What the loss of Silicon Valley Bank means for Silicon Valley
Regulators prevented a cash crunch – but venture capital has not emerged unscathed
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SILICON Valley is a tough place to be a banker. Startup bosses call with references but no revenue. Loans can seldom be secured against physical assets. Many clients fail.
Silicon Valley Bank (SVB) netted nearly half of America’s venture-backed technology and life science firms as clients, by providing what a venture capitalist calls “the white-glove, red-carpet treatment”.
This was not just about the lunches and events put on by the bank. SVB established itself as a reliable cog in Silicon Valley’s dream machine. In the Financial Times, Michael Moritz of Sequoia Capital, a grand venture capital outfit, lamented the loss as akin to a “death in the family”.
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