID-19 has delayed some customer sales cycles, but otherwise has not affected the value proposition of its offerings. Like other tech-enabled healthcare names, Syapse has experienced robust revenue growth. Safeguard has deployed $25 million in the company and has a 20% ownership stake. The last financing for the company was in May of 2020. The final company we'd like to highlight is Moxe. Moxe offers a data clearing house that enables the exchange of clinical and administrative data between health systems and payers.

Moxe falls in the $1 million to $5 million revenue bucket, which makes it the smallest among the top 10 companies we're profiling, but it is growing extremely rapidly and has a disruptive market opportunity. What we like about the company is they're serving a large unmet need that can benefit from technology adoption and scale. Key drivers to growth will be more payers and providers on their network. COVID-19 has made engaging with new providers a bit more challenging, but has also driven interest in technology solutions for a market that's dominated by manual processes. The company has the ability to rapidly achieve scale through a network effect among health systems and payers. We deployed $7.5 million into the company and own 30% on a primary basis. The last round of financing was in October of 2019. So between the last earnings call and this one, we've covered top 10 companies in Safeguard's portfolio in terms of expected exit values. We hope this is helpful, and combined with the fireside chats, provide you with greater insight into our companies.

With that, let me now hand it over to Mark.

Mark A. Herndon -- Senior Vice President And Chief Financial Officer

Thanks, Eric. For the quarter ended September 30, 2020, Safeguard's net loss of $4.3 million or $0.21 per share compared with a net loss of $2.5 million or $0.12 per share, the same period of 2019. Safeguard's net loss for the nine months ended September 30 was $30.3 million or $1.46 per share, as compared with net income of $55.3 million, or $2.68 per share for the comparable nine-month period of 2019. As you may recall, 2019 year-to-date income was the result of the successful exits of Propeller and Transactis. And our 2020 year-to-date results included a variety of impairments totaling $17.3 million. Our conversation today will be focused on the third quarter's results. Safeguard's cash, cash equivalents and restricted cash at September 30, 2020, totaled $16.4 million, and we have no debt obligations. Our funding to existing ownership interest continued this quarter, including $2.5 million to Aktana, which resulted in $9.1 million across the portfolio for the year-to-date period. We expect that deployments for the remainder of the year will be minimal, if any.

Also, we expect to continue -- we continue to expect -- excuse me, our level of deployments to decline as the portfolio matures and we achieve exits. Our general and administrative expenses were $2.3 million for the three months ended September 30, 2020, which was slightly lower than the $2.3 million reported in the third quarter of 2019. Our G&A expenses benefited from lower employee compensation, lower professional fees and lower other costs, which were offset by higher stock-based compensation and insurance costs. Corporate expenses for the quarter, which represent general and administrative expenses, excluding depreciation, stock-based compensation, severance and retirement costs and other nonrecurring and other items, were $1.3 million as compared with $1.7 million in 2019, a 22% decline. Further, our year-to-date corporate expenses were $4 million as compared to $5.7 million for the comparable period in 2019, a 30% decline. In addition to the G&A reductions mentioned, our quarterly corporate expenses benefited from the reflection of director fees as a stock-based compensation item as well as a change announced in the second quarter that will result in a portion of management's estimated incentive bonus compensation to also be paid invested equity instead of cash.

As we have mentioned before, we continue to look for cost reduction opportunities. Some of the steps we are taking or planning to take are relatively small, but every step counts. So, as an example, we expect to further reduce our office related costs in 2021 as we've been able to effectively work remotely over the last few months. We -- as we look out for the full year expectation of our corporate expenses, we expect that they will be below our previously disclosed range of $5.6 to $6.9 million as compared to $7.1 million reported for the full year of 2019 from the continuation of our current run rate. We have not yet announced a range for 2021, but in general, we will expect to continue focusing on lowering the annual corporate expenses. With respect to our ownership interest at September 30, 2020, we have an aggregate carrying value of $55.8 million. As we've discussed before, carrying value is a GAAP term that results in the application of the equity method of accounting. It typically reduces the carrying value of our share -- for our share of the losses of the underlying companies and generally does not represent the fair value or an expected exit value of those same ownership interests. If the fair value of any of our ownership interest declines below our carrying value, we consider making a downward adjustment to the carrying value by recording an impairment.

We also have a few ownership interests that are accounted for under the other method, which can have an upward or downward adjustment resulting from observable price changes if there are transactions in their securities. The third quarter, included an incidence of a downward adjustment of $0.5 million resulting from an observable price change as well as an impairment of $0.4 million for two of our other ownership interests, which were included in other income or loss. Our share of the losses of our equity method ownership interest for the three months ended September 30, 2020, was $3.8 million as compared to $6.3 million for the comparable period in 2019. This decrease in the result of losses net from our equity method ownership interest -- excuse me, included a $2.5 million dilution gain related to our participation in Aktana's recent round. Also, as noted in our release, during the third quarter, we exited Sonobi for proceeds of $6.6 million. This was, obviously, a positive impact to our cash position, but it did not generate a significant gain on sale. Also, we did have the positive impact of the seasonally strong income from Sonobi through their acquisition date, which is included in our share of the equity method losses net discussed above.

I would also like to remind everyone that we report our share of the losses from the equity method companies on a one quarter lag. So this quarter's share of the losses generally reflect the calendar second quarter. Many of our companies saw the initial impact from COVID-19 during the later stages of the first quarter. Their results in the second quarter reflected the full quarter of operating in this environment. Some companies have included in their results, the benefit from the PPP loan programs in this quarter's results, and we expect to continue to see some of this impact in their third quarter results when we receive them, which will be reflected in our fourth quarter reporting cycle.

Now it's time for us to turn to the Q&A segment of the call. So operator, I'd ask you to open up the phone lines for a few questions.

Questions and Answers:

Operator

[Operator Instructions] And we do have a question from a line of Lee Albert.

Lee Albert -- [Phonetic] -- Analyst

Good morning. Can you share the value of what Aktana was valued at on your last financing? And I have a follow-up.

Robert J. Rosenthal -- Executive Chairman

The valuation of Aktana for the purposes of the $30 million round was not made public. Obviously, that's not something that we could share publicly unless the company had shared it as part of their either Form D filing. So we're not in a position to do that.

Lee Albert -- [Phonetic] -- Analyst

All right. On the revised compensation agreements that you signed. You've set performance bonuses up. Can you share the metrics on what kind of value that you're -- will happen for them to get their bonuses?

Eric C. Salzman -- Chief Restructuring Officer

For which individual?

Lee Albert -- [Phonetic] -- Analyst

Chief, the one you just resigned -- the chief --

Eric C. Salzman -- Chief Restructuring Officer

Okay. About -- you're talking about my deal. This is Eric.

Lee Albert -- [Phonetic] -- Analyst

Yes.

Eric C. Salzman -- Chief Restructuring Officer

Yes. Sure. So as you may have seen, so the Board and I extended or resigned my involvement or my agreement through the end of next year. All those components are publicly filed, so you could see that. I'm taking a significant -- vast majority of -- the majority of my comp in stock. The stock component that is performance-based is driven by three milestones. One is asset sales. Two is a reduction in Safeguard's operating costs; and then third is a discretionary component that the Board -- that the comp committee of the Board will be determining.

Lee Albert -- [Phonetic] -- Analyst

Can you give us an idea of what the -- on the asset sales, were that structured in at?

Eric C. Salzman -- Chief Restructuring Officer

I don't believe that's going to be publicly shared, but I think the main idea to -- well, the main concept is that I'm aligned personally with monetizing assets. Those assets also have a valuation component to them. So it's not -- they have to be sold within a certain sort of valuation band. And as I think you've seen that I'm extremely bullish on the opportunity that we have to monetize this portfolio or return value to shareholders, and that's basically how I'm going to be compensated, and that is the reason why it took this opportunity. And I'm super excited, particularly on how we've positioned the portfolio in Q3 and moving forward, so.

Lee Albert -- [Phonetic] -- Analyst

Okay. Thank you.

Operator

And our next question comes from the line of Andrew Gordon.

Andrew Gordon -- TSB Bank -- Analyst

Hey. Good morning guys and thanks for taking the question.

Eric C. Salzman -- Chief Restructuring Officer

Good morning.

Andrew Gordon -- TSB Bank -- Analyst

Hey. I just had a quick question to MediaMath. I was certainly encouraged to hear that it sounds like you're -- the company is seeing year-over-year gains after recovering from some of the headwinds really to COVID. Has the company given you much visibility into their forward expectations for 2021? Or sequentially, how they're looking in the fourth quarter? Do you expect continued tailwinds? I know at one point you mentioned that you see longer-term tailwinds. But I guess that's -- specifically in the next 12 months, how are you seeing a resumption of the participation in those longer-term tailwinds?

Eric C. Salzman -- Chief Restructuring Officer

Sure. Yes, I'll try to provide some color on that. And there really is a number of factors going in -- going involved. So there are clearly secular tailwinds with the adoption of kind of programmatic, digital, ad spend, linear TV, et cetera. So the space itself is experiencing secular growth and MediaMath being the #2 independent DSP is a beneficiary of that secular tailwind. There are cyclical headwinds that the company has experienced in certain of its customer segments, hospitality, travel, et cetera. And if you look -- and I think I mentioned this on the last earnings call, overall, sort of ad spend was down roughly 25% in around Q2-ish timeframe and MediaMath is not immune to that and experienced a similar headwind, if you will, or pullback in spending by its customers. We were super excited to see kind of a resurgence of -- certain customers are spending more in certain segments. And in those segments, which have been hurt, hospitality, travel, et cetera, haven't yet come back. But the company is seeing, as I mentioned, year-on-year ad spend growth from where we were back in kind of the March, April, may timeframe.

The other thing a company had done is there's a pretty aggressive cost-cutting measures to align its cost structure, both kind of fixed cost and some of the variable costs that they can manage to be in a position to achieve better operating leverage and a lower breakeven point on a daily ad spend basis. So the combination of those sectors which are spending and they're picking up market share in those sectors, plus a better sort of operating margin structure in their income statement and an expectation that some of those sectors, which are not spending, will start to spend at some point next year, we don't know exactly when, sets the company up for a positive 2021 performance. But it is a large company and a lot of things, obviously, still need to work in its favor. But we're very encouraged by the steps the company has taken themselves as well as what we're seeing in the macro environment, particularly, as you said certain geographies where they're experiencing double digit revenue growth. So I hope that kind of clarifies there, as I said, a number of interrelated developments going on at the company.

Andrew Gordon -- TSB Bank -- Analyst

Very helpful. Yes. And just one more question. I just can't help but focus on the fact that MediaMath carried such a substantial valuation in their last financing round, which I think that was July of '18. And it seems to -- your stake today at that same valuation would be worth more than all of Safeguard's current EV, I believe -- enterprise value. And I was also encouraged to hear that [Sanovi] or Sonobi, I don't know how you pronounce it, but have they -- are you able to complete a sale their interest in the ad tech space. So the question is, are you seeing a resurgence of this on a broader interest? Or how would you characterize the broader interest in the private market space for ad tech for transactions.

Eric C. Salzman -- Chief Restructuring Officer

Yes. So thanks for that. Yes. No, we were excited with the Sonobi transaction, tough which we mentioned. It was a tough M&A environment. It's not a very large company. It's an exciting company that has some great products and great customer logos. So getting that deal done was encouraging for us. I mean, ad tech is -- I don't want to say a tale of two cities, but it's a tale of many cities. There are certain companies that are doing better than others. If you look historically, ad tech has been an industry where the haves and the have-nots, right? It would be too simplistic for us to point to The Trade Desk and say, "Gee, go look at that multiple and why can't MediaMath or shouldn't MediaMath be worth that?" That would be too simplistic a way to think about it. So we're encouraged by the progress at a company-by-company level. We're super focused on helping at a micro level, each of the companies sort of overcome whatever challenges they have and execute on the opportunities. But if you look at public trading multiples in ad tech, there -- just to put it in perspective, they've been pretty stable Q2 to Q3 in terms of kind of what we look at our public peers.

They trade at roughly 2.5 times forward revenues. And the public peers that we look at in ad tech are sort of growing around mid to high single-digit revenue growers. So I think the industry is not immune from kind of overall macro spending pullback by CPG or other companies, and it really is a company-by-company -- answered your question. Because if you listen to the Flashtalking fireside that we -- that I alluded to, companies, they're picking up market share, and they're growing in certain ways. That's not experienced by every company in the ad space, whether ours or anyone else out there. So really it's a name by name situation. I will say, on the M&A front, there's definitely increased activity both by strategic and private equity sponsors in the space as evidenced by the Sonobi deal.

Andrew Gordon -- TSB Bank -- Analyst

Yep. Fantastic. We appreciate all the efforts. Thank you.

Operator

Okay. And our next question comes from the line of Bruce Count your line is open.

Bruce Count -- [Phonetic] -- Analyst

Hi, guys. I was wondering if you could give any more guidance on the amount of follow-ons that might be needed next year?

Mark A. Herndon -- Senior Vice President And Chief Financial Officer

Sure, I can take that, Bruce. Yes, and I recognize we took a -- I guess, a broad statement in the opening remarks, and I'm just going to keep it there, which is we expect them to come down substantially. As we have seen in the -- this year, 2020, they've come down substantially from into 2019, and we expect that trend to continue, right? I mean, it's -- as we've talked about their -- when you look at the individual circumstances of all of the companies, a lot of them are in late stages of -- and are trending toward circumstances where they're either -- we would have an expectation of an exit transaction or we'd have -- or an expectation that they would get toward a self-sustaining cash flow position, right? So we're not necessarily looking for a lot of big ground from multiple entities within the companies. Or we have other circumstances where the company is already there or we've made a decision where we're not -- and we don't intend or don't need to make any further investments in those companies. So while we haven't put an exact number out there, we're going to continue to take meaningful steps downward with respect to deployments in 2021.

Eric C. Salzman -- Chief Restructuring Officer

Okay. And if I -- Bruce, if I just want to add one thing to that. Thanks, Mark. And maybe this goes without saying, so I'll say it anyways. We're not in the venture capital investing business. I mean, Safeguard has a storied history being in the venture capital investment business. We are not in the venture capital investing business at this time. We're in the venture capital harvesting business. And we're super excited about the harvesting opportunities. But that then informs how we think about our follow-on investments. And as Mark said, we put 17 into the portfolio -- $17 million into the portfolio in '19 -- 2019. Guidance for this year is $9 million to $10 million, and we'd be disappointed if next year we couldn't -- we didn't continue in a similar decline curve, as Mark indicated.

Bruce Count -- [Phonetic] -- Analyst

Okay. Thanks.

Operator

[Operator Instructions] And again, if you would like to ask a question, simply press star then number one on your telephone keypad. Again, that was star then the number one

Robert J. Rosenthal -- Executive Chairman

Are there any other questions?

Operator

And we have no questions at this time.

Robert J. Rosenthal -- Executive Chairman

Okay. Thank you. And thanks to everybody for joining us on the call today. We do appreciate your continued interest, confidence and support, and look forward to updating you again next quarter. Thanks so much.

Operator

[Operator Closing Remarks]

Duration: 41 minutes

Call participants:

G. Matthew Barnard -- General Counsel And Secretary

Robert J. Rosenthal -- Executive Chairman

Eric C. Salzman -- Chief Restructuring Officer

Mark A. Herndon -- Senior Vice President And Chief Financial Officer

Lee Albert -- [Phonetic] -- Analyst

Andrew Gordon -- TSB Bank -- Analyst

Bruce Count -- [Phonetic] -- Analyst

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