Here’s how Silicon Valley Bank served the tech industry and beyond

what it was Silicon Valley Bank to the world of startups and venture capital? Practically everything.

Conceived from a poker game between two of its founders nearly 40 years ago, the company became the most critical financial institution for the nascent tech scene, serving half of all venture capital-backed companies. companies in the US and 44% of technology supported by businesses and healthcare companies which was made public last year. And their offerings were broad, from standard checking accounts to venture capital investments, loans, and currency risk management.

The bank says on its own website: “There are many ways to describe us. ‘Bank’ is only one”.

As the world begins to assess the fallout from the biggest banking collapse since the 2008 financial crisis, here are the various ways the bank of Silicon Valley it spread its tentacles around the tech industry and beyond.

a banker

SVB’s most obvious services involved traditional banking. It offered the usual checking, credit card, and money market accounts with up to 4.5% APR. The firm also helped merchants accept sales payments, issue invoices, manage subscriptions, and set up recurring billing.

An investor’s investor

A crucial fact to keep in mind as SVB’s bankruptcy spreads across all industries is that the bank was an investor in its own right. The firm’s venture capital and credit investing division has invested directly in a number of fund and portfolio managers companies for more than 20 years. Firms that have benefited from his money include: Sequoia Capital, Accel, Kleiner Perkins, Ribbit Capital, Spark Capital and Greylock.

The bank’s global fund lending book was made up of 56% loans to venture capital and private equity firms at the end of last year. It’s unclear how that will affect the venture capital firms themselves.

a moneylender

SVB pioneered what is known as venture debt, a type of loan offered by banks and non-bank lenders designed specifically for early-stage, high-growth companies backed by venture capital. The vast majority of VC-backed companies now take on debt at some point from banks like SVB. Among its other lending solutions were home loans, equity-based private loans, and partner lines of credit for businesses. Its lending services have extended to a large number of nonprofit organizations, including charter schools, private universities, and mission-based organizations.

a wealth manager

In addition to being a lender to start-ups, SVB also took care of its executives, providing private banking and wealth management services, including financial and tax planning and home equity lines of credit.

A financial adviser

The bank’s securities division serves companies focused on healthcare and technology with services that include advice on mergers and acquisitions, equity and debt capital markets, proprietary research, and sales and trading. The company lists on its website more than 1,000 transactions in which it has been involved, including as a joint bookbroker, sole financial advisor and sole placement agent. It has long prided itself on being a one-stop-shop for startups from launch, to seed feeding, to venture rounds, major acquisitions, and IPOs. “It will not outperform SVB,” the bank says on its website.

A Networker

Once a startup is part of the SVB “ecosystem,” it gains access to a series of events that bring together investors, other founders, and people in the startup scene. For decades, it was hard to find a major startup event that SVB wasn’t a sponsor of, one of its many efforts that embedded the bank so deeply into the very fabric of the startup world that some founders felt compelled to do business with the company. . .

Sarika Bajaj, CEO of early-stage startup Refibed, said she chose SVB to bolster the legitimacy of her business. “Everyone was like, ‘Oh, you want to do SVB, otherwise people will get sketched out if you don’t,’” she said.

A patron of the winery

A very California-focused role that SVB played: serving as the primary provider of financial services to premium wine producers, primarily in the Napa Valley, Sonoma County and Central Coast regions, but also in the Pacific Northwest.

Foreign exchange risk coverage

Among the lesser-known services the bank offered was foreign exchange risk management for companies doing business internationally. SVB boasted that it could hedge against volatility in more than 90 coins with teams that specifically cater to private equity funds, seed and venture capital, late-stage and early-stage healthcare and technology companies.