FORM 10-Q  SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended September 30, 2008  [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from ___________ to ______________  Commission file number 814-00640  Venture Lending & Leasing IV, Inc. (Exact Name of Registrant as specified in its charter) Maryland20-0372373(State or other jurisdiction of incorporation or  organization)(I.R.S. Employer Identification No.)    2010 North First Street, Suite 310San Jose, CA 95131(Address of principal executive offices)(Zip Code)   (408) 436-8577 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx   No  ̈ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer”, “accelerated filer”, and ‘smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ̈ Accelerated filer  ̈Non-accelerated filer   x        Smaller reporting company ̈ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ̈   No x APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.Yes ̈   No  ̈ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Class Outstanding as of November 13, 2008 Common Stock, $.001 par value 100,000  VENTURE LENDING & LEASING IV, INC.  INDEX  PART I -- FINANCIAL INFORMATION  Item 1. Financial Statements  Condensed Statements of Assets and Liabilities (Unaudited) As of September 30, 2008 and December 31, 2007  Condensed Statements of Operations (Unaudited) For the three and nine months ended September 30, 2008 and 2007  Condensed Statements of Changes in Net Assets (Unaudited) For the three and nine months ended September 30, 2008 and 2007  Condensed Statements of Cash Flows (Unaudited) For the nine months ended September 30, 2008 and 2007  Notes to Condensed Financial Statements (Unaudited)  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations  Item 3. Quantitative & Qualitative Disclosures About Market Risk  Item 4. Controls and Procedures  Item 4T. Controls and Procedures  PART II -- OTHER INFORMATION Item 1. Legal Proceedings  Item 1A. Risk Factors  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds  Item 3. Defaults Upon Senior Securities  Item 4. Submission of Matters to a Vote of Security Holders  Item 5. Other Information  Item 6. Exhibits  SIGNATURES  2


VENTURE LENDING & LEASING IV, INC.  CONDENSED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) AS OF SEPTEMBER 30, 2008 AND DECEMBER 31, 2007  September 30, 2008December 31, 2007ASSETSLoans, at estimated fair value(Cost of $291,580,148 and $372,258,424)$282,293,063$369,857,127Cash and cash equivalents46,486,32514,671,135Other assets4,573,8245,222,139Total assets333,353,212389,750,401LIABILITIESBorrowings under debt facility115,015,512156,015,512Accrued management fees2,070,9582,430,130Accounts payable and other accrued liabilities1,315,7732,449,253Total liabilities118,402,243160,894,895Net assets$214,950,969$228,855,506Analysis of Net Assets:Capital paid in on shares of capital stock$245,025,000$242,525,000Return of capital distributions(15,629,686)(13,629,686)Accumulated deficit(14,444,345)(39,808)Net assets (equivalent to $2,149.50 and $2,288.56 per sharebased on 100,000 shares of capital stock outstanding -See Note 5$214,950,969$228,855,506     See Notes to Condensed Financial Statements


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VENTURE LENDING & LEASING IV, INC.  CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007  For the Three Months EndedFor the Three Months EndedFor the Nine Months EndedFor the Nine Months EndedSeptember 30, 2008September 30, 2007September 30, 2008September 30, 2007INVESTMENT INCOME:Interest on loans$11,337,514$13,484,226$35,355,561$42,902,568Other interest and other income162,026364,482549,0361,804,365Total investment income11,499,54013,848,70835,904,59744,706,933EXPENSES:Management fees2,083,4582,586,9956,448,4398,141,920Interest expense1,951,6372,859,3505,840,3298,779,254Banking and professional fees469,588488,7351,674,6201,399,896Other operating expenses22,05556,948116,094117,814Total expenses4,526,7385,992,02814,079,48218,438,884Net investment income6,972,8027,856,68021,825,11526,268,049Net realized loss from investmenttransactions(1,592,526)(2,409,890)(1,852,796)(5,277,987)Net Realized and unrealized gain(loss) from hedging activities49,231(848,101)(215,775)(760,461)Net change in unrealized gain (loss)from investment  activities(225,877)2,017,920(6,885,788)1,278,704Net realized and unrealized lossfrom investment and hedgingactivities(1,769,172)(1,240,071)(8,954,359)(4,759,744)Net increase in net assetsresulting from operations$5,203,630$6,616,609$12,870,756$21,508,305Net increase in net assetsresulting from operations per share$52.04$66.17$128.71$215.08Weighted average sharesoutstanding100,000100,000100,000100,000     See Notes to Condensed Financial Statements


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VENTURE  LENDING & LEASING IV, INC.  CONDENSED STATEMENTS OF CHANGES IN NET ASSETS  (UNAUDITED) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007   For the ThreeFor the ThreeFor the NineFor the NineMonths EndedMonths EndedMonths EndedMonths EndedSeptember 30, 2008September 30, 2007September 30, 2008September 30, 2007Increase in net assets from operationsNet investment income$6,972,802$7,856,680$21,825,115$26,268,049Net realized loss from investmenttransactions(1,592,526)(2,409,890)(1,852,796)(5,277,987)Net realized and unrealized gain (loss) fromhedging activities49,231(848,101)(215,775)(760,461)Net change in unrealized gain (loss) fromInvestments activities(225,877)2,017,920(6,885,788)1,278,704Net increase in net assets resultingfrom operations5,203,6306,616,60912,870,75621,508,305Distributions of income toshareholder(4,781,249)(8,629,161)(27,275,293)(23,755,180)Return of capital toshareholder--(2,000,000)(6,000,000)Capital share transactions--2,500,0004,000,000Total increase (decrease)422,381(2,012,552)(13,904,537)(4,246,875)Net assetsBeginning of period214,528,588235,914,152228,855,506238,148,475End of period$214,950,969$233,901,600$214,950,969$233,901,600    See Notes to Condensed Financial Statements


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VENTURE LENDING & LEASING IV, INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007  For the Nine Months Ended September 30, 2008For the Nine Months Ended September 30, 2007CASH FLOWS FROM OPERATING ACTIVITIES:Net increase in net assets resulting from operations$12,870,756$21,508,305Adjustments to reconcile net increase in net assets to netcash provided by operating activities:Net realized loss from investment transactions1,852,7965,277,987Net change in unrealized loss (gain)from investment and hedging activities6,413,042(518,243)Amortization of deferred costs related to borrowing facility281,684180,940Net decrease in other assets672,485810,338Net decrease in accounts payable, accrued liabilities,and accrued management fees(1,019,906)(1,033,437)Origination of loans(92,994,971)(154,115,062)Principal payments on loans171,510,311179,086,427Acquisition of equity securities(6,265,153)(3,984,772)Net cash provided by operating activities93,321,04447,212,483CASH FLOWS FROM FINANCING ACTIVITIES:Distributions to shareholder(22,700,000)(26,100,000)Borrowings under debt facility5,000,00020,400,000Repayments of debt facility(46,000,000)(49,000,000)Payment of bank facility fees and costs(305,854)(11,852)Contributions from shareholder2,500,0004,000,000Net cash used in financing activities(61,505,854)(50,711,852)Net increase (decrease) in cash and cash equivalents31,815,190(3,499,369)CASH AND CASH EQUIVALENTS:Beginning of period14,671,13520,536,280End of period$46,486,325$17,036,911SUPPLEMENTAL DISCLOSURES:CASH PAID DURING THE PERIOD FOR:Interest$6,070,576$8,821,434NON-CASH ACTIVITIES:Receipt of equity securities as repayment of loan$310,140$329,591Distributions of equity securities to shareholder$6,575,293$3,655,181 See Notes to Condensed Financial Statements


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VENTURE LENDING & LEASING IV, INC.  NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)  1. ORGANIZATION AND OPERATIONS OF THE FUND Venture Lending & Leasing IV, Inc., (the Fund), was incorporated in Maryland on October 31, 2003 as a nondiversified closed-end management investment company electing status as a business development company (BDC) under the Investment Company Act of 1940 and is managed by Westech Investment Advisors, Inc. (Manager or Management).  One hundred percent of the stock of the Fund is held by Venture Lending & Leasing IV, LLC (the Company).  Prior to commencing its operations on May 28, 2004, the Fund had no operations other than the sale to the Company of 100,000 shares of common stock, $0.001 par value for $25,000 in November 2003.  This issuance of stock was a requirement in order to apply for a finance lender's license from the California Commissioner of Corporations.  In the Manager's opinion, the accompanying financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of financial position and results of operations for interim periods.  Certain information and note disclosures normally included in audited annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted; however, the Fund believes that the disclosures made are adequate to make the information presented not misleading.  The interim results for the three and nine months ended September 30, 2008 are not necessarily indicative of what the results would be for a full year.  It is suggested that these financial statements be read in conjunction with the financial statements and the notes included in the Funds Annual Report on Form 10-K for the year ended December 31, 2007.  Certain amounts in the prior period financial statements have been reclassified to conform to the current financial statement presentation.  These reclassifications had no impact on previously reported net increase in net assets resulting from operation or net assets.  2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interest Income Interest income on loans is recognized using the effective-interest method including amounts from the amortization of discounts resulting from the allocation of amounts ascribed to equity securities received as part of the loan transaction.  Additionally, fees received as part of the transaction are added to the loan discount and amortized over the life of the loan.  Valuation Procedures  The Fund accounts for loans at fair value in accordance with the Valuation Methods below.  All valuations are determined under the direction of the Manager, in accordance with this Policy.  The Funds loans are valued in connection with the issuance of its periodic financial statements, the issuance or repurchase of the Funds shares at a price equivalent to the current net asset value per share, and at such other times as required by law.  On a quarterly basis, Management will submit to the Board of Directors (Board) a Valuation Report, which details the rationale for the valuation of investments.  Valuation Methods At September 30, 2008 and December 31, 2007, the financial statements include nonmarketable investments ($282,293,063 and $369,857,127 or approximately 85% and 95% of total assets, respectively), with fair values


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determined by the Manager in the absence of readily determinable market values.  Because of the inherent uncertainty of these valuations, estimated fair values of such investments may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material.  Below is the information used by the Manager in making these estimates. Venture loans are generally held to maturity as there is no secondary market for the loans and are recorded at estimated fair value.  Management determines whether to adjust the estimated fair value of a loan based on a credit analysis of the borrower, which generally includes consideration of several factors, including but not limited to the borrowers payment history, available cash and burn rate, revenues, net income or loss, the likelihood that the borrower will be able to secure additional financing in the future, as well as an evaluation of the general interest rate environment.  The amount of any valuation adjustment is determined based upon an analysis of the expected recovery from the borrower, including consideration of factors such as the nature and quality of the Funds security interests in collateral, the estimated value of the Funds collateral, the size of the loan, and the estimated time that will elapse before the Fund achieves a recovery. Money market funds and debt instruments held as Cash and Cash Equivalents are valued at their most recently posted net asset value, if available, or at amortized cost, provided such amount is not materially different from quoted price. Debt securities held as Short-term Investments are valued based on current bid quotations of recognized dealers or, when market quotations are not readily available, based on appraisals received from a pricing service using a computerized matrix system, or based upon appraisals derived from information concerning the securities or similar securities received from recognized dealers in the securities.  Notwithstanding the foregoing, debt securities with remaining maturities of ninety (90) days or fewer generally are valued by amortizing the difference between their last available fair value and their par value, provided such amount is not materially different from quoted price.  As of September 30, 2008 and December 31, 2007, the Fund held no short-term investments. Warrants and Stock Warrants and stock that are received in connection with loan transactions generally will be assigned a fair value at the time of acquisition.  These securities are then distributed by the Fund to the Company at the assigned value.  Warrants are valued based on a Black-Scholes option pricing model which takes into account underlying stock value, expected term, volatility, risk-free interest rate, among other factors.  Warrants are typically distributed immediately upon receipt to the Company. Nonaccrual Loans The Funds policy is to place a loan on nonaccrual status when the loan stops performing and management deems that it is unlikely that the loan will return to performing status.  When a loan is placed on nonaccrual status, all interest previously accrued but not collected is reversed for the quarter in which the loan was placed on nonaccrual status.  Any uncollected interest related to quarters prior to when the loan was placed on nonaccrual status is added to the principal balance, and the aggregate balance of the principal and interest is evaluated in accordance with the policy for valuation of loans. As of September 30, 2008 and December 31, 2007, loans with a cost basis of $18.3 million and $4.1 million and a fair value of $10.8 million and $1.7 million, respectively, have been classified as nonaccrual. Commitment Fees Unearned income and commitment fees on loans are recognized using the effective-interest method over the term of the loan.  Commitment fees are carried as liabilities when received for commitments upon which no draws have been made.  When the first draw is made, the fee is treated as unearned income and is recognized as described above.  If a draw is never made, the commitment fee less any applicable legal costs becomes recognized as other income after the commitment expires.


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Interest Rate Swap Agreements The Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133), as amended by SFAS No. 138, establishes accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value.  For investment companies such as the Fund, SFAS 133 requires that changes in the derivatives fair value be recognized currently in earnings. The Fund enters into interest rate swap transactions to hedge its interest rate on its borrowings under its debt facility. Unrealized gains and losses from hedging activities are separately reported from unrealized gains and losses from investment activities and are included in realized and unrealized gain (loss) from hedging activities in these financial statements.  Also included in realized and unrealized gain (loss) from hedging activities is the net interest received or paid on the interest rate swap transactions beginning with the quarter ended September 30, 2008 (amounts were previously included in interest expense and were not considered material). The fair value of the interest rate swap is recorded in other assets or other liabilities and the change in the fair value is recorded as a change in unrealized gain (loss) from investment and hedging activities. Recently Issued Accounting Pronouncements In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157), which is effective for fiscal years beginning January 1, 2008.  This statement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.  SFAS 157 does not require any new fair value measurements.  The Fund has adopted SFAS 157 as of January 1, 2008, and has provided additional disclosure in footnote 3 related to this standard.  In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an amendment of FASB Statement No. 115 (SFAS 159).  SFAS 159 permits companies to choose to measure at fair value many financial instruments and certain other items that are not currently required to be measured at fair value.  Entities choosing the fair value option would be required to recognize subsequent changes in the fair value of those instruments and other items directly in earnings.  This standard also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities.  SFAS 159 is effective beginning the first fiscal year that begins after November 15, 2007.  The Fund has adopted SFAS 159 as of January 1, 2008.  However, the Fund has not elected the fair value option for any eligible items. In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of SFAS 133 (SFAS 161).  SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entitys financial position, financial performance, and cash flows.  It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.  This statement becomes effective for the Fund in the first quarter of 2009.  The Fund does not expect that the adoption of this statement will have a material effect on its financial statements.  In October 2008, the FASB issued FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active (SFAS 157-3). The FSP provides guidance clarifying how SFAS No. 157 should be applied when valuing securities in markets that are not active. The guidance states that significant judgment is required in valuing financial assets and clarifies how managements internal assumptions should be considered when relevant observable data does not exist, how observable market information in a market that is not active should be considered when measuring fair value, and how the use of market quotes should be considered when assessing the relevance of observable and unobservable data available to measure fair value. The FSP is effective upon issuance and includes financial statements for the period ending and as of September 30, 2008.  The Fund does not expect its adoption of SFAS 157-3 to have a material impact on its financial position, results of


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operation, or cash flows. In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" (SFAS 162). The Statement identifies the sources of accounting principles and establishes a hierarchy for selecting those principles to prepare financial statements in accordance with U.S. GAAP. The Statement is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board (PCAOB) amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles."  The Fund is currently evaluating the impact of SFAS 162, but does not expect the adoption of the pronouncement will have a material impact on its financial position, results of operation, or cash flows.  Tax Status As long as the Fund qualifies as a Regulated Investment Company (RIC), it will not pay any federal or state corporate income tax on income that is distributed to its shareholder (pass-through status).  Should the Fund not qualify as a RIC or lose its qualification as a RIC, it could be taxed as an ordinary corporation on its taxable income for that year (even if that income is distributed to its shareholder), and all distributions out of its earnings and profits will be taxable to its shareholder as ordinary income. As of September 30, 2008, the Fund had no uncertain tax positions. 3. SUMMARY OF INVESTMENTS Loans generally are made to borrowers pursuant to commitments whereby the Fund agrees to finance assets and provide working capital up to a specified amount for the term of the commitments, upon the terms and subject to the conditions specified by such commitment.  As of September 30, 2008, the Fund's investments in loans are primarily to companies based within the United States and are diversified among borrowers in the industries shown below.  The percentage of net assets that each industry group represents is shown with the industry totals below.  (The sum of the percentages does not equal 100 percent because the percentages are based on net assets as opposed to total loans).  Loan balances are summarized by borrower.  Typically a borrower's balance will be composed of several loans drawn under a commitment made by the Fund with the interest rate on each loan fixed at the time each loan is funded.  Each loan drawn under a commitment has a different maturity date and amount.  For the three month period ended September 30, 2008 and 2007, the weighted average interest rate on performing loans was 15.43% and 13.49%, respectively.  For the nine month period ended September 30, 2008 and 2007, the weighted average interest rate on performing loans was 14.69% and 13.85%, respectively.  Interest is calculated using the effective interest method, and rates earned by the Fund will fluctuate based on many factors including volatility, early payoffs, and recovery of interest from non-performing assets.    Loans as of September 30, 2008 are in non-affiliates and consist of the following:  Percentage ofEstimated FairPar ValueFinalBorrowerNet AssetsValue 9/30/089/30/08Maturity DateBiotechnologyAcumen Pharmaceuticals$438,155$438,1558/1/10Bioabsorbable Therapeutics1,031,9831,031,9836/1/11Lightspeed Genomics296,543296,5436/1/11ProMetic4,527,7224,527,7228/1/09SanBio2,077,7672,077,76710/1/10Trellis Bioscience648,705648,70512/1/10


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Subtotal:4.2%$9,020,875$9,020,875Carrier NetworkingActelis$566,289$566,28912/1/08Asoka USA Corporation756,698756,6981/1/11Ellacoya Networks2,166,5802,166,58012/1/09Kodiak Networks825,226825,2264/1/10OpVista3,444,0133,444,0136/1/10Overture Networks1,773,5391,773,5392/1/10Wavebender386,856386,8569/1/10Subtotal:4.6%$9,919,201$9,919,201Computers & StorageCloudShield$2,162,611$2,162,6114/1/11D-Wave Systems277,119277,1197/1/10Gear Six, Inc.676,533676,5337/1/10Ncomputing1,012,1981,012,1989/1/10Panta Systems118,693808,693*Sanrad467,424467,42412/1/08Sepaton2,240,8672,240,86710/1/09Teneros1,221,2481,221,24810/1/09Vidyo2,503,4112,503,41110/1/10Subtotal:5.0%$10,680,104$11,370,104Enterprise NetworkingBlueSocket$862,026$862,02612/1/09Envivio3,618,5863,618,5861/1/11GridNetworks983,400983,4006/1/11Informative420,180420,1807/1/09NeoPath Networks1,774,0271,774,02711/1/09PacketMotion1,404,9001,404,9003/1/11Vyatta1,370,0001,370,0002/1/11Subtotal:4.9%$10,433,119$10,433,119InternetAggregate Knowledge$1,025,795$1,025,7957/1/11Blekko334,937334,9379/1/11BuzzLogic979,147979,1478/1/11Collarity998,300998,3005/1/11Cuil3,038,9573,038,9579/1/12Delve Networks478,408478,4087/1/11Digital Railroad312,082912,08212/1/09Donnerwood Media630,718630,7185/1/11EForce Media694,5591,444,55912/1/10


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FaceBook81,44181,44111/1/08Flock701,538701,5385/1/10Genius878,449878,4498/1/10Goodmail Systems489,004489,0042/1/09iGroup Network140,896140,8968/1/10Inigral95,56595,5655/1/11Insider Guides1,543,2841,543,2844/1/11Koders268,599268,5995/1/11Like.com1,928,2531,928,2537/1/11Loomia231,481231,4818/1/11Monitor1105,315183,315*Multiply925,783925,7839/1/11NetBase Solutions [Accelovation]818,014818,0143/1/11Philotic181,361181,3617/1/11Popjax439,481439,48112/1/10ProQuo [Skoop Heavy Industries]836,519836,5196/1/10QuantCast1,408,3931,408,3936/1/11Radar Networks810,765810,76510/1/10Return Path Holdings2,041,6512,041,65112/1/10RPM Communications531,597531,59712/1/10Sharpcast3,502,7533,502,7535/1/11SnapJot112,709112,70910/1/08TheFind1,123,8741,123,8747/1/11ThisNext770,157770,1575/1/11Tribe0465,007*ultraRPM1,676,3961,676,39611/1/10UrthTV124,174492,174*uStream.TV186,409186,40910/1/10Vast.com45,20545,20512/1/08VetCentric1,658,8901,658,89010/1/11YOUKU.COM3,955,7723,955,7729/1/11Subtotal:16.8%$36,006,631$38,367,638Medical DevicesAccuri Cytometers$809,978$809,9789/1/10AirXpanders513,645513,6459/1/11Ample Medical199,323199,32312/1/10Aspire Medical1,649,7631,649,76312/1/09Biomerix1,320,5191,320,5195/1/11Broncus Technologies2,821,2302,821,2307/1/11CyberHeart1,440,1341,440,1348/1/11Emphasys Medical6,452,4276,452,4271/1/11EnteroMedics3,796,3863,796,3868/1/10Evalve3,550,1523,550,1528/1/09


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Evera Medical711,429711,4293/1/11HandyLab2,107,3872,107,38712/1/10iBalance Medical1,456,4361,456,4369/1/10Intellidx1,918,7791,918,7794/1/11Myocor4,488,5664,888,5662/1/10Myoscience1,176,2001,176,2006/1/11Nellix481,516481,5167/1/11NeoGuide Systems1,885,8351,885,8357/1/10Oculus Innovative Sciences1,003,2191,003,2194/1/09Percutaneous Systems435,290435,2909/1/09Softscope Medical Technologies216,925216,92512/1/10Varix Medical288,316288,3164/1/11VasoNova294,050294,0506/1/11Subtotal:18.2%$39,017,505$39,417,505Other HealthcareAdvanced ICU Care$291,081$291,08110/1/10Chakshu Research2,575,5142,575,51412/1/09MedManage Systems365,409365,4098/1/10Nanosphere4,510,5354,510,5358/1/10Pharmacy TV Network0336,005*Skylight Healthcare Systems3,838,2613,838,2617/1/11Subtotal:5.4%$11,580,800$11,916,805Other TechnologyEoPlex$95,378$95,3788/1/10Integrity Block112,514112,5149/1/11Nanoconduction2,037,3552,037,355*NanoGram1,702,1301,702,13012/1/10Nanosolar682,593682,5935/1/10Nanostellar725,574725,5747/1/09ORYXE Energy International1,002,6801,002,6805/1/10Sezmi Corporation2,719,5822,719,5825/1/11Solaria4,710,8254,710,8253/1/11Sub-One3,509,0543,509,05412/1/11Triformix117,713117,7133/1/09Subtotal:8.1%$17,415,398$17,415,398SecurityApere$238,948$238,9485/1/09CipherOptics1,539,7191,539,7193/1/10Dragnet Solutions982,332982,3326/1/11Guardian Analytics1,034,3981,034,3988/1/11Mi588,70188,7017/1/09


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Nevis Networks499,467499,4678/1/09Safend1,325,6131,325,61312/1/09TrustedID1,923,0541,923,0546/1/11Vericept1,412,0121,412,0126/1/09Voltage Security2,280,7972,280,7976/1/09Xactly242,973242,9736/1/10Subtotal:5.4%$11,568,014$11,568,014Semiconductors & EquipmentAlereon$1,390,601$1,390,6017/1/10Azuro1,821,0971,821,0972/1/10Bitwave Semiconductor569,023569,02312/1/09Celestial Semiconductor660,8661,260,866*Cswitch2,047,3082,047,3086/1/10Discera459,907459,9071/1/11Enigma Semiconductor254,426254,42612/1/08Gigafin Networks972,6692,672,669*InSilica1,467,6141,467,6147/1/10Integrated Materials1,215,6961,215,6966/1/10Intelleflex1,537,4291,537,4294/1/11InvenSense1,200,2441,200,2441/1/11KeyEye Communications525,9693,325,969*Luminescent Technologies1,160,0901,160,0907/1/09Luxtera1,417,0181,417,0181/1/11LV Sensors2,791,0922,791,0926/1/11Netxen1,230,5121,230,51210/1/10RMI Corporation6,999,4286,999,4287/1/10Silicon Optix5,341,8265,341,826*SiPort1,409,9401,409,9407/1/11Teknovus1,625,5761,625,5763/1/10Tela Innovations382,860382,86010/1/10Xilient2,070,4812,070,4813/1/11Subtotal:17.9%$38,551,672$43,651,672Software5SquareSystems$753,939$1,043,939*Anchor Intelligence896,363896,3637/1/11Arena Solutions2,461,5912,461,5911/1/10Athena Design Systems256,004256,004*Berkeley Design Automation1,122,9531,122,9531/1/11BlueRoads2,833,0202,833,0201/1/11Bocada892,574892,57410/1/09Canopy Financial1,677,9501,677,9507/1/11Cloudmark2,464,8452,464,8453/1/11


14


Coghead1,037,5881,037,58810/1/10DemandBase628,504628,50411/1/10Emergent Game Technologies, Inc.387,485387,4857/1/09Enigma Information Retrieval Systems187,279187,27911/1/08Enkata Technologies207,514207,5144/1/10Evincii207,462207,46210/1/10firstRain491,580491,58012/1/08Future Point Systems468,931468,9314/1/11Gizmo5 Technologies1,397,7071,397,70712/1/09Integrien2,633,3852,633,3857/1/10IT Structures199,384199,3849/1/10JasperSoft2,356,4672,356,4675/1/11Kabira Technologies2,204,4472,204,44712/1/10Kareo189,080189,0807/1/10KonaWare0110,072*Market6895,010895,0107/1/10MetaCarta1,339,5061,339,50611/1/09NR2B Research2,416,5212,416,5213/1/11Nusym Technologies183,339183,3394/1/09Orb Networks755,694755,6949/1/10Perquest130,257130,2573/1/09RingCube Technologies1,180,6051,180,6054/1/11Siperian1,923,6621,923,66210/1/09Solidcore Systems1,933,5681,933,56810/1/09SoundFlavor208,468208,4687/1/10Steelwedge1,353,1791,353,1794/1/09Ultriva829,253829,25312/1/09Universal Ad706,848706,84810/1/10Visible World2,535,8492,535,84912/1/10W&W Communications94,06594,06512/1/08Xtime397,309397,3091/1/11Zoove1,540,1641,540,1647/1/11Subtotal:20.6%$44,379,349$44,779,421Technology ServicesFusepoint$473,219$473,21910/1/08Neutral Tandem4,836,6954,836,6953/1/10OpSource5,893,6555,893,6559/1/11SG Micro695,895695,8954/1/11Subtotal:5.5%$11,899,464$11,899,464WirelessAltierre$549,604$549,6044/1/09Cellfire2,378,6092,378,6094/1/11


15


DeFi Mobile340,226340,2262/1/11Digital Bridges1,427,2111,427,21112/1/08Dilithium Networks2,338,8952,338,8956/1/11Emotive Communications663,215663,2151/1/11HandsOn Mobile2,181,6332,181,6335/1/10July Systems537,811537,8115/1/10LimeLife1,340,8091,340,80910/1/09Magnolia Broadband1,540,1731,540,1737/1/09Nextivity2,716,1302,716,1305/1/11OOMA419,739419,7395/1/09Ortiva Wireless1,671,4361,671,4365/1/11Quickoffice1,196,6731,196,6737/1/10S5 Wireless2,220,0392,220,0395/1/10Sandlinks719,886719,8866/1/10ScanR2,141,9762,141,9767/1/11Send Me2,231,2562,231,2569/1/11SmartDrive1,121,5831,121,5836/1/10Venturi Wireless1,056,1311,056,13111/1/10Vivotech1,191,5561,191,5568/1/09Wavion1,129,4101,129,4108/1/09WiSpry706,931706,9314/1/10Subtotal:14.8%$31,820,932$31,820,932Total:131.3%$282,293,063$291,580,148  * As of September 30, 2008 loans with a cost basis of $18.3 million and a fair value of $10.8 million have been classified as nonaccrual.  Loans as of December 31, 2007 are in non-affiliates and consist of the following: Percentage ofEstimated FairPar ValueFinalBorrowerNet AssetsValue 12/31/0712/31/07Maturity DateBiotechnologyAcumen Pharmaceuticals$510,750$510,7508/1/10Athersys1,347,8131,347,8136/1/08ProMetic7,572,9377,572,9378/1/09Raven Biotechnologies960,084960,0846/1/08SanBio1,203,6061,203,60610/1/10Serenex813,248813,2488/1/08Trellis Bioscience897,359897,35912/1/10Subtotal:5.8%$13,305,797$13,305,797Carrier Networking


16


Actelis$1,980,108$1,980,10812/1/08Asoka USA Corporation957,308957,3081/1/11Ellacoya Networks5,567,3315,567,33112/1/09Kasenna1,444,0291,444,0299/1/09Kodiak Networks1,133,1721,133,1724/1/10OnSite Systems254,533254,53312/1/08OpVista4,513,1544,513,1545/1/10Overture Networks2,720,9382,720,9382/1/10Wavebender456,545456,5459/1/10World Wide Packets9,038,6969,038,6961/1/10Subtotal:12.3%$28,065,814$28,065,814Computers & StorageCalista Technologies$529,325$529,3251/14/08CloudShield1,103,4391,103,4391/1/10D-Wave Systems405,924405,9247/1/10Gear Six, Inc.925,081925,0817/1/10Ncomputing1,209,9351,209,9359/1/10Panta Systems463,574923,575*Powerfile697,799697,7996/1/08Sanrad1,366,7381,366,73812/1/08Sepaton3,618,9363,618,93610/1/09Teneros1,879,0621,879,06210/1/09Vidyo1,252,4011,252,40110/1/10Subtotal:5.9%$13,452,214$13,912,215Enterprise NetworkingBlueSocket$1,322,903$1,322,90312/1/09Envivio3,766,9723,766,9721/1/11Informative854,407854,4077/1/09NeoPath Networks2,823,3632,823,36311/1/09NextHop Technologies660,729660,7296/1/08The Retail Equation96,58296,5826/1/08Vyatta708,558708,5582/1/11Subtotal:4.5%$10,233,514$10,233,514InternetAccelovation$1,045,181$1,045,1811/1/11Aggregate Knowledge763,076763,0762/1/11BuzzLogic461,623461,6235/1/11Collarity486,040486,0403/1/11Cuill3,194,6803,194,6802/1/12Digital Railroad1,390,0731,390,0731/1/10Donnerwood Media731,293731,2938/1/10


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EForce Media1,461,1251,461,12512/1/10FaceBook1,161,2231,161,22311/1/08Feedster1,051,3051,051,305*Flock954,423954,4235/1/10Genius1,528,3221,528,3228/1/10Goodmail Systems1,519,0961,519,0962/1/09iGroup Network164,783164,7838/1/10Insider Guides926,996926,9962/1/11Koders345,453345,4532/1/10Kosmix404,803404,8039/1/08Monitor1101,673,5551,673,5551/1/10Philotic146,312146,31210/1/10Plaxo1,123,7211,123,72112/1/10Popjax474,045474,04512/1/10ProQuo [Skoop Heavy Industries]1,219,3311,219,3316/1/10QuantCast176,809176,8093/1/11Radar Networks1,099,7081,099,70810/1/10Return Path3,360,0843,360,08412/1/10Riya2,427,0582,427,0587/1/11ScanScout526,629526,6292/7/08Sharpcast2,934,5612,934,56112/1/10SnapJot112,239112,23910/1/08ThisNext, Inc.442,289442,2896/1/10Tribe-465,007*Turn2,003,0492,003,0491/1/11ultraRPM2,269,1252,269,12511/1/10uStream.TV216,296216,29610/1/10Vast.com155,941155,94112/1/08VetCentric3,726,3393,726,33911/1/09Subtotal:18.2%$41,676,586$42,141,593Medical DevicesAblation Frontiers$511,971$511,9718/1/08Accuri Cytometers980,312980,3129/1/10AirXpanders56,41656,4161/1/11Aspire Medical2,548,9782,548,97812/1/09Emergent Respiratory Products131,692131,6926/1/08Emphasys Medical4,830,5634,830,5631/1/11EnteroMedics6,663,7876,663,7878/1/10Evalve6,348,2256,348,2258/1/09HandyLab2,315,0642,315,06412/1/10iBalance Medical1,870,6901,870,6909/1/10Inogen1,155,0521,155,0527/1/09Myocor6,997,4606,997,4602/1/10


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Myoscience1,426,0251,426,0256/1/11Nellix402,930402,9301/1/11NeoGuide Systems2,427,9272,427,9277/1/10Oculus Innovative Sciences2,208,1712,208,1714/1/09Percutaneous Systems712,663712,6639/1/09Softscope Medical Technologies233,236233,23612/1/10Volcano Corporation64,24864,2482/1/08Subtotal:18.3%$41,885,410$41,885,410Other HealthcareAdvanced ICU Care$365,267$365,26710/1/10Chakshu Research3,932,1893,932,18912/1/09MedManage Systems491,310491,3108/1/10Nanosphere5,450,0195,450,0198/1/10Pharmacy TV Network-336,005*Skylight Healthcare Systems3,664,1103,664,11010/1/10Subtotal:6.1%$13,902,895$14,238,900Other TechnologyBuilding B$1,587,098$1,587,09810/1/10EoPlex170,403170,4038/1/10Nanoconduction2,342,8052,342,8058/1/10NanoGram2,508,0512,508,05112/1/10Nanosolar1,032,0991,032,0995/1/10Nanostellar1,312,1381,312,1387/1/09ORYXE Energy International1,376,6621,376,6625/1/10Sub-One3,787,6253,787,62511/1/10Tag Networks2,563,3312,563,3319/1/09Triformix259,880259,8803/1/09Subtotal:7.4%$16,940,092$16,940,092SecurityApere$441,942$441,9425/1/09Assurz928,005928,0051/1/10BigFix634,087634,0875/1/08CipherOptics2,348,3192,348,3193/1/10Dragnet Solutions140,815140,8154/1/09Guardian Analytics84,56184,5611/1/11Ironkey572,774572,7744/1/10Lancope880,091880,09110/1/08Mi5169,132169,1327/1/09Nevis Networks869,895869,8958/1/09Safend2,170,7412,170,74112/1/09Secure Elements396,777396,77710/1/08


19


SNOCAP4,216,9614,216,9611/1/10TrustedID1,514,2271,514,22711/1/09Vericept2,552,2392,552,2396/1/09Voltage Security4,366,0514,366,0516/1/09Xactly346,551346,5516/1/10Subtotal:9.9%$22,633,168$22,633,168Semiconductors & EquipmentAlereon$1,687,479$1,687,4797/1/10Andigilog749,407749,40712/1/08Aristos Logic4,076,4134,076,4134/1/10Azuro2,620,1372,620,1372/1/10Bitwave Semiconductor863,394863,39412/1/09Celestial Semiconductor1,571,7451,571,7456/1/09Cswitch2,334,7902,334,7906/1/10Discera794,732794,7321/1/11Enigma Semiconductor855,049855,04912/1/08Gigafin Networks3,639,9713,639,9717/1/10InSilica1,440,5521,440,5527/1/10Integrated Materials1,927,7251,927,7256/1/10Intelleflex554,103554,10311/1/08InvenSense1,825,3161,825,31611/1/10KeyEye Communications4,102,9284,102,9283/1/10Luminescent Technologies2,004,2982,004,2987/1/09Luxtera2,201,0662,201,0661/1/11LV Sensors1,238,7221,238,7222/1/11Molecular Imprints43,24843,2481/1/08Montalvo Systems731,380731,3808/1/08Netxen2,570,3442,570,34410/1/10RMI Corporation10,145,90310,145,9037/1/10Silicon Optix4,618,2294,618,2293/1/11Teknovus2,659,2472,659,2473/1/10Tela Innovations241,145241,1457/1/10Xilient1,246,4651,246,46512/1/09Subtotal:24.8%$56,743,788$56,743,788Software5SquareSystems$1,153,716$1,153,7167/1/09Adomo1,130,3771,130,3772/4/08Akimbo Systems758,339758,3392/1/09Arena Solutions3,764,5513,764,5511/1/10Athena Design Systems676,595676,5954/1/10Berkeley Design Automation1,270,3611,270,36112/1/10Blackfoot-290,284*


20


BlueRoads4,030,3984,030,3983/1/10Bocada1,437,7471,437,74710/1/09Canopy Financial500,334500,33411/1/10Cloudmark2,861,9732,861,97310/1/10Coghead707,776707,77610/1/10DemandBase723,801723,80111/1/10Emergent Game Technologies, Inc.662,001662,0017/1/09Enigma Information Retrieval Systems975,697975,69711/1/08Enkata Technologies658,707658,7074/1/10Evincii275,507275,50710/1/10firstRain1,383,7611,383,76112/1/08Fusion Dynamic75,486775,486*Gizmo5 Technologies1,978,9671,978,96711/1/09Integrien3,810,2003,810,2007/1/10IT Structures239,860239,8609/1/10JasperSoft1,461,3581,461,3589/1/09Kabira Technologies1,571,7761,571,77612/1/10Kareo257,129257,1297/1/10KonaWare111,334111,3343/1/08Market61,189,6311,189,6317/1/10MetaCarta2,505,1002,505,10011/1/09Nusym Technologies490,152490,1524/1/09Orb Networks874,476874,4761/1/10Perquest275,169275,1693/1/09Platform Solutions5,957,4385,957,4389/1/09Qlip Media426,764426,7648/1/08Sabrix355,633355,6333/1/08Siperian3,017,0333,017,03310/1/09SOA Software703,210703,2109/1/08Solidcore Systems3,020,1623,020,16210/1/09SoundFlavor381,441381,4417/1/10Steelwedge1,453,4241,453,4244/1/09Ultriva1,224,4581,224,45812/1/09Universal Ad475,791475,7917/1/09Visible World3,671,9383,671,93812/1/10W&W Communications293,650293,65012/1/08Xtime243,375243,3751/1/11Zoove2,014,3052,014,3052/1/10Subtotal:26.7%$61,050,901$62,041,185Technology ServicesFusepoint$1,866,047$1,866,04710/1/08Jacent Technologies84,637234,637*Neutral Tandem8,133,4228,133,4223/1/10


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OpSource4,618,8444,618,8442/1/11Subtotal:6.4%$14,702,950$14,852,950WirelessAeroScout$655,881$655,8816/1/08Altierre1,307,7081,307,7084/1/09Cellfire1,350,8051,350,8053/1/10DeFi Mobile237,323237,32312/1/10Digital Bridges4,388,6544,388,65412/1/08HandsOn Mobile2,988,1392,988,1395/1/10July Systems666,833666,8334/1/10LimeLife2,089,8632,089,86310/1/09Magnolia Broadband2,791,9162,791,9167/1/09Nextivity486,669486,66911/1/09OOMA1,165,9071,165,9075/1/09Pontis880,150880,1506/1/09Quickoffice2,168,9562,168,9567/1/10S5 Wireless3,199,1033,199,1035/1/10Sandlinks981,241981,2416/1/10ScanR1,666,6061,666,6061/1/11SmartDrive1,732,3071,732,3076/1/10Venturi Wireless1,403,0101,403,01011/1/10Vivotech2,066,7522,066,7528/1/09Wavion1,587,8701,587,8703/1/09WiSpry1,448,3051,448,3054/1/10Subtotal:15.4%$35,263,998$35,263,998Total: (Cost of $372,258,424)161.6%$369,857,127$372,258,424  * As of December 31, 2007, loans with a cost basis of $4.1 million and a fair value of $1.7 million have been classified as non-accrual.  These loans have been accelerated from original maturity and are due in their entirety.  The Fund provides asset-based financing primarily to start-up and emerging growth venture-capital-backed companies.  These loans are generally secured by assets of the borrowers.  As a result, the Fund is subject to general credit risk associated with such companies.  At September 30, 2008, the Fund had unexpired unfunded commitments to borrowers of $29.8 million.  Effective January 1, 2008, the Fund adopted SFAS 157, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 defines fair value 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; that is, an exit price. The exit price assumes the asset or liability is exchanged in an orderly transaction; it is not a forced liquidation or distressed sale.  Valuation Hierarchy UnderSFAS 157, the Fund categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Funds valuation techniques. A level is assigned to each fair value


22


measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:  Level 1Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.Level 2Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.Level 3Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.   The Fund uses estimated exit values when determining the value of its investments.  Because these transactions are individually negotiated and unique, and there is no market in which these assets trade, the inputs for these assets, which are discussed in the Valuation Methods listed above, are classified as Level 3.  The Funds derivative was valued using pricing models that are widely accepted in the financial services industry with inputs that can be derived from or corroborated by observable market data.  These models reflect the contractual terms of the derivative, including the period to maturity, and market observable inputs such as yield and option volatility. As a result, these measurements are classified as Level 2.   The following table presents the balances of assets and liabilities measured at fair value on a recurring basis:  Level 2Level 3TotalASSETS:Loans to Borrowers$-$282,293,063$282,293,063Total assets$-$282,293,063$282,293,063LIABILITIES:Interest rate swap agreement$713,092$-$713,092Total liabilities$713,092$-$713,092 No assets or liabilities which are measured at fair value on a recurring basis are classified as Level 1. The fair value of the interest rate swap agreement as of September 30, 2008 and December 31, 2007 was ($713,092) and ($1,185,838), respectively and is included in other accrued liabilities.


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The following table provides a summary of changes in Level 3 assets and liabilities measured at fair value on a recurring basis:  LEVEL 3 INPUTSFor the Three Months EndedFor the Nine Months EndedSeptember 30, 2008September 30, 2008Loans to BorrowersBeginning balance$320,100,618$369,857,127Additional acquisitions19,268,58592,994,971Principal reductions(55,257,737)(171,820,451)Change in unrealized loss(225,877)(6,885,788)Net realized loss from investment transactions(1,592,526)(1,852,796)Balance September 30, 2008$282,293,063$282,293,063   4. EARNINGS PER SHARE Basic earnings per share are computed by dividing net increase in net assets resulting from operations by the weighted average common shares outstanding.  Diluted earnings per share are computed by dividing net increase in net assets resulting from operations by the weighted average common shares outstanding, including the dilutive effects of potential common shares (e.g., stock options).  The Fund has no instruments that would be potential common shares; thus, reported basic and diluted earnings per share are the same. 5. CAPITAL STOCK As of September 30, 2008 and December 31, 2007, there were 10,000,000 shares of $0.001 par value common stock authorized, and 100,000 shares issued and outstanding.  Total committed capital of the Company is $250.0 million.  Total contributed capital to the Company through September 30, 2008 and December 31, 2007 was $250.0 million, of which $245.0 million and $242.5 million, respectively, was contributed to the Fund. The chart below shows the distributions of the Fund for the nine months ended September 30, 2008 and 2007. For the Nine Months EndedFor the Nine Months EndedSeptember 30, 2008September 30, 2007Cash distributions$22,700,000$26,100,000Distributions of securities6,575,2933,655,181Total distributions to shareholder$29,275,293$29,755,181  During the quarter, the Fund made distributions as noted in the table above.  These distributions have been presented as distributions of income.  However, the final classification of the distributions as either a return of capital or a distribution of income is an annual determination made at the end of each year dependent upon the Funds current year and cumulative earnings and profits.


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6. DEBT FACILITY During the quarter, the Fund reduced the size of its debt facility to finance the acquisition of asset-based loans from $230.0 million to $138.0 million.  As of September 30, 2008, the Fund had $115.0 million of outstanding loans under this facility.  The interest rate on this facility is usually the Commercial Paper Rate plus 3.00 percent, which on September 30, 2008, was 5.72 percent per year. The facility was set to renew on October 14, 2008.  However, on May 28, 2008, the Fund reached its 4th year anniversary, and as scheduled per its registration statement, stopped making new commitments to borrowers.  Because the Fund pays a fee on the unused portion of the facility and it no longer needs a facility of this size to fund its remaining commitments, it elected to renew its facility early, decrease its size, increase its pricing and shorten the revolving period of the facility by four months. As part of this renewal, the Fund paid a renewal fee of $0.3 million to Société Générale, who assumed the entire facility.  Also, in light of the downgrade of Ambac Assurance Corporation from an Aaa to an "Aa3" rating, Société Générale has reduced the required credit rating for the facility's insurer from Aa2 to Aa3.  Additionally, as part of this renewal, the program termination date has been modified from May 2009 to January 2009 and the maturity date has been modified to November 2009.  The Manager believes the change of the termination date, maturity date, and the increased pricing are not expected to have a material impact on the operations of the Fund. Subsequent to quarter end, On November 5, 2008, Moodys lowered Ambacs financial strength rating to Baa1 from Aa3.  This rating downgrade constitutes a specified event of default under the loan agreement.  The Program Agent has increased the interest rate on the loans to Prime plus 400 basis points, but other than the increase in pricing has not taken any action in response to the downgrade. If it takes other action, there is no guarantee that the Fund will be able to renegotiate the facility with the Program Agent on acceptable terms, or be able to secure acceptable alternative financing arrangements.  The Program Agent could, as a result of the rating downgrade, require the Fund to repay its loan more quickly than if the rating downgrade to Ambac had not taken place.  7. FINANCIAL HIGHLIGHTS  Accounting principles generally accepted in the United States of America require disclosure of financial highlights of the Fund for the periods presented, the three and nine months ended September 30, 2008 and 2007.  The total rate of return is defined as the return based on the change in value during the period of a theoretical investment made at the beginning of the period.  The total rate of return assumes a constant rate of return for the Fund during the period reported and weights each cash flow by the amount of time held in the Fund.  This required methodology differs from an internal rate of return. The ratios of expenses and net investment income to average net assets, calculated below, are annualized and are computed based upon the aggregate weighted average net assets of the Fund for the periods presented.  Net investment income is inclusive of all investment income net of expenses, and excludes realized or unrealized gains and losses. Beginning and ending net asset values per share are based on the beginning and ending number of shares outstanding.  Other per share information is calculated based upon the aggregate weighted average net assets of the Fund for the periods presented.


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The following per share data and ratios have been derived from the information provided in the financial statements: For the Three Months Ended September 30, 2008For the Three Months Ended September 30, 2007For the Nine Months Ended September 30, 2008For the Nine Months Ended September 30, 2007Total return*9.70%11.38%8.04%12.66%Per share amounts:Net asset value, beginning of period$2,145.29$2,359.14$2,288.56$2,381.48Net investment income69.7378.57218.25262.68Net change in realized and unrealized lossfrom investment and hedging activities(17.70)(12.40)(89.55)(47.59)Net increase in net assetsresulting from operations52.0366.17128.70215.09Capital contributions--25.0040.00Income distributions to shareholder(47.81)(86.29)(292.75)(237.55)Return of capital to shareholder---(60.00)Net asset value, end of period$2,149.51$2,339.02$2,149.51$2,339.02Net assets, end of period$214,950,969$233,901,600$214,950,969$233,901,600Ratios to average net assets:Expenses*8.44%10.01%8.59%10.44%Net investment income *13.00%13.13%13.31%14.88%* Annualized


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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations  The information in this Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the securities laws.  These forward-looking statements reflect the current view of Venture Lending & Leasing IV, Inc. (the Fund) with respect to future events and financial performance and are subject to a number of risks and uncertainties, many of which are beyond the Funds control.  All statements, other than statements of historical facts included in this report, regarding strategy, future operations, financial position, estimated revenues, projected costs, prospects, plans and objectives of the Fund are forward-looking statements.  When used in this report, the words will, believe, anticipate, intend, estimate, expect, project and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.  All forward-looking statements speak only as of the date of this report.  The Fund does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.  General  The Fund is 100% owned by Venture Lending & Leasing IV, LLC (the Company).  The Fund's shares of Common Stock, $.001 par value were sold to its shareholder under a stock purchase agreement.  The Fund has issued 100,000 of the Funds 10,000,000 authorized shares.  The Fund's shareholder may make additional capital contributions to the Fund.  In addition to the historical information contained herein, this Quarterly Report on Form 10-Q contains certain forward-looking statements.  The reader of this Quarterly Report should understand that all such forward-looking statements are subject to various uncertainties and risks that could affect their outcome.  The Fund's actual results could differ materially from those suggested by such forward-looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, variances in the actual versus projected growth in assets, return on assets, loan losses, expenses, rates charged on loans and earned on securities investments and competition.  This entire Quarterly Report should be read to put such forward-looking statements in context and to gain a more complete understanding of the uncertainties and risks involved in the Fund's business.   Overview  The Fund is a financial services company primarily providing financing and advisory services to a variety of carefully selected venture-backed companies primarily throughout the United States with a focus on growth oriented companies.  The Funds portfolio is well diversified and consists of companies in the communications, information services, media, and technology, including software and technology-enabled business services, bio-technology, and medical devices industry sectors, among others.  The Funds capital is generally used by our portfolio companies to finance acquisitions of fixed assets and/or for working capital.  On May 28, 2004, the Fund completed its first closing of capital, made its first investments, and became a non-diversified, closed-end investment company that elected to be treated as a business development company under the Investment Company Act of 1940.  The Fund elected to be treated for federal income tax purposes as a regulated investment company under the Internal Revenue Code with the filing of its federal corporate income tax return for 2004.  Pursuant to this election, the Fund generally will not have to pay corporate-level taxes on any income it distributes to the stockholder as dividends, allowing the Funds shareholder to substantially reduce or eliminate its corporate-level tax liability.  The Fund will seek to meet the ongoing requirements, including the diversification requirements, to qualify as a Regulated Investment Company (RIC) under the Internal Revenue Code.  If the Fund fails to meet these requirements, it will be taxed as an ordinary corporation on its taxable income for that year (even if that income is distributed to the Company) and all distributions out of its earnings and profits will be taxable to the Members of the


27


Company as ordinary income; thus, such income will be subject to a double layer of tax.  There is no assurance that the Fund will meet the ongoing requirements to qualify as a RIC for tax purposes.  The Fund's investment objective is to achieve a high total return.  The Fund seeks to achieve its investment objective by providing debt financing to portfolio companies.  Since inception, the Fund's investing activities have focused primarily on private debt securities.  The Fund generally receives warrants to acquire equity securities in connection with its portfolio investments.  The Fund generally distributes these warrants to its shareholder upon receipt.  The Fund also has guidelines for the percentages of total assets which will be invested in different types of assets.  The portfolio investments of the Fund consist of debt financing to early and late stage venture capital backed technology companies.  The borrowers ability to repay its loans may be adversely impacted by a number of factors, and as a result, the loan may not fully be repaid.  Furthermore, the Funds security interest in any collateral over the borrowers assets may be insufficient to make up any shortfall in payments.  Critical Accounting Policies We identified the most critical accounting principles upon which our financial statements depend and determined the critical accounting principles by considering accounting policies that involve the most complex or subjective decisions or assessments.  The only critical accounting policy we identified was related to the valuation of loans.  Loans are held at estimated fair value as determined by management, in accordance with the valuation methods described in the valuation of loans section of Note 2 of the Funds Annual Report on Form 10-K for the year ended December 31, 2007 (Summary of Significant Accounting Policies).  Critical factors in determining the fair value of a loan include payment history, collateral position, financial strength of the borrower, prospects for the borrower's raising future equity rounds, likelihood of sale or acquisition of the borrower, and length of expected holding period of the loan, as well as an evaluation of the general interest rate environment.  The actual value of the loans may differ from management's estimates which would affect net income as well as net assets. Results of Operations For the three and nine months ended September 30, 2008 and 2007  Total investment income for the three months ended September 30, 2008 and 2007 was $11.5 million and $13.8 million, respectively, of which $11.3 million and $13.5 million consisted of interest on venture loans outstanding during the period.  Total investment income for the nine months ended September 30, 2008 and 2007 was $35.9 million and $44.7 million, respectively, of which $35.4 million and $42.9 million consisted of interest on venture loans outstanding during the period. The remaining income related to interest income from short-term investment of cash as well as other income from commitment fees, warrants received for loans that will never fund, and incentive fees received on a certain loan.  The decrease in investment income is caused mainly by the declining performing loans from $428.6 million as of March 31, 2007 to $408.6 million as of June 30, 2007, to $388.6 million as of September 30, 2007, to $368.2 million as of December 31, 2007, to $326.0 million as of March 31, 2008, to $317.5 million as of June 30, 2008 and to $273.2 million as of September 30, 2008.  This was partially offset by increasing interest rates, as average interest rates increased from 13.49% for the three months ended September 30, 2007 to 15.43% for the three months ended September 30, 2008 and 13.85% for the nine months ended September 30, 2007 to 14.69% for the nine months ended September 30, 2008.  Interest is calculated using the effective interest method, and rates earned by the Fund will fluctuate based on many factors including volatility, early payoffs, and recovery of interest from non-performing assets. Management fees for the three months ended September 30, 2008 and 2007 were $2.1 million and $2.6 million, respectively. Management fees for the nine months ended September 30, 2008 and 2007 were $6.4 million and $8.1 million, respectively. Management fees are based on assets under management, and decreased due to the decrease in assets under management relative to the previous year.


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Total interest expense was $2.0 million and $2.9 million for the three months ended September 30, 2008 and 2007, respectively. Interest expense decreased for the period because average borrowings outstanding under the debt facility decreased from $187.5 million for the three months ended September 30, 2007 to $115.0 million for the three months ended September 30, 2008.  The decrease was partially offset by increased pricing on the facility as a result of Ambacs decreased rating and the Funds subsequent renewal of its facility.  Total interest expense was $5.8 million and $8.8 million for the nine months ended September 30, 2008 and 2007, respectively. Interest expense decreased for the period because average borrowings outstanding under the debt facility decreased from $200.2 million for the nine months ended September 30, 2007 to $128.1 million for the nine months ended September 30, 2008.  The decrease was partially offset by increasing weighted average interest rates from 5.85% to 6.08% for the same period. The majority of the increase in interest expense relates to the increased pricing resulting from the renewal of the debt facility.  Total banking and professional fees were $0.5 million and $0.5 million for the three months ended September 30, 2008 and 2007, respectively.  Total banking and professional fees were $1.7 million and $1.4 million for the nine months ended September 30, 2008 and 2007, respectively.  The increase for the period was primarily related to increased bank fees and to a lesser extent an increase in professional fees.  The banking fee increase was the result of paying down debt under the banking facility; which caused increased fees on the unused portion of the facility. Additionally, the Fund paid a $0.3 million fee when it renewed the facility in August 2008, which is being amortized over the remainder of the facilitys useful life.  Net investment income for the three months ended September 30, 2008 and 2007 was $7.0 million and $7.9 million, respectively.  Net investment income for the nine months ended September 30, 2008 and 2007 was $21.8 million and $26.3 million, respectively.  Total net realized loss from investment transactions was $(1.6) million and $(2.4) million for the three months ended September 30, 2008 and 2007 respectively. Total net realized loss from investment transactions was $(1.9) million and $(5.3) million for the nine months ended September 30, 2008 and 2007 respectively. The realized losses consist of write offs and recoveries of previously written off uncollectible loans.  The net change in realized and unrealized gain (loss) from hedging activities for the three months ended September 30, 2008 and 2007 was less than $0.1 million and $(0.8) million respectively.  The net change in realized gain (loss) from hedging activities for the nine months ended September 30, 2008 and 2007 was $(0.2) million and $(0.8) million respectively. The realized and unrealized gain (loss) consist of the unrealized gains and losses from hedging activities and the net interest received or paid on the interest rate swap transaction beginning with the quarter ended September 30, 2008.  Total net change in unrealized gain (loss) from investment activities for the three months ended September 30, 2008 and 2007 was $(0.2) million and $2.0 million respectively. Total net change in unrealized gain (loss) from investment activities for the nine months ended September 30, 2008 and 2007 was $(6.9) million and $1.3 million respectively. The unrealized gains (losses) consist of fair market value adjustment taken against loans.  Net increase in net assets resulting from operations for the three months ended September 30, 2008 and 2007 was $5.2 million and $6.6 million, respectively.  On a per share basis, net increase in net assets resulting from operations was $52.04 and $66.17 for the three months ended September 30, 2008 and 2007, respectively. Net increase in net assets resulting from operations for the nine months ended September 30, 2008 and 2007 was $12.9 million and $21.5 million, respectively.  On a per share basis, net increase in net assets resulting from operations was $128.71 and $215.08 for the nine months ended September 30, 2008 and 2007, respectively.   Liquidity and Capital Resources  September 30, 2008 and December 31, 2007  Total capital contributed to the Fund was $245.0 million and $242.5 million as of September 30, 2008 and


29


December 31, 2007, respectively.  Committed capital to the Company at September 30, 2008 and December 31, 2007 was $250.0 million, all of which had been called.  The Fund had in place a $138.0 million and $230.0 million securitization debt facility as of September 30, 2008 and December 31, 2007, respectively.  Borrowings by the Fund are collateralized by receivables from loans advanced by the Fund in its ordinary course of business.  The interest rate on this facility is usually the Commercial Paper Rate plus 3.00 percent, which on September 30, 2008, was 5.72 percent per year.  Subsequent to quarter end, on November 5, 2008, Moodys lowered Ambacs financial strength rating to Baa1 from Aa3.  This rating downgrade constitutes a specified event of default under the loan agreement.  The Program Agent has increased the interest rate on the loans to Prime plus 400 basis points, but other than the increase in pricing has not taken any action in response to the downgrade.  If it takes other action, there is no guarantee that the Fund will be able to renegotiate the facility with the Program Agent on acceptable terms, or be able to secure acceptable alternative financing arrangements.  The Program Agent could, as a result of the rating downgrade, require the Fund to repay its loan more quickly than if the rating downgrade to Ambac had not taken place.   The Fund typically will enter into hedge transactions to limit its interest rate risk, and thus the net interest expense will be based in a large part on the fixed rate negotiated on these transactions.  The revolving period of the facility terminates in January 2009, but can be accelerated under an event of default such as failure by the Fund to make timely interest or principal payments.  Upon the facility termination, the loan then amortizes until fully repaid. It is anticipated that the facility will pay off completely by December 2009. The first draw against this direct financial obligation of the Fund took place in October, 2004.  Both the bank fees and legal costs associated with this facility have been capitalized and are being amortized over the expected life of the facility.  At September 30, 2008 and December 31, 2007 the Fund had interest rate swap transactions outstanding with a total notional principal amount of $105.0 million and $156.0 million, respectively. The Fund pays a fixed rate of 4.865% and receives from the counterparty a floating LIBOR rate. Payments are made monthly and terminate in December 2009. The effect of these swap transactions is to convert the floating rate bank debt into a fixed rate on the contract notional value.  The amortization schedule for each borrowing under the facility is expected to correspond to the amortization of the loans supporting each borrowing.  As of September 30, 2008 and December 31, 2007, 14% and 4%, respectively, of the Fund's assets consisted of cash and cash equivalents. The Fund elected to retain a larger amount of cash during the quarter to ensure that it had sufficient capital to fund its commitments in light of the uncertainties in the credit market. The Fund continued to invest its assets in venture loans during the three and nine months ended September 30, 2008.  Amounts disbursed under the Fund's loan commitments totaled approximately $93.0 million during the period from December 31, 2007 through September 30, 2008.  Net loan amounts outstanding after amortization and reserves decreased by approximately $87.6 million for the same period.  Unexpired, unfunded commitments totaled approximately $29.8 million as of September 30, 2008.   As ofAmount DisbursedPrincipal Reductions and ReservesBalance Outstanding  Fair ValueUnexpired Unfunded CommitmentsSeptember 30, 2008$920.0 million$637.7 million$282.3 million$29.8 millionDecember 31, 2007$827.0 million$457.1 million$369.9 million$61.0 million   Because venture loans are privately negotiated transactions, investments in these assets are relatively illiquid.  It


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is the Funds experience that not all unfunded commitments will be used by borrowers.  The Fund seeks to meet the requirements to qualify for the special pass-through status available to RICs under the Internal Revenue Code, and thus to be relieved of federal income tax on that part of its net investment income and realized capital gains that it distributes to its shareholder.  To qualify as a RIC, the Fund must distribute to its shareholder for each taxable year at least 90% of its investment company taxable income (consisting generally of net investment income and net short-term capital gain) (Distribution Requirement).  To the extent that the terms of the Funds venture loans provide for the receipt by the Fund of additional interest at the end of the loan term or provide for the receipt by the Fund of a purchase price for the asset at the end of the loan term (residual income), the Fund would be required to accrue such residual income over the life of the loan, and to include such accrued income in its gross income for each taxable year even if it receives no portion of such residual income in that year.  Thus, in order to meet the Distribution Requirement and avoid payment of income taxes or an excise tax on undistributed income, the Fund may be required in a particular year to distribute as a dividend an amount in excess of the total amount of income it actually receives.  Those distributions will be made from the Fund's cash assets, from amounts received through amortization of loans or from borrowed funds.   Item 3.  Quantitative and Qualitative Disclosures About Market Risk  The Fund's business activities contain elements of risk.  The Fund considers the principal types of market risk to be interest rate risk and credit risk.  The Fund considers the management of risk essential to conducting its business and to maintaining profitability.  Accordingly, the Fund's risk management procedures are designed to identify and analyze the Fund's risks, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs.  The Fund anticipates managing its credit risk by maintaining a portfolio that is diverse by industry, size of investment, stage of development, and borrower.  The Fund has limited exposure to public market price fluctuations as the Fund primarily invests in private business enterprises and the Fund generally distributes all equity securities upon receipt to the Company.  The Fund enters into interest rate swap transactions to hedge its interest rate on its borrowings under its debt facility. Unrealized gains and losses from hedging activities are separately reported from unrealized gains and losses from investment activities and are included in realized and unrealized gain (loss) from hedging activities in these financial statements.  Also included in realized and unrealized gain (loss) from hedging activities is the net interest received or paid on the interest rate swap transactions beginning with the quarter ended September 30, 2008 (amounts were previously included in interest expense and were not considered material). The fair value of the interest rate swap is recorded in other assets or other liabilities and the change in the fair value is recorded as a change in unrealized gain (loss) from investment and hedging activities.  The Fund's sensitivity to changes in interest rates is regularly monitored and analyzed by measuring the characteristics of assets and liabilities.  The Fund utilizes various methods to assess interest rate risk in terms of the potential effect on interest income net of interest expense, the value of net assets and the value at risk in an effort to ensure that the Fund is insulated from any significant adverse effects from changes in interest rates.  Based on the model used for the sensitivity of interest income net of interest expense, if the balance sheet were to remain constant and no actions were taken to alter the existing interest rate sensitivity, a hypothetical immediate 100 basis point change in interest rates would have affected net income by $0.1 million.  This translates to less than 1% of income for the nine months ended September 30, 2008.  Although management believes that this measure is indicative of the Fund's sensitivity to interest rate changes, it makes estimates to adjust for potential changes in credit quality, size and composition of the balance sheet and other business developments that could affect net income.  Accordingly, no assurances can be given that actual results would not differ materially from the potential outcome simulated by these estimates.


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Item 4.  Controls and Procedures  See response to Item 4T.   Item 4T.  Controls and Procedures  Evaluation of Disclosure Controls and Procedures:  As of the end of the period covered by this quarterly report on Form 10-Q, the Fund's chief executive officer and chief financial officer conducted an evaluation of the Fund's disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934).  Based upon this evaluation, the Fund's chief executive officer and chief financial officer concluded that the Fund's disclosure controls and procedures were effective in timely alerting them of any material information relating to the Fund that is required to be disclosed by the Fund in the reports it files or submits under the Securities Exchange Act of 1934.   Changes in Internal Controls:  There were no changes in the Fund's internal controls or in other factors that could materially affect these controls during the period covered by this quarterly report on Form 10-Q.    PART II -- OTHER INFORMATION  Item 1.  Legal Proceedings  The Fund may become party to certain lawsuits from time to time in the normal course of business.  While the outcome of these legal proceedings cannot at this time be predicted with certainty, the Fund does not expect these proceedings will have a material effect upon the Fund's financial condition or results of operation.  Management is not aware of any pending legal proceedings involving the Fund.  Item 1A. Risk Factors  See item 1A  Risk Factors in the Funds 2007 Annual Report on Form 10-K for a detailed description of the risks attendant to the Fund and its business.  Other than as set forth below, there are no material changes from such risk factors.  Crisis in Financial Markets.  The ability of the Fund to provide an acceptable return may be adversely affected by economic factors to which the marketplace is subject.  Volatility and distribution in the global financial markets reached unprecedented levels during the third quarter of 2008 and extending into the fourth quarter.  This market turmoil could have a material adverse effect on the Funds business and operations.  Market turmoil could impact the Funds ability to maintain its debt facility to finance the acquisition of asset-based loans. The loan agreement governing the Funds debt facility requires that the Funds obligations be insured by Ambac Assurance Corporation (Ambac).  The agreement specifies that it is an event of default if the financial strength of Ambac falls below Aa3 by Moodys Investors Services (Moodys), in which event Societe Generale (Program Agent) may cease making new loans and accelerate payments due under the loan agreement.  On November 5, 2008, Moodys lowered


32


Ambacs financial strength rating to Baa1 from Aa3.  This rating downgrade constitutes a specified event of default under the loan agreement.  The Program Agent has increased the interest rate on the loans to Prime plus 400 basis points, but other than the increase in pricing has not taken any action in response to the downgrade. If it takes other action, there is no guarantee that the Fund will be able to renegotiate the facility with the Program Agent on acceptable terms, or be able to secure acceptable alternative financing arrangements.  The Program Agent could, as a result of the rating downgrade, require the Fund to repay its loan more quickly than if the rating downgrade to Ambac had not taken place.  Market conditions could also adversely impact the ability of the Funds borrowers to meet their obligations to the Fund and the value of the Funds direct investments in companies.  Most of the companies in which the Fund invests have not achieved profitability and require substantial equity financing to satisfy their continuing growth and working capital requirements.  The economic downturn could decrease the demand for such borrowers products and technology, thereby impairing such borrowers financial condition and ability to raise additional equity financing from outside investors.  This could result in an increase in borrower defaults under their obligations to the Fund, or a decrease in the value of the Funds direct equity investments.  U.S. and global economic conditions could continue to deteriorate and remain weak for an extended period of time.  Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds  Prior to the Funds commencement of operations on May 28, 2004, the Fund sold 100,000 shares to the Funds sole shareholder, Venture Lending & Leasing IV, LLC for $25,000 in November 2003.  No other shares of the Fund have been sold; however the Fund received an additional $245.0 million of paid in capital during the period from May 28, 2004 through September 30, 2008 which is expected to be used to acquire venture loans and fund operations. Item 3.  Defaults Upon Senior Securities Not applicable  Item 4. Submission of Matters to a Vote of Security Holders  None  Item 5.  Other Information  None


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Item 6.  Exhibits  Exhibit NumberDescription3(i)Articles of Amendment and Restatement as filed with the Maryland Secretary of State on October 14, 2004, incorporated by reference to the Funds Form 10-Q filed with the Securities and Exchange Commission on May 13, 2005.3(ii)Bylaws of the Fund, as amended.4.1Form of Purchase Agreement between the Fund and the Company, incorporated by reference to the Funds Registration Statement on Form 10 filed with the Securities and Exchange Commission on December 10, 2003.31.1-32.2Certifications pursuant to The Sarbanes-Oxley Act of 2002


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SIGNATURES  Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized.  VENTURE LENDING & LEASING IV, INC. (Registrant)  By: /S/ Ronald W. Swenson By: /S/ Martin D. Eng Ronald W. Swenson Martin D. Eng Chairman and Chief Executive Officer Chief Financial Officer Date: November 13, 2008 Date: November 13, 2008


35


EXHIBIT INDEX    Exhibit NumberDescription3(i)Articles of Amendment and Restatement as filed with the Maryland Secretary of State on October 14, 2004, incorporated by reference to the Funds Form 10-Q filed with the Securities and Exchange Commission on May 13, 2005.3(ii)Bylaws of the Fund, as amended.4.1Form of Purchase Agreement between the Fund and the Company, incorporated by reference to the Funds Registration Statement on Form 10 filed with the Securities and Exchange Commission on December 10, 2003.31.1-32.2Certifications pursuant to The Sarbanes-Oxley Act of 2002


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Exhibit 31.1 CERTIFICATION PURSUANT TO 
RULE 13a-14  I, Martin D. Eng certify that:  1. I have reviewed this quarterly report on Form 10-Q of Venture Lending & Leasing IV, Inc.;  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;  4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:  a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b)   designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and  5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions):  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.  Date: November 13, 2008  /S/ Martin D. Eng Martin D. Eng Chief Financial Officer


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Exhibit 31.2 CERTIFICATION PURSUANT TO 
RULE 13a-14  I, Ronald W. Swenson, certify that:  1. I have reviewed this quarterly report on Form 10-Q of Venture Lending & Leasing IV, Inc.;  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;  4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:  a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b)   designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrants internal control over financial reporting that occurred during the period covered by the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and  5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions):  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.  Date: November 13, 2008  /S/ Ronald W. Swenson Ronald W. Swenson Chief Executive Officer


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Exhibit 32.1 CERTIFICATION PURSUANT TO 
18 U.S.C. SECTION 1350, 
AS ADOPTED PURSUANT TO 
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Venture Lending & Leasing IV, Inc. (the "Fund") on Form 10-Q for the period ending September 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ronald W. Swenson, Chief Executive Officer of the Fund, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Fund.  /S/ Ronald W. Swenson Ronald W. Swenson Chief Executive Officer November 13, 2008


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Exhibit 32.2  CERTIFICATION PURSUANT TO 
18 U.S.C. SECTION 1350, 
AS ADOPTED PURSUANT TO 
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Venture Lending & Leasing IV, Inc. (the "Fund") on Form 10-Q for the period ending September 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Martin D. Eng, Chief Financial Officer of the Fund, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Fund.  /S/ Martin D. Eng Martin D. Eng Chief Financial Officer
November 13, 2008


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