{"id":618133,"date":"2023-03-15T09:49:00","date_gmt":"2023-03-15T14:49:00","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/03\/15\/wine-skiing-and-loans-how-silicon-valley-bank-became-startups-best-friend\/"},"modified":"2023-03-15T09:49:00","modified_gmt":"2023-03-15T14:49:00","slug":"wine-skiing-and-loans-how-silicon-valley-bank-became-startups-best-friend","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/03\/15\/wine-skiing-and-loans-how-silicon-valley-bank-became-startups-best-friend\/","title":{"rendered":"Wine, Skiing, and Loans: How Silicon Valley Bank Became Startups\u2019 Best Friend"},"content":{"rendered":"
\n

Generally, it offered among the least-restrictive terms and equally competitive interest rates, entrepreneurs say. If a borrower failed, SVB\u00a0was known to handle it more gracefully than other lenders<\/a>.\u00a0Effectively, according to language seen by WIRED, SVB would support companies as long as their venture capital backers, often clients of the bank, did not abandon them. \u201cBankers become a lifeline when you get into trouble, and if they stand by you, I take that seriously,\u201d says James of his loyalty to the now crushed bank.\u00a0<\/p>\n

Roger Smith, SVB\u2019s founding CEO,\u00a0told the Computer History Museum in 2014<\/a> that the bank did not sacrifice profits by being flexible. \u201cWhen the music stops, we want two chairs, not just one,\u201d he said. \u201cBut we were able to help people grow and \u2026 we were part of the flow.\u201d<\/p>\n

Just ask Zbar, the former Sunbasket chief. He dreamed up the meal delivery company in 2013 after he had spent through the venture funding he had raised for a different idea. He had no money to pay back a bank loan. But his banker at SVB loved the Sunbasket pitch, and investors were supportive, so SVB agreed to allow Zbar to keep operating month-to-month on new terms as the food venture progressed.<\/p>\n

\u201cI remember having some unpleasant conversations where I was like, wow, you know, you took a piece of my hide, but my business still survived,\u201d says Zbar, now chief executive of HamsaPay, which uses blockchain for commercial loan financing.\u00a0He believes other banks are less flexible than SVB.\u00a0\u201cThey just freeze it, and you’re done,\u201d he says.\u00a0\u00a0Zbar even welcomed his SVB banker as a bachelor-party guest.\u00a0<\/p>\n

To be sure, Silicon Valley Bank\u2019s reliance on relationships and knowledge of venture capitalists to guide its lending decisions raises questions about whether it perpetuated exclusion of women, racial minorities, or other groups historically overlooked by the startup financing industry. Investors say some of those issues may be valid, but the bank did open up opportunities.<\/p>\n

SVB fronted cash to people of underrepresented backgrounds trying to buy into venture capital funds, says the investor Craig, who runs Outlander VC. It provided home mortgages to investors early in their careers who couldn\u2019t get them elsewhere, based on a deep understanding of the tech companies its customers were betting on, Craig says. \u201cI really hope they rebuild and reconstitute. No one understood founders and innovators as well as SVB,\u201d he says.\u00a0\u00a0<\/p>\n

As entrepreneurs have fanned out to other banks in recent days to shift their deposits from SVB, their experiences have reminded them of what they enjoyed about SVB. James\u2019 Zefr has not found a single bank that can offer every service he wants, so he is using one to borrow money and another for conventional accounts. He does not expect Zefr\u2019s growth to slow, but says his company \u201cwill have to suffer worse terms or take on a bit more risk.\u201d<\/p>\n

Gupta, who is chief technology officer of BonfireDAO, recalls how he was able to open an account with SVB entirely online while in Singapore at his previous startup a decade ago, an option he has not found as he now searches for SVB alternatives. \u201cThey were just the first one to really propose solutions,\u201d he says of his early interactions with SVB. \u201cI never shopped around again.\u201d<\/p>\n

He\u00a0wrote on LinkedIn<\/a> last week that \u201cmany startups like [his] have lost a valuable friend, partner, and source of support.\u201d He says his heart wants to stick with SVB if it resurrects, but he\u2019s no longer sure it\u2019s financially prudent to do so, no matter the constant aid, invaluable discounts, or occasional free conference room.<\/p>\n<\/div>\n

Read More<\/a>
\n Paresh Dave<\/p>\n","protected":false},"excerpt":{"rendered":"

Generally, it offered among the least-restrictive terms and equally competitive interest rates, entrepreneurs say. If a borrower failed, SVB\u00a0was known to handle it more gracefully than other lenders.\u00a0Effectively, according to language seen by WIRED, SVB would support companies as long as their venture capital backers, often clients of the bank, did not abandon them. \u201cBankers<\/p>\n","protected":false},"author":1,"featured_media":618134,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2040,116333,46],"tags":[],"class_list":{"0":"post-618133","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-loans","8":"category-skiing","9":"category-technology"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/618133","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=618133"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/618133\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/618134"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=618133"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=618133"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=618133"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}