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Published May 15, 2026
Hercules Capital told investors it had a disciplined system. Rigorous due diligence. Careful valuations. A growing portfolio. But the story investors got… may not have been the real one.
From May 2025 through early 2026, the company reported rising portfolio values and steady net asset value, even highlighting what it called a multi step, carefully reviewed valuation process. Executives said every deal went through deep underwriting. Every investment was checked, reviewed, and approved.
But according to the complaint, behind the scenes, that process was far weaker. Former employees said deal sourcing often relied on copying other investors. Valuations were handled by a small, overstretched team with limited oversight. And some investments may have been misclassified, overstating portfolio values.
Then, in February 2026, a report raised serious questions. A report questioned the company’s deal sourcing, valuations, and disclosures.
Investors reacted fast. The stock dropped about 8% in a single day.
Confidence was shaken.
A lawsuit now alleges investors were misled.