Conceived over a poker recreation between two of its founders almost 40 years in the past, the agency grew into the only most important monetary establishment for the nascent tech scene, serving half of all venture-backed corporations within the US and 44% of the venture-backed expertise and health-care corporations that went public final yr. And its choices had been huge — starting from commonplace checking accounts, to VC funding, to loans, to foreign money danger administration.
The financial institution says by itself web site: “There are many ways to describe us. ‘Bank’ is just one.”
As the world begins to evaluate the fallout of the largest financial institution collapse because the 2008 monetary disaster, listed here are the varied methods the financial institution of Silicon Valley stretched its tentacles across the tech business and past.
A Banker
SVB’s most blatant providers concerned conventional banking. It provided the same old checking accounts, bank cards and cash market accounts with as much as 4.5% annual proportion yield. The agency additionally helped retailers settle for funds for gross sales, challenge invoices, handle subscriptions and set up recurring billing.
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An Investor’s Investor
One essential reality to remember as SVB’s failure ripples throughout industries is that the financial institution was an investor in its personal proper. The firm’s enterprise capital and credit score funding arm has immediately invested in a number of fund managers and portfolio corporations for greater than 20 years. The corporations which have benefited from its cash embrace: Sequoia Capital, Accel, Kleiner Perkins, Ribbit Capital, Spark Capital and Greylock.The financial institution’s world fund mortgage banking e-book was comprised of 56% of loans to enterprise capital and personal fairness corporations as of the top of final yr. How that may have an effect on VC corporations themselves is unclear.
A Lender
SVB was a pioneer of what’s generally known as enterprise debt, a sort of mortgage provided by banks and nonbank lenders particularly designed for early-stage, high-growth corporations with VC backing. The overwhelming majority of VC-backed corporations now elevate debt in some unspecified time in the future from banks akin to SVB. Among its different lending options had been mortgage lending, non-public stock-based lending and accomplice strains of credit score for corporations. Its lending providers prolonged to a number of nonprofits together with constitution colleges, non-public faculties and mission-based organizations.
A Wealth Manager
In addition to being a lender for startups, SVB additionally took care of their executives, offering non-public banking and wealth administration providers together with monetary and tax planning and residential fairness strains of credit score.
A Financial Adviser
The financial institution’s securities division caters to healthcare and tech-focused corporations with providers together with M&A advisory, fairness and debt capital markets, proprietary analysis and gross sales and buying and selling. The firm includes a checklist on its web site of greater than 1,000 transactions it has been concerned in — together with as joint bookrunner, unique monetary adviser and sole placement agent. It has lengthy prided itself in being a one-stop store for startups from launch, to seed feeding, to enterprise rounds, to main acquisitions and IPOs. “You won’t outgrow SVB,” the financial institution says on its web site.
A Networker
Once a startup is part of the SVB “ecosystem,” it positive factors entry to a number of occasions that deliver collectively traders, different founders and folks within the startup scene. For many years, it was laborious to discover a main startup occasion that SVB wasn’t a sponsor of — one among its many efforts that so deeply embedded the financial institution into the very cloth of startup world that some founders felt compelled to do business with the agency.
Sarika Bajaj, chief govt officer of early-stage startup Refiberd, mentioned she selected SVB to strengthen the legitimacy of her business. “Everyone was like, ‘Oh you want to do SVB, otherwise people are sketched out if you don’t,’” she mentioned.
A Winery Backer
One very California-centric position that SVB performed: Serving as the highest monetary providers supplier to premium wine producers, largely in Napa Valley, Sonoma County and Central Coast areas, but in addition within the Pacific Northwest.
A Foreign Exchange Risk Hedger
Among the lesser identified providers the financial institution provided was managing foreign money danger for corporations that do business internationally. SVB boasted that it may hedge in opposition to volatility throughout greater than 90 currencies with groups that cater particularly to non-public fairness funds, seed and enterprise capital, late- and early-stage tech and well being care corporations.
Source: economictimes.indiatimes.com