SURO CAPITAL CORP. - Quarter Report: 2012 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED June 30, 2012

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

COMMISSION FILE NUMBER: 814-00852

GSV Capital Corp.
(Exact name of registrant as specified in its charter)

Maryland	27-4443543
(State of incorporation)	(I.R.S. Employer Identification No.)

2965 Woodside Road
Woodside, CA	94062
(Address of principal executive offices)	(Zip Code)

(650) 206-2965
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has 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 definitions 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 (do not check if a smaller reporting company)	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

The number of shares of the issuer’s Common Stock, $0.01 par value, outstanding as of August 8, 2012 was 19,320,100.

GSV CAPITAL CORP. AND SUBSIDIARY

TABLE OF CONTENTS

		PAGE

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Statements of Assets and Liabilities as of June 30, 2012 (unaudited) and December 31, 2011	3
	Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2012, for the three months ended June 30, 2011 and for the period from January 6, 2011 (date of inception) to June 30, 2011	4
	Consolidated Statements of Changes in Net Assets (unaudited) for the six months ended June 30, 2012 and for the period from January 6, 2011 (date of inception) to June 30, 2011	5
	Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2012 and for the period from January 6, 2011 (date of inception) to June 30, 2011	6
	Consolidated Schedule of Investments as of June 30, 2012 (unaudited)	7
	Schedule of Investments as of December 31, 2011	11
	Notes to the Consolidated Financial Statements as of June 30, 2012 (unaudited)	14
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosure	38
Item 5.	Other Information	38
Item 6.	Exhibits	38
	Signatures	39

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

GSV CAPITAL CORP. AND SUBSIDIARY

(formerly NeXt Innovation Corp.)

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

	June 30, 2012			December 31, 2011
ASSETS	(Unaudited)
Investments at fair value:
Investments in affiliated securities (cost of $19,828,912 and $0, respectively)	$	19,962,743		$	-
Investments in non-control/non-affiliated securities (cost of $154,352,615 and $65,658,866, respectively)		151,635,667			64,078,150
Investment in United States treasury bill (cost of $0 and $19,999,128, respectively)		-			20,000,044
Investments in money market funds (cost of $16,000,000 and $7,000,000, respectively)		16,000,000			7,000,000
Total Investments (cost of $190,181,527 and $92,657,994, respectively)		187,598,410			91,078,194

Cash		79,617,068			385,995
Due from:
GSV Asset Management		5,901			13,470
Portfolio company		246,065			9,249
Accrued interest		9,399			158,389
Prepaid expenses		191,639			92,750
Deferred offering costs		-			56,436
Dividend receivable		2,314			1,063
Other assets		83,606			2,696
Total Assets		267,754,402			91,798,242

LIABILITIES
Due to:
GSV Asset Management		17,159			78,427
Other affiliates		12,717			10,782
Payable for unsettled securities transaction		-			19,999,128
Accounts payable		705,028			206,357
Accrued expenses		159,444			300
Total Liabilities		894,348			20,294,994
Commitments and contingencies (Note 6)
Net Assets	$	266,860,054		$	71,503,248

NET ASSETS
Common stock, par value $0.01 per share
(100,000,000 authorized; 19,320,100 and 5,520,100 issued and outstanding, respectively)	$	193,201		$	55,201
Paid-in capital in excess of par		273,804,610			73,027,847
Accumulated net investment loss		(3,174,121	)		-
Accumulated net realized loss on investments		(1,380,519	)		-
Accumulated net unrealized depreciation on investments		(2,583,117	)		(1,579,800	)
Net Assets	$	266,860,054		$	71,503,248

Net Asset Value Per Share	$	13.81		$	12.95

See Notes to the Consolidated Financial Statements.

GSV CAPITAL CORP. AND SUBSIDIARY

(formerly NeXt Innovation Corp.)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011⁽¹⁾
INVESTMENT INCOME
Interest income from affiliated securities	$	7,808		$	-		$	7,808		$	-
Interest income		95,075			-			207,176			-
Dividend income		7,471			-			13,175			-
Total Investment Income		110,354			-			228,159			-

OPERATING EXPENSES
Investment management fees		1,126,091			150,943			1,748,017			150,943
Costs incurred under administration agreement		602,201			113,035			947,795			113,035
Directors’ fees		65,000			42,500			107,500			42,500
Professional fees		222,561			102,582			354,406			118,632
Insurance expense		55,485			48,109			102,154			48,109
Investor relations expense		95,038			750			109,288			750
Organization expenses		-			97,855			-			192,495
Other expenses		24,097			9,531			33,120			9,649
Total Operating Expenses		2,190,473			565,305			3,402,280			676,113

Net Investment Loss		(2,080,119	)		(565,305	)		(3,174,121	)		(676,113	)

Net Realized Loss on Investments		(1,380,263	)		-			(1,380,519	)		-

Net Change in Unrealized Depreciation on Investments		(2,014,512	)		(59,634	)		(1,003,317	)		(59,634	)

Net Decrease in Net Assets Resulting from Operations	$	(5,474,894	)	$	(624,939	)	$	(5,557,957	)	$	(735,747	)

Net Decrease in Net Assets Resulting from Operations per Common Share	$	(0.34	)	$	(0.27	)	$	(0.43	)	$	(0.42	)

Weighted Average Common Shares Outstanding		16,287,133			2,345,595			12,837,133			1,735,385	⁽²⁾

⁽¹⁾For the period from January 6, 2011 (date of inception) to June 30, 2011.

⁽²⁾Weighted average common shares for the period from January 6, 2011 (date of inception) to June 30, 2011 was calculated from the issuance of 100 shares on February 28, 2011.

See Notes to the Consolidated Financial Statements.

GSV CAPITAL CORP. AND SUBSIDIARY

(formerly NeXt Innovation Corp.)

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(Unaudited)

	Six months ended June 30, 2012			For the period from January 6, 2011 (date of inception) to June 30, 2011
Decrease in Net Assets Resulting From Operations
Net Investment Loss	$	(3,174,121	)	$	(676,113	)
Net Realized Loss on Investments		(1,380,519	)		-
Net Change in Unrealized Depreciation on Investments		(1,003,317	)		(59,634	)
Net Decrease in Net Assets Resulting From Operations		(5,557,957	)		(735,747	)

Capital Share Transactions
Net Proceeds from Common Shares Issued		201,652,500			46,524,750
Offering Costs		(737,737	)		(523,581	)
Net Capital Share Transactions		200,914,763			46,001,169

Total Increase in Net Assets		195,356,806			45,265,422
Net Assets at Beginning of Period		71,503,248			-
Net Assets at End of Period	$	266,860,054		$	45,265,422

Capital Share Activity
Shares Issued		13,800,000			3,335,100
Shares Outstanding at Beginning of Period		5,520,100			-
Shares Outstanding at End of Period		19,320,100			3,335,100

See Notes to the Consolidated Financial Statements.

GSV CAPITAL CORP. AND SUBSIDIARY

(formerly NeXt Innovation Corp.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six months ended June 30, 2012			For the period from January 6, 2011 (date of inception) to June 30, 2011
Cash Flows from Operating Activities
Net decrease in net assets resulting from operations	$	(5,557,957	)	$	(735,747	)
Adjustments to reconcile net decrease in net assets resulting from
operations to net cash used in operating activities:
Net realized loss on investments		1,380,519			-
Net change in unrealized depreciation on investments		1,003,317			59,634
Purchases of investments in:
Portfolio investments		(109,902,924	)		(16,304,337	)
United States treasury bill		(19,999,128	)		-
Money market funds		(10,000,000	)		(4,500,000	)
Proceeds from sales of investments in:
United States treasury bill		19,998,872			-
Money market funds		1,000,000			-
Change in operating assets and liabilities:
Due from GSV Asset Management		7,569			(46,236	)
Due from portfolio company		(236,816	)		(26,217	)
Escrow deposits		-			(172,995	)
Accrued interest		148,990			-
Prepaid expenses		(98,889	)		(228,384	)
Dividend receivable		(1,251	)		-
Other assets		(80,910	)		(26,148	)
Due to GSV Asset Management		(61,268	)		78,461
Due to other affiliates		1,935			(17,988	)
Accounts payable		555,107			(25,121	)
Accrued expenses		159,144			101,510
Net Cash Used in Operating Activities		(121,683,690	)		(21,843,568	)

Cash Flows from Financing Activities
Net proceeds from common shares issued		201,652,500			46,524,750
Offering costs		(737,737	)		(466,405	)
Net Cash Provided by Financing Activities		200,914,763			46,058,345

Total Increase in Cash Balance		79,231,073			24,214,777
Cash Balance at Beginning of Period		385,995			-
Cash Balance at End of Period	$	79,617,068		$	24,214,777

Non-Cash Items
Decrease in deferred offering costs	$	-		$	57,176
Increase in offering costs	$	-		$	(57,176	)
Structured note exchanged for common shares	$	3,002,665		$	-
Structured notes converted to preferred shares	$	674,651		$	-
Warrants exercised for preferred shares	$	53,665		$	-

See Notes to the Consolidated Financial Statements.

GSV CAPITAL CORP. AND SUBSIDIARY

(formerly NeXt Innovation Corp.) CONSOLIDATED SCHEDULE OF INVESTMENTS

June 30, 2012

(Unaudited)

Portfolio Investments*	Headquarters / Industry		Shares / Par Amount		Cost		Fair Value		% of Net Assets
AltEgo, LLC		Santa Monica, CA
Preferred shares, Series B-2		Social Media Online Gaming		1,000,000	$	1,017,540	$	1,000,000		0.37	%

AlwaysOn, LLC ⁽¹⁾		Woodside, CA
Structured note, 10%, due 1/9/2013 and warrant		Social Media	$	250,000		250,000		250,000		0.09	%

Avenues World Holdings LLC		New York, NY
Preferred shares, Class A-1		Globally-focused Private School		5,000,000		10,026,573		10,000,000		3.75	%

Bloom Energy Corporation		Sunnyvale, CA
Common shares		Fuel Cell Energy		201,589		3,854,817		3,770,135		1.41	%

Chegg, Inc.		Santa Clara, CA
Common shares		Textbook Rental		1,274,193		10,012,543		9,999,996		3.75	%
Preferred shares, Series F				500,000		4,008,654		4,000,000		1.50	%
Total						14,021,197		13,999,996		5.25	%

Control4 Corporation		Salt Lake City, UT
Common shares		Home Automation		2,950,667		5,046,583		4,997,000		1.87	%

CUX, Inc. ⁽²⁾		Mechanicsburg, PA
Preferred shares, Series C		Corporate Education		246,305		2,005,942		2,000,000		0.75	%

Dailybreak, Inc. ⁽²⁾		Boston, MA
Preferred shares, Series A-1		Social Advertising		1,545,181		2,000,000		2,000,000		0.75	%

DreamBox Learning, Inc.		Bellevue, WA
Preferred shares, Series A		Education Technology		3,579,610		758,017		750,000		0.28	%

Dropbox, Inc.		San Francisco, CA
Common share		Online		600,000		6,868,679		6,858,500		2.57	%
Preferred shares, Series A-1		Storage		552,486		5,015,333		6,314,915		2.37	%
Total						11,884,012		13,173,415		4.94	%

Facebook, Inc.⁽³⁾		Palo Alto, CA
Common shares, Class B		Social Networking		350,000		10,472,294		9,361,100		3.51	%

Fullbridge, Inc. ⁽²⁾		Cambridge, MA
Preferred shares, Series C		Business Education		1,196,809		2,250,001		2,250,000		0.84	%

See Notes to the Consolidated Financial Statements.

GSV CAPITAL CORP. AND SUBSIDIARY

(formerly NeXt Innovation Corp.)

CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)

June 30, 2012

(Unaudited)

Portfolio Investments*	Headquarters / Industry		Shares / Par Amount		Cost		Fair Value		% of Net Assets
Gilt Groupe, Inc.		New York, NY
Common shares		e-Commerce Flash Sales		203,100	$	5,589,279	$	5,499,250		2.06	%

Global Education Learning (Holdings) Ltd. ⁽²⁾		San Bruno, CA
Preferred shares, Series A		Education Technology		1,472,175		2,999,998		2,999,998		1.12	%

Grockit, Inc. ⁽²⁾		San Francisco, CA
Preferred shares, Series D		Online Test Preparation		2,728,252		2,005,945		2,000,000		0.75	%

Groupon, Inc. ⁽⁴⁾		Chicago, IL
Common shares		Online Deals		80,000		2,128,774		850,400		0.32	%

Kno, Inc.		Santa Clara, CA
Preferred shares, Series C		Digital		440,313		2,262,006		2,250,000		0.84	%
Preferred shares, Series C-1		Textbooks		1		7,509,663		7,500,000		2.81	%
Common shares				50,000		214,681		205,000		0.08	%
Total						9,986,350		9,955,000		3.73	%

Maven Research, Inc.		San Francisco, CA
Preferred shares, Series B		Global Knowledge Marketplace		49,505		217,206		200,000		0.07	%

NestGSV, Inc. ⁽²⁾		Redwood City, CA
Preferred shares, Series A		Entrepreneurial Education		1,000,000		1,020,145		1,000,000		0.37	%

Palantir Technologies, Inc.		Palo Alto, CA
Common shares, Class B		Data Security		1,559,419		4,239,986		4,210,431		1.58	%

Serious Energy, Inc.		Sunnyvale, CA
Common shares		Green Materials		178,095		739,130		237,460		0.09	%

SharesPost, Inc.		San Bruno, CA
Preferred shares, Series B		Online		1,771,653		2,257,984		2,256,752		0.85	%
Common warrants, $0.13 strike price, expire 6/15/2018		Marketplace (Finance)		770,934		23,128		8,480		0.00	%
Total						2,281,112		2,265,232		0.85	%

Silver Spring Networks, Inc.		Redwood City, CA
Common shares		Smart Grid		510,143		5,145,271		4,901,430		1.84	%

See Notes to the Consolidated Financial Statements.

GSV CAPITAL CORP. AND SUBSIDIARY

(formerly NeXt Innovation Corp.)

CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)

June 30, 2012

(Unaudited)

Portfolio Investments*	Headquarters / Industry		Shares / Par Amount		Cost		Fair Value		% of Net Assets
Solexel, Inc.		Milpitas, CA
Preferred shares, Series C		Solar Technology		4,576,659	$	10,016,559	$	10,000,000		3.75	%

StormWind, LLC ⁽²⁾		Scottsdale, AZ
Preferred shares, Series B		Electronic		3,279,629		2,019,687		2,000,000		0.75	%

The Echo System Corp. ⁽¹⁾ ⁽²⁾		New York, NY
Preferred shares, Series A		Social Analytics		512,365		1,436,404		1,639,568		0.61	%
Preferred warrants, $0.20 strike price, expire 11/14/2016				68,359		75,988		73,176		0.03	%
Total						1,512,392		1,712,744		0.64	%

The rSmart Group, Inc.		Scottsdale, AZ
Preferred shares, Series B		Higher Education Learning Platform		1,201,923		1,266,940		1,250,000		0.47	%

Top Hat, Inc. ⁽²⁾		Shakopee, MN
Preferred shares, Series A		Jewelry Retailing Technology		1,777,778		4,014,802		4,000,001		1.50	%

TrueCar, Inc.		Santa Monica, CA
Common shares		Online Marketplace (Cars)		377,358		2,014,863		1,999,997		0.75	%

Twitter, Inc.		San Francisco, CA
Common shares		Social Communication		1,835,600		31,751,748		31,513,493		11.81	%

Violin Memory, Inc.		Mountain View, CA
Preferred shares, Series B		Flash		800,000		4,800,000		4,800,000		1.80	%
Preferred shares, Series D		Memory		1,666,666		10,018,045		9,999,996		3.75	%
Total						14,818,045		14,799,996		5.55	%

ZocDoc Inc.		New York, NY
Preferred shares, Series A		Online Medical Scheduling		200,000		3,563,178		3,500,000		1.31	%

ZoomSystems		San Francisco, CA
Preferred shares, Series A		Smart e-tail (Retail)		1,250,000		260,476		250,000		0.09	%

Zynga, Inc.		San Francisco, CA
Common shares		Social Gaming		533,333		3,002,665		2,901,332		1.09	%

Total Portfolio Investments		`			$	174,181,527	$	171,598,410		64.30	%

See Notes to the Consolidated Financial Statements.

GSV CAPITAL CORP. AND SUBSIDIARY

(formerly NeXt Innovation Corp.)

CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)

June 30, 2012

(Unaudited)

Non-Portfolio Investments	Shares / Par Amount		Cost		Fair Value		% of Net Assets

Money Market Funds ⁽¹⁾
Fidelity Institutional Money Market Funds
Money Market Portfolio		8,000,000	$	8,000,000	$	8,000,000		3.00	%
Prime Money Market Portfolio		8,000,000		8,000,000		8,000,000		3.00	%
Total Money Market Funds				16,000,000		16,000,000		6.00	%

Total Investments			$	190,181,527	$	187,598,410		70.30	%

All portfolio investments are non-control/non-affiliated and non-income producing, unless identified. Equity investments are subject to lock-up restrictions upon their initial public offering.

⁽¹⁾

Investment is income producing.

⁽²⁾

Denotes an Affiliate Investment. “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of GSV Capital Corp., as defined in the Investment Company Act of 1940. A company is deemed to be an “Affiliate” of GSV Capital Corp. if GSV Capital Corp. owns 5% or more but less than 25% of the voting securities of such company.

⁽³⁾

On May 17, 2012, Facebook, Inc. priced its initial public offering, selling 421,233,615 shares at a price of $38.00 per share. GSV Capital Corp.’s shares in Facebook, Inc. are subject to a lock-up agreement that expires on November 14, 2012. At June 30, 2012, GSV Capital Corp. valued Facebook based on its June 29, 2012 closing price, less a discount for the lock-up restriction.

⁽⁴⁾

On November 8, 2011, Groupon, Inc. priced its initial public offering, selling 35,000,000 shares at a price of $20.00 per share. GSV Capital Corp.’s shares in Groupon, Inc. are subject to a lock-up agreement that expired on June 1, 2012. At June 30, 2012, GSV Capital Corp. valued Groupon, Inc. based on its June 29, 2012 closing price.

See Notes to the Consolidated Financial Statements.

GSV CAPITAL CORP.

(formerly NeXt Innovation Corp.)

SCHEDULE OF INVESTMENTS

December 31, 2011

Portfolio Investments*	Headquarters / Industry		Shares / Par Amount		Cost		Fair Value		% of Net Assets
Bloom Energy Corporation		Sunnyvale, CA
Common shares		Fuel Cell Energy		96,389	$	1,815,818	$	1,771,335		2.48	%

Chegg, Inc.		Santa Clara, CA
Common shares		Textbook Rental		774,193		6,003,694		5,999,996		8.39	%

Control4 Corporation		Salt Lake City, UT
Common shares		Home Automation		666,667		1,034,827		1,000,000		1.40	%

DreamBox Learning, Inc.		Bellevue, WA
Preferred shares, Series A		Education Technology		3,579,610		757,955		750,000		1.05	%

Dropbox, Inc.		San Francisco, CA
Preferred shares, Series A		Online Storage		552,486		5,015,333		4,999,998		6.99	%

Facebook, Inc.		Palo Alto, CA
Common shares, Class B		Social Networking		350,000		10,465,981		10,462,500		14.63	%

Gilt Groupe, Inc.		New York, NY
Common shares		e-Commerce Flash Sales		203,100		5,576,979		5,499,250		7.69	%

Grockit, Inc.		San Francisco, CA
Preferred shares, Series B		Online Test Preparation		2,728,252		2,005,945		2,000,000		2.80	%

Groupon, Inc. ⁽²⁾		Chicago, IL
Common shares		Online Deals		80,000		2,128,585		1,188,288		1.66	%

Kno, Inc.		Santa Clara, CA
Preferred shares, Series C		Digital		440,313		2,262,006		2,250,000		3.15	%
Common shares		Textbooks		50,000		214,303		205,000		0.29	%
Total						2,476,309		2,455,000		3.44	%

PJB Fund LLC ^{(1) (3)}		San Francisco, CA
Structured note, 10%, due 8/15/2012		Social Gaming	$	4,000,000		4,029,259		4,000,000		5.59	%

Serious Energy, Inc.		Sunnyvale, CA
Common shares		Green Materials		178,095		739,130		712,380		1.00	%

See Notes to the Consolidated Financial Statements.

GSV CAPITAL CORP.

(formerly NeXt Innovation Corp.)

SCHEDULE OF INVESTMENTS (continued)

December 31, 2011

Portfolio Investments*	Headquarters / Industry		Shares / Par Amount		Cost		Fair Value		% of Net Assets
SharesPost, Inc.		San Bruno, CA
Preferred shares, Series B		Online		1,776,970	$	2,257,984	$	2,256,752		3.16	%
Common warrants, $0.13 strike price, expire 6/15/2018		Marketplace (Finance)		770,934		23,128		17,731		0.02	%
Total						2,281,112		2,274,483		3.18	%

Silver Spring Networks, Inc.		Redwood City, CA
Common shares		Smart Grid		110,143		1,153,381		1,101,430		1.54	%

StormWind, LLC		Scottsdale, AZ
Preferred shares, Series B		Electronic		1,711,111		959,209		946,335		1.32	%
Preferred warrants, $0.64 strike price, expire 12/1/2012		Marketing and Business Services		1,568,518		53,665		53,665		0.08	%
Total						1,012,874		1,000,000		1.40	%

The Echo System Corp. ⁽¹⁾		New York, NY
Structured note, 6%, due 1/28/2013, and warrant, $0.20 strike price, expires 11/14/2016		Social Analytics	$	500,000		505,823		500,000		0.70	%

The rSmart Group, Inc.		Scottsdale, AZ
Preferred shares, Series B		Higher Education Learning Platform		480,769		513,311		500,000		0.70	%

TrueCar, Inc.		Santa Monica, CA
Common shares		Online Marketplace (Cars)		377,358		2,014,551		1,999,997		2.80	%

Twitter, Inc.		San Francisco, CA
Common shares		Social Communication		735,600		12,304,345		12,113,493		16.94	%

ZocDoc Inc.		New York, NY
Preferred shares		Online Medical Scheduling		200,000		3,563,178		3,500,000		4.89	%

ZoomSystems		San Francisco, CA
Preferred shares, Series A		Smart e-tail (Retail)		1,250,000		260,476		250,000		0.35	%

Total Portfolio Investments						65,658,866		64,078,150		89.62	%

See Notes to the Consolidated Financial Statements.

GSV CAPITAL CORP.

(formerly NeXt Innovation Corp.)

SCHEDULE OF INVESTMENTS (continued)

December 31, 2011

Non-Portfolio Investments	Headquarters / Industry	Shares / Par Amount		Cost		Fair Value		% of Net Assets

United States Treasury ⁽¹⁾
United States Treasury Bill, 0%, due 1/26/2012			20,000,000	$	19,999,128	$	20,000,044		27.97	%

Money Market Funds ⁽¹⁾
Fidelity Institutional Money Market Funds
Money Market Portfolio			3,500,000		3,500,000		3,500,000		4.89	%
Prime Money Market Portfolio			3,500,000		3,500,000		3,500,000		4.89	%
Total Money Market Funds					7,000,000		7,000,000		9.78	%

Total Investments				$	92,657,994	$	91,078,194		127.37	%

All portfolio investments are non-control/non-affiliated and non-income producing, unless identified. Equity investments are subject to lock-up restrictions upon their initial public offering.

⁽¹⁾

Investment is income producing.

⁽²⁾

On November 8, 2011, Groupon, Inc. priced its initial public offering, selling 35,000,000 shares at a price of $20.00 per share. GSV Capital Corp.’s shares in Groupon are subject to a lock-up agreement that expires on June 1, 2012.

⁽³⁾

Represents a $4 million unsecured promissory note with an interest rate of 10% and maturity date of August 15, 2012 that was issued by PJB Fund LLC that may be repaid, at PJB Fund LLC’s election, either by transfer of a certain number of shares of common stock of Zynga, Inc. or with a cash amount of equivalent value. The amount payable under the note will be equal to the face amount, plus the greater of accrued interest (at a rate of 10%) or a return based on the relative value of Zynga, Inc. To the extent the borrower repays the note in cash, GSV Capital Corp. would have no further direct or indirect interest in Zynga, Inc. On December 15, 2011, Zynga, Inc. priced its initial public offering, selling 100,000,000 shares at a price of $10.00 per share.

See Notes to the Consolidated Financial Statements.

GSV CAPITAL CORP. AND SUBSIDIARY

(formerly NeXt Innovation Corp.)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2012

(Unaudited)

NOTE 1 — NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

GSV Capital Corp. (formerly NeXt Innovation Corp., the “Company”, “we”, “our” or “GSV Capital”) was formed in September 2010 as a Maryland corporation structured as an externally managed, non-diversified closed-end management investment company. The Company has elected to be treated as a business development company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company is managed by GSV Asset Management, LLC (formerly NeXt Asset Management, “GSV Asset Management”).

The Company’s date of inception is January 6, 2011, which is the date it commenced its development stage activities. On February 28, 2011, the Company, which had not yet begun investment operations, issued 100 shares which were owned by an officer of the Company who is also a principal of GSV Asset Management. On April 28, 2011, the Company priced its initial public offering, selling 3,335,000 shares at a price of $15.00 per share. The initial public offering closed on May 3, 2011, resulting in net proceeds to the Company of approximately $46.5 million. The Company’s shares are currently listed on the NASDAQ Capital Market under the symbol “GSVC”. The Company began its investment operations during the second quarter.

On April 13, 2012, the Company formed a wholly-owned subsidiary, GSV Capital Lending, LLC (“GCL”), a Delaware limited liability company, which will originate portfolio loan investments. The application was submitted to the California Department of Corporations and GCL is awaiting receipt of its license from the State.

The Company’s investment objective is to maximize our portfolio’s total return, principally by seeking capital gains on our equity investments. The Company invests principally in the equity securities of venture capital-backed and rapidly growing emerging companies. The Company may also invest on an opportunistic basis in select publicly-traded equity securities of rapidly growing companies that otherwise meet its investment criteria.

On March 28, 2011, the board of directors (the “Board”) of the Company approved Articles of Amendment and Restatement, reflecting a change in the Company’s name from NeXt BDC Capital Corp. to NeXt Innovation Corp., which Articles of Amendment and Restatement became effective upon filing with the State Department of Assessment and Taxation of the State of Maryland on March 29, 2011. Then, on May 26, 2011, the board of directors of the Company approved Articles of Amendment, reflecting a change in the Company’s name from NeXt Innovation Corp. to GSV Capital Corp., which Articles of Amendment became effective upon filing with the State Department of Assessment and Taxation of the State of Maryland on May 26, 2011.

On September 26, 2011, the Company priced a follow-on equity offering, selling 2,185,000 of common shares at a price of $14.15 per share, including an exercise in full by the underwriters of their option to purchase an additional 285,000 shares of common stock to cover overallotments. The follow-on equity offering resulted in net proceeds to the Company of approximately $29.6 million.

On February 10, 2012, the Company priced a subsequent follow-on equity offering, selling 6,900,000 of common shares at a price of $15.00 per share, including an exercise in full by the underwriters of their option to purchase an additional 900,000 shares of common stock to cover overallotments. The follow-on equity offering resulted in net proceeds to the Company of approximately $96.2 million.

On May 11, 2012, the Company priced an additional follow-on equity offering, selling 6,900,000 of common shares at a price of $16.25 per share, including an exercise in full by the underwriters of their option to purchase an additional 900,000 shares of common stock to cover overallotments. The follow-on equity offering resulted in net proceeds to the Company of approximately $105.4 million.

Summary of Significant Accounting Policies

Basis of Presentation

The interim consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X. In the opinion of management, all adjustments, all of which were of a normal recurring nature, considered necessary for the fair presentation of financial statements for the interim period have been included. The results of operations for the current period are not necessarily indicative of results that ultimately may be achieved for any other interim period or for the year ending December 31, 2012. The interim unaudited consolidated financial statements and notes hereto should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

In accordance with Regulation S-X under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, the Company does not consolidate portfolio company investments.

Basis of Consolidation

Under Article 6 of Regulation S-X and the American Institute of Certified Public Accountants’ Audit and Accounting Guide for Investment Companies, we are precluded from consolidating any entity other than another investment company or a controlled operating company which provides substantially all of its services and benefits to us. Accordingly, our financial statements include our accounts and the accounts of GCL, our wholly-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements requires the Company to make a number of significant estimates. These include estimates of fair value of certain assets and liabilities and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the consolidated financial statements and the reported amounts of certain revenues and expenses during the reported period. It is likely that changes in these estimates will occur in the near term. Our estimates are inherently subjective in nature and actual results could differ from our estimates and the differences could be material.

Investments

The Company applies fair value accounting in accordance with GAAP. The Company generally values its assets on a quarterly basis, or more frequently if required under the 1940 Act. Securities for which market quotations are readily available on an exchange are valued at the closing price of such security on the valuation date; however, if they remain subject to lock-up restrictions they are discounted accordingly. The Company may also obtain quotes with respect to certain of its investments from pricing services or brokers or dealers in order to value assets. When doing so, the Company determines whether the quote obtained is sufficient according to GAAP to determine the fair value of the security. If determined adequate, the Company uses the quote obtained.

Securities for which reliable market quotations are not readily available or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of GSV Asset Management, the Board or the Valuation Committee of the Board (the “Valuation Committee”), does not represent fair value, shall each be valued as follows:

The quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals responsible for the portfolio investment;

Preliminary valuation conclusions are then documented and discussed with GSV Asset Management senior management;

An independent third-party valuation firm is engaged by, or on behalf of, the Valuation Committee to conduct independent appraisals and review management’s preliminary valuations and make their own independent assessment, for all material investments;

The Valuation Committee discusses valuations and recommends the fair value of each investment in the portfolio in good faith based on the input of GSV Asset Management and the independent third-party valuation firm; and,

The Board then discusses the valuations and determines in good faith the fair value of each investment in the portfolio based upon input of GSV Asset Management, estimates from the independent valuation firm and the recommendations of the Valuation Committee.

In making our good faith determination of the fair value of investments, we consider valuation methodologies consistent with industry practice. Valuation methods, among other measures and as applicable, may include comparisons to prices from secondary market transactions and recent venture capital financings, analysis of financial ratios and valuation metrics of the portfolio companies that issued such private equity securities to peer companies that are public, analysis of the portfolio companies’ most recent financial statements and forecasts, and the markets in which the portfolio company does business, and other relevant factors.

When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Company will consider the pricing indicated by the external event to corroborate the private equity valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1. Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access (examples include active exchange-traded equity securities, exchange-traded derivatives, and most U.S. Government and agency securities).

Level 2. Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:

Quoted prices for similar assets or liabilities in active markets;

Quoted prices for identical or similar assets or liabilities in non-active markets (examples include corporate and municipal bonds, which trade infrequently);

Pricing models whose inputs are observable for substantially the full term of the asset or liability (examples include most over-the-counter derivatives, including foreign exchange forward contracts); and,

Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability.

Level 3. Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability (examples include certain of our private equity investments).

When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore gains and losses for such assets and liabilities categorized within the Level 3 table set forth in Note 3 may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the quarter in which the reclassifications occur.

Securities Transactions

Securities transactions are accounted for on the date the transaction for the purchase or sale of the securities is entered into by the Company (i.e., trade date). Securities transactions outside conventional channels, such as private transactions, are recorded as of the date the Company obtains the right to demand the securities purchased or to collect the proceeds from a sale, and incurs an obligation to pay for securities purchased or to deliver securities sold, respectively.

Portfolio Company Investment Classification

We are a non-diversified company within the meaning of the 1940 Act. We classify our investments by level of control. As defined in the 1940 Act, control investments are those where there is the power to exercise a controlling influence over the management or policies of a company. Control is generally deemed to exist when a company or individual directly or indirectly owns beneficially more than 25% of the voting securities of an investee company. Affiliated investments and affiliated companies are defined by a lesser degree of influence and are deemed to exist when a company or individual directly or indirectly owns, controls or holds the power to vote 5% or more of the outstanding voting securities of another person.

Cash

The Company places its cash with U.S. Bank, N.A. and First Republic Bank, N.A., and at times, cash held in these accounts may exceed the Federal Deposit Insurance Corporation insured limit. The Company also invests a portion of its cash in money market funds, within limitations of the 1940 Act.

Revenue Recognition

The Company’s revenue recognition policies are as follows:

Sales: Gains or losses on the sale of investments are determined using the specific identification method.

Interest: Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis.

Dividends: Dividend income is recognized on the ex-dividend date.

Investment Transaction Costs and Escrow Deposits

Commissions and other costs associated with an investment transaction, including legal expenses, are included in the cost basis of purchases and deducted from the proceeds of sales. The Company makes certain acquisitions on the secondary market which involves making deposits to escrow accounts until certain conditions are met including the underlying private company’s right of first refusal. If the underlying private company does not exercise its right to first refusal and all other conditions are met, then the funds in the escrow account are delivered to the seller and the account is closed. These transactions are reflected on the Statement of Assets and Liabilities as Escrow deposits. At June 30, 2012 and December 31, 2011, the Company had $0 in Escrow deposits.

Payable for Unsettled Securities Transaction

Payable for unsettled securities transaction relates to the purchase of the United States Treasury Bill that was unsettled at December 31, 2011 and settled in January 2012.

Unrealized Appreciation or Depreciation on Investments

Unrealized appreciation or depreciation is calculated as the difference between the fair value of the investment and the cost basis of such investment.

U.S. Federal and State Income Taxes

The Company intends to elect to be treated as a regulated investment company (“RIC”) under subchapter M of the Internal Revenue Code of 1986, as amended, and intends to operate in a manner so as to qualify for the tax treatment applicable to RICs. In order to qualify as a RIC, among other things, the Company is required to distribute to its stockholders on a timely basis at least 90% of investment company taxable income, as defined by the Code, for each year. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal and state income taxes on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends. Rather, any tax liability related to income earned by the Company will represent obligations of the Company’s investors and will not be reflected in the consolidated financial statements of the Company.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. The Company recognizes the tax benefits of uncertain tax positions only where the position has met the “more-likely-than-not” threshold. The Company classifies penalties and interest associated with income taxes, if any, as income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, ongoing analyses of tax laws, regulations and interpretations thereof. The Company did not have any unrecognized tax benefits as of the period presented herein. The Company identified its major tax jurisdictions as U.S. federal and California, and is not aware of any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will change materially in the next 12 months.

Organization and Offering Costs

Organization costs include costs relating to the formation and incorporation of the business. These costs were expensed as incurred. For the three months ended June 30, 2011, and for the period from January 6, 2011 (date of inception) to June 30, 2011, the Company has incurred and expensed organization costs of $97,855 and $192,495, respectively. The Company did not incur organization costs for the six months ended June 30, 2012.

Offering costs include legal fees and other costs pertaining to the public offerings. As of June 30, 2012, $737,737 of offering costs were offset against capital proceeds from the secondary offerings on May 11, 2012 and February 10, 2012. As of June 30, 2011, $523,581 of offering costs were offset against capital proceeds from the initial public offering on April 28, 2011. As of December 31, 2011, $56,436 of offering costs were deferred which were related to our offering on February 10, 2012.

Per Share Information

Basic and diluted earnings (loss) per common share is calculated using the weighted average number of shares outstanding for the period presented. Basic and diluted earnings (loss) per share are the same since there are no potentially dilutive securities outstanding.

Capital Accounts

Certain capital accounts including undistributed net investment income, accumulated net realized gain or loss, net unrealized appreciation or depreciation, and paid-in capital in excess of par, are adjusted, at least annually, for permanent differences between book and tax. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from GAAP. GAAP requires that certain components of net assets relating to permanent difference be reclassified between financial and tax reporting. These reclassifications have no effect on the net assets or net asset value per share and are intended to enable the Company’s stockholders to determine the amount of accumulated and undistributed earnings they potentially could receive in the future and on which they could be taxed. For the period from January 6, 2011 (date of inception) to December 31, 2011, the net investment loss of $2,033,864 was determined to be a permanent difference and reduced paid-in capital in excess of par in the Statement of Assets and Liabilities.

Recently Adopted Accounting Standards

In May 2011, the Financial Accounting Standards Board (“FASB”) issued guidance clarifying how to measure and disclose fair value. This guidance amends the application of the “highest and best use” concept to be used only in the measurement of fair value of nonfinancial assets, clarifies that the measurement of the fair value of equity-classified financial instruments should be performed from the perspective of a market participant who holds the instrument as an asset, clarifies that an entity that manages a group of financial assets and liabilities on the basis of its net risk exposure can measure those financial instruments on the basis of its net exposure to those risks, and clarifies when premiums and discounts should be taken into account when measuring fair value. The fair value disclosure requirements also were amended. The amended guidance is to be applied prospectively. For public entities, the guidance is effective during interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have a significant impact on our financial condition, results of operations or cash flows.

NOTE 2 — RELATED PARTY ARRANGEMENTS

Investment Advisory Agreement

The Company entered into an investment advisory agreement with GSV Asset Management (the “Advisory Agreement”) in connection with its initial public offering. Pursuant to the Advisory Agreement, GSV Asset Management will be paid a base annual fee of 2% of gross assets, and an annual incentive fee equal to the lesser of (i) 20% of the Company’s realized capital gains during each calendar year, if any, calculated on an investment-by-investment basis, subject to a non-compounded preferred return, or “hurdle,” and a “catch-up” feature, and (ii) 20% of the Company’s realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees. For the period from the close of the initial public offering through and including December 31, 2011, the fee was payable monthly in arrears, and was calculated based on the initial value of the Company’s assets upon the closing of the public offering. For the three and six months ended June 30, 2012, GSV Asset Management earned $1,126,091 and $1,748,017 in base management fees and $0 in incentive fees, respectively. For the three months ended June 30, 2011 and for the period from January 6, 2011 (date of inception) to June 30, 2011, GSV Asset Management earned $150,943 in base management fees and $0 in incentive fees.

As of June 30, 2012, the Company was due $5,901 from GSV Asset Management for reimbursement of legal fees paid by the Company that were the responsibility of GSV Asset Management, and is included in the Statement of Assets and Liabilities.

As of June 30, 2012, the Company owed certain officers and directors $12,717 for reimbursements of other expenses. The Company owed GSV Asset Management $17,159 for reimbursements of travel-related expenses. These are included in the Statement of Assets and Liabilities.

As of December 31, 2011, the Company was due $13,470 from GSV Asset Management for reimbursement of travel-related expenses paid for by the Company that were the responsibility of GSV Asset Management, and is included in the Statement of Assets and Liabilities.

As of December 31, 2011, the Company owed certain officers and directors $10,782 for reimbursements of travel-related and other expenses. The Company owed GSV Asset Management $78,427 for management fees and reimbursements of travel-related and other expenses. These are included in the Statement of Assets and Liabilities.

Administration Agreement

The Company entered into an administration agreement with GSV Capital Service Company (the “Administration Agreement”) to provide administrative services, including furnishing the Company with office facilities, equipment, clerical, bookkeeping, record keeping services and other administrative services, in connection with its initial public offering and ongoing operations. The Company reimburses GSV Capital Service Company an allocable portion of overhead and other expenses in performing its obligations under the Administration Agreement. There were $602,201 and $947,795 in such costs incurred under the Administration Agreement for the three and six months ended June 30, 2012, respectively. There were $113,035 in such costs incurred under the Administration Agreement for the three months ended June 30, 2011 as well as for the period from January 6, 2011 (date of inception) to June 30, 2011.

License Agreement

The Company entered into a license agreement with GSV Asset Management pursuant to which GSV Asset Management has agreed to grant the Company a non-exclusive, royalty-free license to use the name ‘‘GSV.’’ Under this agreement, the Company has the right to use the GSV name for so long as the Advisory Agreement with GSV Asset Management is in effect. Other than with respect to this limited license, the Company has no legal right to the ‘‘GSV’’ name.

NOTE 3 — PORTFOLIO INVESTMENTS AND FAIR VALUE

At June 30, 2012, the Company had 41 investments in 34 portfolio companies. The total cost and fair value of the 41 positions were $174,181,527 and $171,598,410, respectively. At December 31, 2011, the Company had 24 investments in 21 portfolio companies. The total cost and fair value of the 24 positions were $65,658,866 and $64,078,150, respectively. The composition of our investments as of June 30, 2012 and December 31, 2011 are as follows:

	June 30, 2012 (Unaudited)				December 31, 2011
	Cost		Fair Value		Cost		Fair Value
Common Stock	$	91,081,313	$	87,305,524	$	43,451,594	$	42,053,669
Preferred Stock		82,751,098		83,961,230		17,595,397		17,453,085
Structured Note		250,000		250,000		4,535,082		4,500,000
Warrants		99,116		81,656		76,793		71,396
Total Portfolio Investments		174,181,527		171,598,410		65,658,866		64,078,150

Non-Portfolio Investments		16,000,000		16,000,000		26,999,128		27,000,044
Total Investments	$	190,181,527	$	187,598,410	$	92,657,994	$	91,078,194

The table below presents the valuation techniques and the nature of significant inputs used to determine the fair values of our Levels 2 and 3 investments as of June 30, 2012.

Asset	Fair Value		Valuation Techniques	Unobservable inputs	Range
Common stock in public company	$	9,361,100	Market approach	Discount for lack of marketability	14%
Common stock in private companies	$	74,192,692	Market approach	Precedent transactions	N/A
Preferred stock in private companies	$	83,961,230	Market approach	Precedent transactions	N/A
Structured note	$	250,000	Income approach	Expected return	10%
Warrants	$	81,656	Option pricing model	Term to expiration*	See below
				Stock price*	See below
				Volatility*	See below

* The Echo System Corp. warrants have an estimated term of 4.4 years, a stock price of $3.20 and a volatility of 40%, and the SharesPost, Inc. warrants have an estimated term of 2.0 years, a stock price of $0.10 and a volatility of 35%.

The significant unobservable input used in the fair value of the common stock in public companies is the discount for lack of marketability. A higher discount results in a lower value, all else equal. The significant unobservable inputs used in the fair value of the warrants are the term to expiration, stock price and volatility. A higher stock price and a longer time to expiration result in higher values, all else equal.

The fair values of our investments disaggregated into the three levels of the fair value hierarchy based upon the lowest level of significant input used in the valuation as of June 30, 2012 and December 31, 2011 are as follows:

As of June 30, 2012 (Unaudited)

	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Common Stock	$	3,751,732	$	9,361,100	$	74,192,692	$	87,305,524
Preferred Stock		-		-		83,961,230		83,961,230
Money Market Funds		16,000,000		-		-		16,000,000
Structured Note		-		-		250,000		250,000
Warrants		-		-		81,656		81,656
Total Investments	$	19,751,732	$	9,361,100	$	158,485,578	$	187,598,410

As of December 31, 2011

	Quoted Prices in Active Markets for Identical Securities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Common Stock	$	-	$	1,188,288	$	40,865,381	$	42,053,669
U.S. Treasury Bill		20,000,044		-		-		20,000,044
Preferred Stock		-		-		17,453,085		17,453,085
Money Market Funds		7,000,000		-		-		7,000,000
Structured Note		-		-		4,500,000		4,500,000
Warrants		-		-		71,396		71,396
Total Investments	$	27,000,044	$	1,188,288	$	62,889,862	$	91,078,194

The aggregate values of Level 3 portfolio investments changed during the six months ended June 30, 2012 and the period from January 6, 2011 (date of inception) to December 31, 2011 as follows:

	Six months ended June 30, 2012 (Unaudited)
	Common Stock			Preferred Stock		Structured Note			Warrants			Total
Fair value as of December 31, 2011	$	40,865,381		$	17,453,085	$	4,500,000		$	71,396		$	62,889,862
Purchases of investments		44,626,865			64,421,634		854,236			-			109,902,735
Exercises, conversions and assignments ⁽¹⁾		-			734,067		(756,390	)		22,323			-
Sales and settlements		-			-		(3,002,665	)		-			(3,002,665	)
Realized loss included in earnings		-			-		(1,380,263	)		-			(1,380,263	)
Change in unrealized appreciation (depreciation) included in earnings		(1,938,454	)		1,352,444		35,082			(12,063	)		(562,991	)
Transfer to Level 2		(9,361,100	)		-		-			-			(9,361,100	)
Fair value as of June 30, 2012	$	74,192,692		$	83,961,230	$	250,000		$	81,656		$	158,485,578
Change in unrealized appreciation (depreciation) on Level 3 investments still held as of June 30, 2012	$	(830,741	)	$	1,352,444	$	-		$	(12,063	)	$	509,640

(1)

During the six months ended June 30, 2012, the Company converted its structured notes to preferred shares in The Echo System Corp. and exercised its warrants for preferred shares in StormWind, LLC. A portion of The Echo System Corp. structured notes attributable to the warrants was reclassified during the same period.

	From January 6, 2011 (date of inception) to December 31, 2011
	Common Stock			Preferred Stock			Structured Note			Warrants			Total
Fair value as of January 6, 2011	$	-		$	-		$	-		$	-		$	-
Purchases of investments		43,451,594			17,595,397			4,535,082			76,793			65,658,866
Change in unrealized depreciation included in earnings		(1,397,925	)		(142,312	)		(35,082	)		(5,397	)		(1,580,716	)
Transfer to Level 2		(1,188,288	)		-			-			-			(1,188,288	)
Fair value as of December 31, 2011	$	40,865,381		$	17,453,085		$	4,500,000		$	71,396		$	62,889,862

Change in unrealized depreciation on Level 3 investments still held as of December 31, 2011	$	(457,628	)	$	(142,312	)	$	(35,082	)	$	(5,397	)	$	(640,419	)

During the six months ended June 30, 2012, there were two transfers between levels. Due to the expiration of the lock-up agreement on our shares in Groupon, Inc. on June 1, 2012, the closing price on a public exchange on June 29, 2012 was used for our valuation as of June 30, 2012. This resulted in a transfer of Groupon, Inc. from Level 2 to Level 1. Due to the initial public offering of Facebook, Inc. on May 17, 2012, observable inputs became available for our valuation as of June 30, 2012. However, our shares in Facebook, Inc. are presently subject to a lock-up agreement that expires on November 14, 2012. As such, the fair value for Facebook, Inc. was estimated using the closing price on a public exchange as of June 29, 2012, adjusted for a discount due to a lack of marketability of 14% that was primarily based on the market price of publicly traded put options with a similar term as our lock-up as of June 30, 2012.

During the period from January 6, 2011 (date of inception) to December 31, 2011, there was one transfer from Level 3 to Level 2 related to our investment in Groupon, Inc. Due to its public offering in November 2011, observable inputs became available for our valuation as of December 31, 2011. However, during that period, our shares in Groupon, Inc. were subject to a lock-up agreement that was scheduled to expire on June 1, 2012. As such, the fair value for Groupon, Inc. was estimated using the closing price on a public exchange as of the valuation date, adjusted for a discount due to a lack of marketability of 28% that was primarily based on the market price of publicly traded put options with a similar term as our lock-up as of December 31, 2011.

NOTE 4 — EQUITY OFFERINGS AND RELATED EXPENSES

We issued 5,520,100 shares of our common stock during the period from January 6, 2011 (date of inception) to December 31, 2011. We issued 13,800,000 shares of our common stock during the six months ended June 30, 2012. The proceeds raised, the related underwriting fees, the offering expenses and the prices at which these shares were issued are as follows:

Issuances of Common Stock	Number of Shares		Gross Proceeds Raised		Underwriting Fees		Offering Expenses			Offering Price
February 28, 2011		100	$	1,500	$	-	$	-		$	15.00
April 28, 2011		3,335,000		50,025,000		3,501,750		527,166	⁽¹⁾		15.00
September 27, 2011		2,185,000		30,917,750		1,267,300		531,122	⁽²⁾		14.15
February 10, 2012		6,900,000		103,500,000		7,245,000		326,077			15.00
May 11, 2012		6,900,000		112,125,000		6,727,500		411,660			16.25

(1)	Includes $3,585 of offering expenses that were accrued as of September 30, 2011.
(2)	Amount was reduced by $18,878 after actual expenses for the offering were determined as of December 31, 2011.

NOTE 5 — NET DECREASE IN NET ASSETS PER COMMON SHARE

The following information sets forth the computation of net decrease in net assets resulting from operations per common share for the three and six months ended June 30, 2012, for the three months ended June 30, 2011 and for the period from January 6, 2011 (date of inception) to June 30, 2011.

	Three months ended June 30,						Six months ended June 30,
		2012			2011			2012			2011⁽¹⁾
Net decrease in net assets resulting from operations	$	(5,474,894	)	$	(624,939	)	$	(5,557,957	)	$	(735,747	)
Weighted average common shares		16,287,133			2,345,595			12,837,133			1,735,385
Basic and diluted earnings per common share	$	(0.34	)	$	(0.27	)	$	(0.43	)	$	(0.42	)⁽²⁾

(1)	For the period from January 6, 2011 (date of inception) to June 30, 2011.
(2)	Weighted average common shares for the period from January 6, 2011 (date of inception) to June 30, 2011 was calculated starting from the issuance of 100 shares on February 28, 2011.

NOTE 6 — LEGAL CONTINGENCIES

The Company is currently not subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our business, financial condition or results of operations.

NOTE 7 — FINANCIAL HIGHLIGHTS

	Three months ended June 30, 2012			Six months ended June 30, 2012
Per Share Data:
Net asset value at beginning of period	$	13.47		$	12.95
Issuance of common shares		0.99	⁽³⁾		1.91	⁽³⁾
Underwriters’ discount		(0.35	)⁽²⁾		(0.72	)⁽²⁾
Offering costs		(0.02	)⁽²⁾		(0.04	)⁽²⁾
Net investment loss		(0.13	)⁽¹⁾		(0.16	)⁽²⁾
Realized loss		(0.07	)⁽²⁾		(0.07	)⁽²⁾
Change in unrealized depreciation		(0.08	)⁽⁵⁾		(0.06	)⁽⁵⁾
Net asset value at end of period	$	13.81		$	13.81

Per share market value at end of period	$	9.30		$	9.30
Total return based on market value		(50.27	)%⁽⁶⁾		(33.33	)%⁽⁶⁾
Total return based on net asset value		2.52	%⁽⁶⁾		6.64	%⁽⁶⁾
Shares outstanding at end of period		19,320,100			19,320,100

Ratio / Supplemental Data:
Net assets at end of period	$	266,860,054		$	266,860,054
Average net assets	$	201,571,697		$	153,430,875
Annualized ratio of gross operating expenses to average net assets ⁽⁸⁾		4.36	%		4.45	%
Annualized ratio of net operating expenses to average net assets ⁽⁸⁾		4.36	%		4.45	%
Annualized ratio of net investment income to average net assets ⁽⁸⁾		(4.14	)%		(4.15	)%

	For the period from January 6, 2011 (date of inception) to June 30, 2011			For the period from January 6, 2011 (date of inceptions) to December 31, 2011
Per Share Data:
Net asset value at beginning of period	$	-		$	-
Issuance of common shares		15.00	⁽²⁾		14.67	⁽⁴⁾
Underwriters’ discount		(1.05	)⁽²⁾		(0.86	)⁽²⁾
Offering costs		(0.16	)⁽²⁾		(0.19	)⁽²⁾
Net investment loss		(0.20	)⁽²⁾		(0.37	)⁽²⁾
Realized loss		-			-
Change in unrealized depreciation		(0.02	)⁽²⁾		(0.30	)⁽²⁾
Net asset value at end of period	$	13.57		$	12.95

Per share market value at end of period	$	13.93		$	13.95
Total return based on market value		(7.13	)%⁽⁷⁾		(7.00	)%⁽⁷⁾
Total return based on net asset value		(9.53	)%⁽⁷⁾		(13.67	)%⁽⁷⁾
Shares outstanding at end of period		3,335,100			5,520,100

Ratio / Supplemental Data:
Net assets at end of period	$	45,265,422		$	71,503,248
Average net assets	$	22,999,604		$	44,532,523
Annualized ratio of gross operating expenses to average net assets ⁽⁸⁾		5.22	%		5.01	%
Annualized ratio of net operating expenses to average net assets ⁽⁸⁾		5.22	%		5.01	%
Annualized ratio of net investment income to average net assets ⁽⁸⁾		(5.22	)%		(4.64	)%

(1)	Based on weighted average number of shares outstanding for the period.
(2)	Based on shares outstanding at end of period.
(3)	Issuance of common shares for the three months ended June 30, 2012 is based on the change in net asset value from the secondary offering on February 10, 2012. Issuance of common shares for the six months ended June 30, 2012 is based on the change in net asset value from the secondary offerings on February 10, 2012 and May 11, 2012.
(4)	Issuance of common shares for the period from January 6, 2011 (date of inception) to December 31, 2011 is based on the weighted average offering price for the shares issued during the period.
(5)	Includes the impact of the different share amounts as a result of calculating certain per share data based on the weighted average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.
(6)	Total return based on market value is based on the change in market price per share between the opening and ending market values per share in the period. Total return based on net asset value is based upon the change in net asset value per share between the opening and ending net asset values per share and the issuance of common shares in the period. The percentage returns noted above are based on the increase in our net asset value attributable to issuances of our common stock at a premium to our net asset value per share, rather than investment returns. Such issuance of our common stock at a premium to net asset value per share are not typical, and may not occur in the future. The total returns are not annualized.
(7)	Total return based on market value is based on the change in market price per share assuming an investment at the initial public offering price of $15.00 per share. Total return based on net asset value is based upon the change in net asset value per share between the opening and ending net asset values per share and the issuance of common shares in the period. The total returns are not annualized.
(8)	Financial Highlights for periods of less than one year are annualized and the ratios of operating expenses to average net assets and net investment loss to average net assets are adjusted accordingly. Non-recurring expenses were not annualized. For the period from January 6, 2011 (date of inception) to June 30, 2011 and for the period from January 6, 2011 (date of inception) to December 31, 2011, the Company incurred $192,495 and $198,831 of organizational expenses, respectively, which were deemed to be non-recurring. Average net assets were calculated starting from the issuance of 100 shares on February 28, 2011.

NOTE 8 — INCOME TAX

The Company will elect to be treated for federal income tax purposes as a RIC. As a RIC, the Company generally will not pay corporate-level U.S. federal income taxes on any net ordinary income or capital gains that the Company distributes to its stockholders as dividends. In addition to meeting other requirements, the Company must generally distribute at least 90% of its investment company taxable income to qualify for the special treatment accorded to a RIC and maintain its RIC status. As part of maintaining RIC status, undistributed taxable income (subject to a 4% excise tax) pertaining to a given fiscal year may be distributed up to 12 months subsequent to the end of that fiscal year, provided such dividends are declared prior to the later of (1) the fifteenth day of the ninth month following the close of that fiscal year or (2) the extended due date for filing the federal income tax return for that fiscal year.

NOTE 9 — SUBSEQUENT EVENTS

Subsequent to June 30, 2012, the Company closed on investments of $42.6 million, plus transaction costs as follows:

The Company closed on an investment of $1,999,999, plus transaction costs, in Dataminr, Inc., a social media analytics company, on July 2, 2012.

The Company closed on an investment of $1,999,998, plus transaction costs, in Maven Research, Inc., a global knowledge marketplace, on July 2, 2012.

The Company closed on an investment of $500,000, plus transaction costs, in NestGSV Silicon Valley, LLC, an entrepreneurial education company, on July 10, 2012.

The Company closed on an investment of $1,202,500, plus transaction costs, in Twitter, Inc., a social communication company, on July 10, 2012.

The Company closed on an investment of $10,000,000, plus transaction costs, in 2tor, Inc., an online education company, on July 16, 2012.

The Company closed on an investment of $5,000,000, plus transaction costs, in Totus Solutions, Inc., a wireless infrastructure platform, on July 20, 2012.

The Company closed on investments of $999,999, $15,228,070 and $135,000, plus transaction costs, in Palantir Technologies, Inc., a data security company, on July 24, 2012, July 27, 2012 and July 31, 2012, respectively.

The Company closed on an investment of $1,001,000, plus transaction costs, in Gilt Groupe, Inc., an eCommerce platform, on July 27, 2012.

The Company closed on an investment of $400,000, plus transaction costs, in AltEgo, LLC, an avatar technology and games developer, on August 7, 2012.

The Company closed on an investment of $500,000, plus transaction costs, in SinoLending Ltd, a Chinese P2P lending platform, on August 7, 2012.

The Company closed on an investment of $3,589,659, plus transaction costs, in Spotify Technology S.A., a digital music service, on August 7, 2012.

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

Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about GSV Capital, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as ‘‘anticipates,’’ ‘‘expects,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘will,’’ ‘‘may,’’ ‘‘continue,’’ ‘‘believes,’’ ‘‘seeks,’’ ‘‘estimates,’’ ‘‘would,’’ ‘‘could,’’ ‘‘should,’’ ‘‘targets,’’ ‘‘projects,’’ and variations of these words and similar expressions are intended to identify forward-looking statements.

The forward looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including statements as to:

our future operating results;

our business prospects and the prospects of our portfolio companies;

the impact of investments that we expect to make;

our contractual arrangements and relationships with third parties;

the dependence of our future success on the general economy and its impact on the industries in which we invest;

the ability of our portfolio companies to achieve their objectives;

our expected financings and investments;

the adequacy of our cash resources and working capital; and

the timing of cash flows, if any, from the operations of our portfolio companies.

These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:

an economic downturn could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our equity investments in such portfolio companies,

an economic downturn could disproportionately impact the market sectors in which a significant portion of our portfolio is concentrated, causing us to suffer losses in our portfolio,

an inability to access the equity markets could impair our investment activities,

interest rate volatility could adversely affect our results, particularly if we opt to use leverage as part of our investment strategy, and

the risks, uncertainties and other factors we identify in ‘‘Risk Factors’’ and elsewhere in this quarterly report on Form 10-Q and in our filings with the SEC.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this quarterly report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in ‘‘Risk Factors’’ and elsewhere in this quarterly report on Form 10-Q. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this quarterly report on Form 10-Q.

The following analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included in the annual report on Form 10-K for the year ended December 31, 2011 and this quarterly report on Form 10-Q.

Overview

We are an externally managed, non-diversified closed-end management investment company that has elected to be treated as a business development company under the 1940 Act. Our investment objective is to maximize our portfolio’s total return, principally by seeking capital gains on our equity and equity-related investments. We invest principally in the equity securities of rapidly growing venture capital-backed emerging companies. We acquire our investments through secondary marketplaces for private companies, negotiations with selling stockholders and direct investments with prospective portfolio companies. We may also invest on an opportunistic basis in select publicly-traded equity securities or certain non-U.S. companies that otherwise meet our investment criteria. Our investment activities are managed by GSV Asset Management, and GSV Capital Service Company provides the administrative services necessary for us to operate.

Our investment philosophy is premised on a disciplined approach of identifying high-growth emerging companies across several key industry themes which may include, among others, social media, mobility, cloud computing, software-as-a-service, green technology and education technology. Our investment adviser’s investment decisions are based on a disciplined analysis of available information regarding each potential portfolio company’s business operations, focusing on the company’s growth potential, the quality of recurring revenues and cash flow and cost structures, as well as an understanding of key market fundamentals. Many of the companies that our investment adviser evaluates have financial backing from top tier venture capital funds or other financial or strategic sponsors.

We seek to deploy capital primarily in the form of non-controlling equity and equity-related investments, including common stock, warrants, preferred stock and similar forms of senior equity, which may or may not be convertible into a portfolio company’s common equity, and convertible debt securities with a significant equity component. We anticipate that substantially all of the net proceeds of our follow-on offerings, which closed in February and May 2012, will be used for the above purposes within six to 12 months, depending on the availability of investment opportunities that are consistent with our investment objectives and market conditions.

We seek to create a low-turnover portfolio that we expect will initially include investments in 25 to 35 companies representing a broad range of investment themes. As of March 31, 2012, we have completed investments in 25 companies for aggregate consideration of approximately $75.5 million (exclusive of transaction fees and costs), or 43.8% of the net proceeds from our initial public offering and subsequent follow-on offerings. We expect that the total number of portfolio companies in which we are invested will increase as our equity capital base grows.

On April 28, 2011, we priced our initial public offering of 3,335,000 shares of our common stock at the offering price of $15.00 per share. The initial public offering closed on May 3, 2011, resulting in net proceeds to GSV Capital Corp. of approximately $46.5 million. On September 26, 2011, we priced a follow-on equity offering of 2,185,000 shares of our common stock at an offering price $14.15 per share. The follow-on equity offering included the full exercise of the underwriters’ option to purchase an additional 285,000 shares of our common stock, resulting in net proceeds to GSV Capital Corp. of approximately $29.6 million. On February 10, 2012, we priced a subsequent follow-on equity offering of 6,900,000 shares of our common stock at an offering price of $15.00 per share. The follow-on equity offering included the full exercise of the underwriters’ option to purchase an additional 900,000 share of our common stock, resulting in net proceeds to GSV Capital Corp. of approximately $96.2 million. On May 11, 2012, we priced an additional follow-on equity offering of 6,900,000 shares of our common stock at an offering price of $16.25 per share. The follow-on offering included the full exercise of the underwriters’ option to purchase an additional 900,000 share of our common stock, resulting in net proceeds to GSV Capital Corp. of approximately $105.4 million. Our shares are currently listed on the NASDAQ Capital Market under the symbol ‘‘GSVC’’.

Investments

The fair value of our investments can be expected to fluctuate in future periods due to changes in our investments and changes in the fair value of the investments. The investments made during the six months ended June 30, 2012 include:

We closed on an investment of $100,000, plus transaction costs, in AlwaysOn, LLC, a social media company, on January 10, 2012.

We closed on an investment of $200,000, plus transaction costs, in Maven Research, Inc., a global knowledge marketplace, on February 28, 2012.

We closed on an investment of $500,000, plus transaction costs, in AltEgo, LLC, an avatar technology and games developer, on February 29, 2012.

We closed on an investment of $4,000,000, plus transaction costs, in Chegg, Inc., an online textbook rental company, on March 7, 2012.

We closed on an investment of $150,000, plus transaction costs, in AlwaysOn, LLC, a social media company, on March 9, 2012.

We closed on an investment of $250,000, plus transaction costs, in The Echo System Corp., a social analytics company, on March 21, 2012.

We closed on an investment of $1,000,000, plus transaction costs, in StormWind LLC, an electronic marketing and business services platform, on March 23, 2012.

We closed on an investment of $855,000, plus transaction costs, in Bloom Energy Corporation, a fuel cell energy company, on March 28, 2012.

We closed on an investment of $2,000,000, plus transaction costs, in CUX, Inc., a corporate education company, on March 29, 2012.

We closed on an investment of $750,000, plus transaction costs, in The Echo System Corp., a social media company, on March 30, 2012.

We closed on an investment of $750,000, plus transaction costs, in The rSmart Group, Inc., a higher education learning platform, on March 30, 2012.

We closed on an investment of $1,143,800, plus transaction costs, in Bloom Energy Corporation, a fuel cell energy company, on April 4, 2012.

We closed on an investment of $9,999,996, plus transaction costs, in Violin Memory, Inc., a flash memory company, on April 11, 2012.

We closed on an investment of $4,000,000, plus transaction costs, in Top Hat, Inc., an internet commerce company, on April 13, 2012.

We closed on investments of $2,369,500, $1,277,500 and $350,000, plus transaction costs, in Control4 Corporation, a smart home automation company, on April 18, 20102, April 19, 2012 and April 20, 2012, respectively.

We closed on an investment of $2,999,998, plus transaction costs, in Global Education Learning (Holdings) Ltd., an Asia-focused education technology company, on April 19, 2012.

We closed on investments of $5,312,492, $4,875,010 and $7,312,498, plus transaction costs, in Twitter, Inc., a social communication company, on April 25, 2012, April 27, 2012, and April 30, 2012, respectively.

We closed on an investment of $3,800,000, plus transaction costs, in Silver Spring Networks, Inc., a smart grid company, on May 1, 2012.

We closed on an investment of $1,969,996, plus transaction costs, in Fullbridge, Inc., a business education company, on May 4, 2012.

We closed on investments of $888,384 and $2,674,048, plus transaction costs, in Palantir Technologies, Inc., a data security company, on May 7, 2012 and May 11, 2012, respectively.

We closed on an investment of $10,000,000, plus transaction costs, in Avenues World Holdings LLC, a globally-focused private school, on May 9, 2012.

We closed on an investment of $6,858,500, plus transaction costs, in Dropbox, Inc., an online storage service, on May 11, 2012.

We closed on an investment of $200,000, plus transaction costs, in AltEgo, LLC, an avatar technology and games developer, on May 11, 2012.

We closed on an investment of $280,005, plus transaction costs, in Fullbridge, Inc., a business education company, on May 15, 2012.

We closed on investments of $40,500, $67,500 and $540,000, plus transaction costs, in Palantir Technologies, Inc., a data security company, on May 16, 2012, May 21, 2012 and May 22, 2012, respectively.

We closed on an investment of $4,800,000, plus transaction costs, in Violin Memory, Inc., a flash memory company, on May 22, 2012.

We closed on an investment of $1,000,000, plus transaction costs, in NestGSV, Inc., an entrepreneurial education company, on May 25, 2012.

We closed on an investment of $1,900,000, plus transaction costs, in Twitter, Inc., a social communication company, on June 1, 2012.

We closed on an investment of $300,000, plus transaction costs, in AltEgo, LLC, an avatar technology and games developer, on June 15, 2012.

We closed on an investment of $10,000,000, plus transaction costs, in Solexel, Inc., a solar technology company, on June 18, 2012.

We closed on investments of $2,400,000 and $1,600,000, plus transaction costs, in Chegg, Inc., an online textbook rental company, on June 20, 2012 and June 25, 2012, respectively.

We closed on an investment of $7,500,000, plus transaction costs, in Kno, Inc., an education software company, on June 27, 2012.

We closed on an investment of $2,000,000, plus transaction costs, in Dailybreak, Inc., a social advertising company, on June 29, 2012.

The fair value, as of June 30, 2012, of all of our portfolio investments was $171,598,410. In addition, we held $16,000,000 in two money market funds as of June 30, 2012. We also held $79,617,068 in unrestricted cash on June 30, 2012.

Results of Operations

Comparison of the three months ended June 30, 2012 and 2011

As April 28, 2011 was the date of our initial public offering, the three months ended June 30, 2011 is not a directly comparable period to the three months ended June 30, 2012.

Investment Income

For the three months ended June 30, 2012, we had investment income of $110,354, or $0.01 per share, which consisted of $102,883 of interest income from our portfolio investments and $7,471 of dividend income from our money market investments.

We did not have investment income for the three months ended June 30, 2011, given that we did not own income producing investments at that time.

Operating Expenses

For the three months ended June 30, 2012, we had $2,190,473 in total operating expenses consisting primarily of investment management fees and administration fees, in addition to legal, audit and consulting fees. The investment advisory fee for the three months ended June 30, 2012, was $1,126,091, representing the base management fee as provided in our investment advisory agreement. Costs incurred under our administration agreement for the three months ended June 30, 2012, were $602,201. Professional fees, consisting of legal, valuation, audit and consulting fees, were approximately $222,561 for the three months ended June 30, 2012.

For the three months ended June 30, 2011, we had $565,305 in total operating expenses, consisting primarily of investment management fees, administration fees, organization expenses and professional fees. The investment advisory fee for the three months ended June 30, 2011, was $150,943, representing the base management fee as provided in our investment advisory agreement. Costs incurred under our administration agreement for the three months ended June 30, 2011 were $113,035. Organizational expenses for the three months ended June 30, 2011 were $97,855. Professional fees, consisting of legal, audit and consulting fees, were approximately $102,582 for the three months ended June 30, 2011.

Net Decrease in Net Assets

For the three months ended June 30, 2012, we had a net change in unrealized depreciation of $2,014,512, or $0.12 per share. The change in unrealized depreciation is primarily a result of our investment in Facebook, Inc. We had a net realized loss of $1,380,263, or $0.08 per share, for the three months ended June 30, 2012, resulting from our investment in PJB Fund LLC, which resulted from fluctuating share prices of Zynga, Inc. Net investment loss was $2,080,119, or $0.13 per share, for the three months ended June 30, 2012, resulting primarily from operating expenses incurred during the quarter. Net decrease in net assets resulting from operations was $5,474,894, or $0.34 per share, for the three months ended June 30, 2012.

For the three months ended June 30, 2011, we had a net change in unrealized depreciation of $59,634, or $0.03 per share. Net investment loss was $565,305, or $0.24 per share, for the three months ended June 30, 2011. Net decrease in net assets resulting from operations was $624,939, or $0.27 per share, for the three months ended June 30, 2011.

The per share figures noted above are based on a weighted-average of 16,287,133 and 2,345,595 shares outstanding for the three months ended June 30, 2012 and 2011, respectively.

Comparison of the six months ended June 30, 2012 and the period from January 6, 2011 (date of inception) to June 30, 2011

As January 6, 2011 was our date of inception and April 28, 2011 was the date of our initial public offering, the period from January 6, 2011 to June 30, 2011 is not a directly comparable period to the six months ended June 30, 2012.

Investment Income

For the six months ended June 30, 2012, we had investment income of $228,159, or $0.02 per share, which consisted of $214,984 of interest income from our portfolio investments and $13,175 of dividend income from our money market investments.

We did not have investment income for the period from January 6, 2011 (date of inception) to June 30, 2011, given that we did not own income producing investments at that time.

Operating Expenses

For the six months ended June 30, 2012, we had $3,402,280 in total operating expenses consisting primarily of investment management fees and administration fees, in addition to legal, audit and consulting fees. The investment advisory fee for the six months ended June 30, 2012, was $1,748,017, representing the base management fee as provided in our investment advisory agreement. Costs incurred under our administration agreement for the six months ended June 30, 2012, were $947,795. Professional fees, consisting of legal, valuation, audit and consulting fees, were approximately $354,406 for the six months ended June 30, 2012.

For the period from January 6, 2011 (date of inception) to June 30, 2011, we had $676,113 in total operating expenses, consisting primarily of investment management fees, administration fees, organization expenses and professional fees. The investment advisory fee for the period from January 6, 2011 (date of inception) to June 30, 2011, was $150,943, representing the base management fee as provided in our investment advisory agreement. Costs incurred under our administration agreement for the period from January 6, 2011 (date of inception) to June 30, 2011 were $113,035. Organizational expenses for the period from January 6, 2011 (date of inception) to June 30, 2011 were $192,495. Professional fees, consisting of legal, audit and consulting fees, were approximately $118,632 for the period from January 6, 2011 (date of inception) to June 30, 2011.

Net Decrease in Net Assets

For the six months ended June 30, 2012, we had a net change in unrealized depreciation of $1,003,317, or $0.08 per share. The change in unrealized depreciation is primarily a result of our investment in Facebook, Inc. We had a net realized loss of $1,380,519, or $0.11 per share, resulting primarily from our investment in PJB Fund LLC, which resulted from fluctuating share prices of Zynga, Inc. Net investment loss was $3,174,121, or $0.25 per share, for the six months ended June 30, 2012, resulting primarily from operating expenses incurred during the period. Net decrease in net assets resulting from operations was $5,557,957, or $0.43 per share, for the six months ended June 30, 2012.

For the period from January 6, 2011 (date of inception) to June 30, 2011, we had a net change in unrealized depreciation of $59,634, or $0.03 per share. Net investment loss was $676,113, or $0.39 per share, for the period from January 6, 2011 (date of inception) to June 30, 2011. Net decrease in net assets resulting from operations was $737,747, or $0.42 per share, for the period from January 6, 2011 (date of inception) to June 30, 2011.

The per share figures noted above are based on a weighted-average of 12,837,133 and 1,735,385 shares outstanding for the six months ended June 30, 2012 and for the period from January 6, 2011 (date of inception) to June 30, 2011, respectively.

Liquidity and Capital Resources

At June 30, 2012, we had investments in 34 portfolio companies with costs totaling $174,181,527, two money market funds totaling $16,000,000 and cash in the amount of $79,617,068.

On February 10, 2012, we priced a follow-on equity offering of 6,900,000 shares of our common stock at an offering price of $15.00 per share. The follow-on equity offering included the full exercise of the underwriters’ option to purchase an additional 900,000 share of our common stock, resulting in net proceeds to GSV Capital Corp. of approximately $96.2 million. On May 11, 2012, we priced a subsequent follow-on equity offering of 6,900,000 shares of our common stock at an offering price of $16.25 per share. The follow-on equity offering included the full exercise of the underwriters’ option to purchase an additional 900,000 share of our common stock, resulting in net proceeds to GSV Capital Corp. of approximately $105.4 million. Our shares are currently listed on the NASDAQ Capital Market under the symbol ‘‘GSVC’’.

Our primary use of cash is to make investments and to pay our operating expenses. We used substantially all of the proceeds of the offerings to invest in portfolio companies as of June 30, 2012, except for amounts retained for purposes of funding our ongoing expenses.

Our current policy is to maintain cash reserves in an amount sufficient to pay our operating expenses, including investment management fees, incentive fees and costs incurred under the administration agreement, for approximately two years. For a description of the investment advisory and administration services we receive, see ‘‘Related Party Transactions and Certain Relationships’’. We incurred approximately $1,126,091 and $1,748,017 in investment management fees and $602,201 and $947,795 in costs incurred under the administration agreement for the three and six months ended June 30, 2012, respectively.

As of June 30, 2012, the fair value of our portfolio investments was equal to the cost of the investments, net of unrealized depreciation representing transaction costs and any fair value adjustments. Seven of our investments had fair value adjustments. In May 2012, we purchased common shares in Dropbox, Inc. We determined the price per share of our investment in common shares to be representative of the fair value price per share for our investment in preferred shares and adjusted our investment in preferred shares accordingly. In March 2012, The Echo System Corp. had a Series A financing round which was determined to be the best indication of value and was used to determine fair value. Facebook, Inc. conducted an IPO in May 2012 and our shares are presently subject to a lock-up agreement that expires on November 14, 2012. The fair value of our investment in Facebook, Inc. was estimated using the close price on a public exchange as of the valuation date, adjusted for a discount due to lack of marketability of 14% that was primarily based on the market price of publicly traded put options with a similar term as the lock-up as of June 30, 2012. We have decreased our estimated fair value of our investment in Serious Energy, Inc. due to recent executive departures. Our investments in Groupon, Inc. and Zynga, Inc. were valued using the close price on a public exchange. Our investment in SharesPost includes Series B preferred shares and warrants for common stock, each of which were valued separately as a part of the initial transaction. After our investment in SharesPost in July 2011, SharesPost held a subsequent financing for Series B preferred shares, which did not include warrants. Accordingly, only our investment in preferred shares was adjusted due to the subsequent financing. The fair value of our investments can be expected to fluctuate in future periods due to changes in our investments and changes in the fair value of the investments.

Off-Balance Sheet Arrangements

As of June 30, 2012, we had no off-balance sheet arrangements, including any risk management of commodity pricing or other hedging practices. However, we may employ hedging and other risk management techniques in the future.

Distribution Policy

The timing and amount of our dividends, if any, will be determined by our board of directors. Any dividends to our stockholders will be declared out of assets legally available for distribution. We intend to focus on making capital gains-based investments from which we will derive primarily capital gains. As a consequence, we do not anticipate that we will pay dividends on a quarterly basis or become a predictable distributor of dividends, and we expect that our dividends, if any, will be much less consistent than the dividends of other business development companies that primarily make debt investments. However, if there are earnings or realized capital gains to be distributed, we intend to declare and pay a dividend at least annually.

We intend to elect to be treated, and intend to qualify annually thereafter, as a RIC under Subchapter M of the Code, beginning with our 2011 taxable year. To obtain and maintain RIC tax treatment, we must, among other things, distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, for each taxable year. In addition, in order to avoid certain excise taxes imposed on RICs, we currently intend to distribute during each calendar year an amount at least equal to the sum of (1) 98% of our ordinary income for the calendar year, (2) 98.2% of our capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year and (3) any ordinary income and net capital gains for preceding years that were not distributed during such years. Although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually, we may in the future decide to retain such capital gains for investment but designate the retained net capital gain as a “deemed distribution”. If this happens, you will be treated as if you received an actual distribution of the capital gains we retain and reinvested the net after-tax proceeds in us. You also may be eligible to claim a tax credit (or, in certain circumstances, a tax refund) equal to your allocable share of the tax we paid on the capital gains deemed distributed to you. See ‘‘Material U.S. Federal Income Tax Considerations.’’ There is no assurance that we will achieve results that will permit the payment of any cash distributions and, to the extent that we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.

Our current intention is to make any distributions out of assets legally available therefrom in additional shares of our common stock under our dividend reinvestment plan, unless you elect to receive your dividends and/or long-term capital gains distributions in cash. Under the dividend reinvestment plan, if a stockholder owns shares of common stock registered in its own name, the stockholder will have all cash distributions (net of any withholding) automatically reinvested in additional shares of common stock unless the stockholder opts out of our dividend reinvestment plan by delivering a written notice to our dividend paying agent prior to the record date of the next dividend or distribution. See ‘‘Dividend Reinvestment Plan.’’ Any distributions reinvested under the plan will nevertheless remain taxable to the U.S. stockholder, although no cash distribution has been made. As a result, if you do not elect to opt out of the dividend reinvestment plan, you will be required to pay applicable federal, state and local taxes on any reinvested dividends even though you will not receive a corresponding cash distribution. In addition, reinvested dividends have the effect of increasing our gross assets, which may correspondingly increase the management fee payable to our investment adviser. If you hold shares in the name of a broker or financial intermediary, you should contact the broker or financial intermediary regarding your election to receive distributions in cash.

Borrowings

We had no borrowings outstanding as of June 30, 2012.

Related Party Transactions

We entered into an investment advisory agreement with GSV Asset Management (the ‘‘Advisory Agreement’’) in connection with our initial public offering. Pursuant to the Advisory Agreement, GSV Asset Management will be paid a base annual fee of 2.00% of gross assets, and an annual incentive fee equal to the lesser of (i) 20% of the GSV Capital’s realized capital gains during each calendar year, if any, calculated on an investment-by-investment basis, subject to a non-compounded preferred return, or ‘‘hurdle,’’ and a ‘‘catch-up’’ feature, and (ii) 20% of the GSV Capital’s realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees. GSV Asset Management earned $1,126,091 and $1,748,017 in base fees and $0 in incentive fees for the three and six months ended June 30, 2012, respectively.

As of June 30, 2012, we were owed $5,901 from GSV Asset Management for reimbursement of legal fees paid for by us that were the responsibility of GSV Asset Management.

In addition as of June 30, 2012, we owed GSV Asset Management $17,159 for reimbursement of travel-related and other expenses. We owed certain officers and directors $12,717 in reimbursements for travel-related and other expenses.

We entered into an Administration Agreement with GSV Capital Service Company (the ‘‘Administration Agreement’’) to provide administrative services, including furnishing us with office facilities, equipment, clerical, bookkeeping services and other administrative services, in connection with our initial public offering. We reimburse GSV Capital Service Company an allocable portion of overhead and other expenses in performing its obligations under the Administration Agreement. There were $602,201 and $947,795 in such costs incurred under the Administration Agreement for the three and six months ended June 30, 2012, respectively.

We also adopted a Code of Ethics which applies to, among others, our senior officers, including our Chief Executive Officer and Chief Financial Officer, as well as all of our officers, directors and employees. Our Code of Ethics requires that all employees and directors avoid any conflict, or the appearance of a conflict, between an individual’s personal interests and our interests. Pursuant to our Code of Ethics, each employee and director must disclose any conflicts of interest, or actions or relationships that might give rise to a conflict, to our Chief Compliance Officer. Our board of directors is charged with approving any waivers under our Code of Ethics. As required by the NASDAQ corporate governance listing standards, the Audit Committee of our board of directors is also required to review and approve any transactions with related parties (as such term is defined in Item 404 of Regulation S-K).

In April 2012, in connection with our investment in Top Hat, Inc., Cherry Tree & Associates, LLC, an investment banking firm, received a fee of approximately $259,000 for its representation of Top Hat, Inc. Mark Moe, who is the brother of our Chief Executive Officer, Michael Moe, presently serves as a Managing Director of Cherry Tree & Associates, LLC, and may therefore be deemed to have an indirect material interest in such transaction.

Critical Accounting Policies

Valuation of Investments at Fair Value

We carry our investments at fair value, as determined in good faith by our board of directors, in accordance with GAAP. Fair value is the price that one would receive upon selling an investment or pay to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for the investment or liability. GAAP emphasizes that valuation techniques should maximize the use of observable market inputs and minimize the use of unobservable inputs. Observable inputs are based on market data obtained from sources independent of the entity and should not be limited to information that is only available to the entity making the fair value determination, or to a small group of users. Observable market inputs should be readily available to participants in that market. In addition, observable market inputs should include a level of transparency that is reliable and verifiable.

GAAP fair value measurement guidance classifies the inputs used to measure these fair values into the following hierarchy:

Level 1. Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we have the ability to access.

Quoted prices for similar assets or liabilities in active markets;

Quoted prices for identical or similar assets or liabilities in non-active markets;

Pricing models whose inputs are observable for substantially the full term of the asset or liability; and

Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability.

An asset’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Securities that are publicly traded are generally valued at the close price on the valuation date; however, if they remain subject to lock-up restrictions they are discounted accordingly. Securities that are not publicly traded or for which there are no readily available market quotations are valued at fair value as determined in good faith by our board of directors.

In connection with that determination, portfolio company valuations are prepared using the most currently available data. As appropriate, we obtain updates on each portfolio company’s financial performance, including information such as economic and industry trends, new product development, and other operational issues.

In making our good faith determination of the fair value of investments, we consider valuation methodologies consistent with industry practice, including but not limited to (i) publicly available information regarding the valuation of the securities based on recent sales in comparable transactions of private companies, (ii) when management believes there are comparable companies that are publicly traded, a review of these publicly traded companies and applicable market multiples of their equity securities and, (iii) an income approach that estimates value based on the expectation of future cash flows that an asset or business will generate.

We engage independent valuation firms to perform valuations of our investments that are not publicly traded or for which there are no readily available market quotations. We also engage independent valuation firms to perform valuations of any securities that trade on private secondary markets, but are not otherwise publicly traded, where there is a lack of appreciable trading or a wide disparity in recently reported trades. We consider the independent valuations, among other factors, in making our fair value determinations.

U.S. Federal and State Income Taxes

Recently Adopted Accounting Standards

In May 2011, the Financial Accounting Standards Board (‘‘FASB’’) issued guidance clarifying how to measure and disclose fair value. This guidance amends the application of the ‘‘highest and best use’’ concept to be used only in the measurement of fair value of nonfinancial assets, clarifies that the measurement of the fair value of equity-classified financial instruments should be performed from the perspective of a market participant who holds the instrument as an asset, clarifies that an entity that manages a group of financial assets and liabilities on the basis of its net risk exposure can measure those financial instruments on the basis of its net exposure to those risks, and clarifies when premiums and discounts should be taken into account when measuring fair value. The fair value disclosure requirements also were amended. This accounting standard is effective prospectively for interim and annual reporting periods beginning after December 15, 2011. The adoption of this guidance did not have a significant impact on our financial condition, results of operations or cash flows.

Recent Developments