SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
INVESTMENT MANAGEMENTAugust 13, 2010
David Hearth, Esq.
Paul, Hastings, Janofsky & Walker LLP
55 Second Street, 24th Floor
San Francisco, California 94105-3441
RE: Firsthand Technology Value Fund, Inc.
File Nos.: 333-168195 and 814-00830
Dear Mr. Hearth:
We have reviewed the registration statement on Form N-2 of
Firsthand Technology Value Fund, Inc. (the "Fund"), filed on July 19,
2010, to register its common shares under the Securities Act of 1933
("1933 Act"). The Fund intends to elect to be a business development
company ("BDC") under the Investment Company Act of 1 940 (" 1 940
Act"). On the same date, the Fund also filed a Form N- 14 merger
proxy/prospectus (333- 168196) ("N- 14") in connection with a special
meeting of the shareholders of Firsthand Technology Value Fund
("TVF"), a series of Firsthand Funds, with respect to a merger of TVF
and the Fund ("Merger"). Both the Fund and TVF are managed by
SiVest Group, Inc. ("SiVest").
According to the registration statement and the merger
proxy/prospectus, the Fund will acquire a portfolio of investments from
TVF that consists of TVF's illiquid securities and substantial cash, as
TVF will reduce all of its assets to cash except for the illiquid securities.
We presume that the illiquid investments included in the merger are
carried at fair value in accordance with Section 2(a)(41) of the 1940
Act. We also note that it appears that TVF has continuously held in
excess of 15% of its net assets in illiquid securities since the 4th
quarter of 2007, and that TVF asserts it has made bona fide, yet
unsuccessful, attempts to sell the illiquid securities at carrying value.
You should consider a comment made with respect to one
section applicable to similar disclosure elsewhere in the registration
statement. We have the following comments.
1. Today we provided you will verbal comments on the N- 14. To
the extent those comments are applicable to this filing we will

generally not repeat them, but we will take this opportunity to remind
you that those comments also apply to this registration statement, and
that the disclosure should include any changes resulting from those
comments. In addition, to the extent any of these comments apply to
the N- 14, you should also make appropriate changes.
Cover Paqe
2. Prominently disclose that, unlike TVF the Fund's common stock is
not redeemable at net asset value, that the shares of closed-end
investment companies, such as BDCs, frequently trade at a discount
from net asset value, that there can be no assurance that a trading
market will develop or will be sustainable for the Fund's common stock
after the Reorganization, that the merger is expected to be a taxable
event under federal income tax law, and that accumulated capital loss
carryforwards of approximately $1.6 billion will be lost in the merger.
Please ensure that each topic is appropriately discussed in an
appropriately captioned section in the prospectus (e.g., Important
Merger Consequences).
3. While the registration statement is incomplete, it appears to us
that the public shareholders purchasing in this offering will be subject
to some degree of dilution from Fund expenses. Thus, the second
sentence in the third paragraph on page 3 should be revised
accordingly. See comment 26 below
4. Insert the word "will" for the word "may" in the first sentence of
the first full paragraph on page 4.
Paqe 5
5. Revise the last sentence of the first paragraph with respect to
the accuracy of information contained in the prospectus. The Fund
cannot makes sales of its shares and disclaim responsibility for the
accuracy of material information in the prospectus. This comment also
applies to the disclosure on page 26.
Paqe 7
6. Please ensure that the potential fiduciary conflicts arising from
Mr. Landis' role in the alternative energy start-up companies is
disclosed. Indeed, whether the Fund invests in these companies or
not, there might be a potential for conflict. Does the Fund propose to
invest in these companies? Please revise the disclosure to explain how
2

the conflicts will be resolved to protect shareholder interests. The
revised disclosure must provide enough specificity to apprise
shareholders of the potential fiduciary conflicts. Are there written
procedures that have been formally adopted? Is there an independent
director designated to rule on such conflicts? Are these the corporate
partners with whom Mr. Landis has long-term relationships, as
discussed on page 10? This comment also applies to the first two full
paragraphs on page 20, and the disclosure on page 42.
Are there any common directors between the Fund, TVF, and the
issuers of the illiquid securities? Does the Merger potentially benefit
the issuers of TVF's illiquid securities by not putting the illiquid
securities into the market (as would occur with a liquidation of TVF)?
Please disclose and explain the potential conflicts.
7. The second sentence of the third paragraph should be revised to
define how a portfolio company is determined to be a technology
company (e.g., companies with at least 50% of revenues or 50% of
assets invested in the technology sector).
Paqe 8
8. In the last paragraph before the "Market Opportunity" section
substitute the word "may" for the phrase "expect to", or provide a
definitive date as to when such hiring will occur.
9. In the second sentence of the last paragraph on this page, insert
the word "may" for the word "will".
10. The Fund should delete the 2012 IPO reference for its
investments or it should include objective criteria as to how it will
make such investments (including the illiquid securities acquired in the
merger) .
Paqe 10
11. Please expand the explanation in the first paragraph for "value-
oriented investment philosophy" in terms of a Fund's investment in
clean technology companies.
3

Paqe 11
12. Confirm that the assets to be acquired from TVF in the merger
are eligible portfolio company securities under Section 2(a)(46) of the
1940 Act.
13. With respect to the merger, it is unclear if there is an entity
designated as the accounting successor as well as the successor for
purposes of the presentation of prior performance information, in
accordance with the guidance provided by the staff of the Commission
in North American Security Trust (pub. avaiL. August 5, 1994). Please
provide this information (and the basis therefore) in your response
letter. Please also explain what financial statements will be included in
the Fund's registration statement at effectiveness. See page 66.
Paqe 12
14. On page 13, the Fund states that its investment adviser will be
paid a fee of 2.00% of gross assets. The second paragraph on page
12 states that until the Fund invests the cash portion of the merger
proceeds in twelve to eighteen months, it will generally invest in
Government securities and other short-term high quality investments.
Returns for these proposed investments are such that, in conjunction
with even the base management fee and other Fund expenses, the
Fund may likely lose money until it becomes fully invested. Please
revise the disclosure accordingly.
Paqe 13
15. Please disclose the pricing methodology for reinvestments under
the dividend reinvestment plan.
16. The second paragraph states that the Fund's investment adviser
will be paid a base fee of 2.00% of gross assets and an incentive fee.
Disclose that the incentive fee structure of the Fund and the
calculation of the base management fee on gross assets give the
Fund's investment adviser an incentive to leverage the Fund when it
may be unwise to do so, or an incentive to not deleverage the Fund
when it would otherwise be appropriate to do so.
Paqe 14
17. Delete the word "may" in the fourth sentence in the penultimate
paragraph.
4

Paqe 15
18. Relocate the parenthetical "( estimated)" to the "Other Expenses"
line in the fee table.
19. Since the body of the fee table presents the base management
fee as 2.00% of net assets attributable to common stock and footnote
(4) generally references the management fee as a percentage of gross
assets, please include unequivocal disclosure that the Fund will not
leverage during the coming year. If the Fund will leverage, please
disclose the leverage limits and revise the fee table accordingly.
Please explain how the calculation is made to present the management
fee as a percentage of net assets attributable to common stock.
Please include some discussion of leverage and disclose that debt and
preferred shares are not allocated expenses, such as advisory fees.
Disclose that all estimated leverage costs (including interest and any
dividends on preferred shares) the Fund will incur during the coming
year are included in the fee table.
20. We believe that the Example should present the five percent
return required by Form N-2 as if it results entirely from net realized
capital gains (making the entire 5% return subject to the 20% capital
gains incentive fee). The Fund's incentive fees are material and we
believe it is unreasonable to simply ignore such fees. Please expand
the disclosure and complete the Example accordingly.
Paqe 17
21. Substitute the word "no" for the word "limited" in the third
highlighted risk statement, or describe the limited experience the
investment adviser has in managing a BDC.
Paqe 19
22. The illquid investments to be acquired by the Fund will be
acquired and carried at fair value in accordance with Section 2(a)(41)
of the 1940 Act. TVF has also carried the illiquid securities at fair
value in accordance with Section 2(a)(41), and TVF has apparently,
since the 4th quarter of 2007 continuously had in excess of 15% of its
net assets in these illiquid securities. Please include the disclosure
from page 16 of the N-14 proxy/prospectus with respect to the
illiquidity of these assets and the inability of TYF to sell the assets at
the carrying value. Expand the disclosure with regard to the
5

circumstances surrounding the failure of the auction. Over an
extended period, the inab)lity of TVF to sell the illiquid assets at the
approximate carrying value is material information for shareholders
and potential shareholders. A reasonably prudent investor might
conclude that when TVF could not sell the assets at their carrying
values, the carrying values are questionable. Please revise the
disclosure and describe this unique risk.
23. Please disclose that the Fund's fair value policies are in writing.
Since the Fund discusses follow-on investments in portfolio
companies on page 22 that mayor may not actually be made, ensure
that the Fund's written fair value policies fully address this issue in
accordance with Section 2(a)( 41) of the 1940 Act.
Paqe 23
24. Since the fee table does not disclose any "Acquired Fund Fees
and Expenses", revise the disclosure in the first sentence of the third
full paragraph to state that the Fund will not make such investments
during the coming year, or revise the fee table accordingly. This
comment also applies to the first full paragraph on page 62.
25. Please explain supplementally why foreign securities pose
significant risks for the Fund's shareholders.
Paqe 25
26. In light of the dilution disclosure and the omitted financial
statements, will the Fund have a negative NAV at the time of the
merger? If so, please provide cover page disclosure.
Paqe 27
27. Please explain supplementally the second bullet point in the
context of a BDC with respect to sales and repurchases of its common
stock.
28. In the third bullet the N-14 discloses that due diligence review
fees are payable to third parties. Are these parties independent of the
investment adviser and its affiliates? Do these services require a
Section 15 contract? Are these services a performance obligation of
the Fund's investment adviser under its Section 15 contract with the
Fund? If so, will the Fund's investment adviser bear this expense,
without reimbursement from the Fund? Please revise the disclosure as
6

needed. This comment also applies to the third bullet point on page
45.
Päqe 33
29. Disclose that SiVest has never managed a BDC and that SiVest. ,
has only managed an investment company since August 3, 2009.
Paqe 34
30. The charts on pages 8 and 34 appear to be identical. Please
rectify the apparent redundancy. In addition, charts or graphs should
not precede the fee table.
Paqe 37
31. Provide portfolio company specific summaries with respect to the
positions the Fund will hold after the merger.
Paqe 38
32. Please explain how the illiquid portfolio securities that the Fund
will acquire in the merger will meet the "viable exit strategy"
requirements discussed on this page. If these securities present a
viable exit strategy for the Fund, so state, and provide an appropriate
explanation. If these securities do not provide a viable exit strategy,
please expand the disclosure accordingly. See comments 22 and 34.
Paqe 41
33. The Fund's address was omitted, although there was an address
on the facing page of the filing. Has the investment adviser changed
locations? Revise the disclosure accordingly.
34. The Fund appears to have but a single interested director at this
time. A merger requires both the target fund's and the acquiring
fund's board of directors to determine that the proposed merger is in
the best interests of their respective shareholders. It appears that this
decision has already been made for the Fund, but without the input of
a properly constituted board of directors under Section 56(a) of the
1940 Act. How will the disinterested Board members address the
valuation question outlined in comment 22? It appears that TVF was
unable to sell the illiquid securities at their carrying value for a
prolonged period. In light of that, why would the Fund be willing to
7

acquire such securities at TVF's carrying value in the Merger? Please
explain.
Paqe 44
35. This section illustrates the calculation of the incentive fees. We
suggest that the Fund provide similar examples in its periodic reports
to shareholders to show the calculation of the incentive fee actually
paid for the period.
Paqe 46
36. Please explain supplementally why the BDC Board of Directors
considered portfolio transactions and the provision of brokerage and
research services to the investment adviser. There would seem to be
little use of these services in the Fund's format, especially in respect of
the first sentence of the first full paragraph on page 62.
37. Expand the disclosure to explain the consideration given to
potential economies of scale in approving the investment advisory
contract.
Paqe 59
38. Under the caption "Approval of Extraordinary Corporate Action;
Amendment of Charter and Bylaws" the Fund generally states that
making its common stock a redeemable security and any proposal for
liquidation or dissolution requires the approval of the stockholders
entitled to cast at least 80% of the votes entitled to be cast on such
matter. Please explain why Section 13(a)(1)1 of the 1940 Act and the
vote required thereunder may be different from the shareholder vote
defined in Section 2(a)(42) of the 1940 Act.
General
39. Please inform us whether the officers, directors, and beneficial
owners of more than 10% of the Fund's securities have filed or will file
the oWhership reports (Forms 3, 4, and 5) required by Section 16(a) of
the Securities Exchange Act of 1934.
i We note that Section l1(b) of the 1940 Act used the term "at least" while Section l3Ca) does
not.
8

40. We note that material portions of the filing are incomplete and
that most exhibits and the financial statements are omitted. We may
have additional comments on such por:tions when you complete them
in a pre-effective amendment, on disclosures made in response to this
letter, on information supplied supplementally, or on exhibits added in
any pre-effective amendments.
41. Section 17(a)2 of the 1940 Act would appear to apply to the
merger. It appears that you believ