Insight from: Peter White
Since SVB’s humble beginning in 1983, the firm has expanded to serve entrepreneurs and high-net worth clients across the globe. The bank’s services are a unique twist on the traditional funding or wealth management platforms found commonly across the sphere of financial services firms. Additionally, the firm’s geographical proximity to the heart of innovation and creativity places SVB strategically to best serve its clients’ needs, as well as foster meaningful relationships across the venture space. The venture space as a whole is fascinating, regardless of academic or professional background: Almost $70B of VC funds were deployed in disruptive and innovative companies that impact our daily lives in 2016 alone.
Silicon Valley Bank’s core is rooted in a superior understanding of the startup and venture capital space, made possible through in depth market research and valuation capabilities. This experience and research backing allows SVB to serve its clients, varying in size from pre-revenue to multibillion revenue, with services aimed at helping grow quickly and responsibly. Backed by industry leading banking and venture experience, SVB provides a broad range of services across three main business lines.
The Global Commercial Bank is comprised of SVB’s traditional commercial bank arm, Private Equity Division, SVB Wine, SVB Analytics, and Debt Fund Investments. Without spending too much time describing the process, the commercial bank provides loans and other credit facilities to commercial clients, primarily across the life science/healthcare and technology sectors. SVB Wine provides banking products and services to premium wine industry clients, including, but not exclusive to, vineyard development loans: Cheers to SVB Wine. SVB Analytics is responsible for all the equity valuation employed across client interaction both on the private equity and venture capital side. Finally, Debt Fund Investments, across three main funds, provides at various maturities strategic secured debt placements.
The Private Bank provides a broad range of individualized wealth management services to high net-worth individuals and private equity/ venture capital professionals, as well as the executive members that these individuals support daily. The Private Bank aims to continue building upon the vast SVB network by holding responsibility for its colleagues’ personal wealth.
SVB Capital is the third revenue driver for the bank and focuses solely on venture capital investments, either directly or into fund of funds focused on venture investment. SVB Capital currently manages over $3B AUM across its funds. SVB Analytics, housed under the Global Commercial Bank, directly supports SVB Capital with equity valuation and market research. Said market research ranges from simply identifying sector and industry specific trends, to collecting data on every venture fund that typically invests in Series A rounds. This knowledge allows SVB Capital to better understand its competitors and increase the likelihood of future co-investment opportunities.
The deciding factor in SVB’s success as a bank and wealth manager is no different from what it takes to land a full-time gig upon graduating: both are relationship based. SVB’s ability to co-invest alongside some of the biggest VC players in the industry is solely a result of whether they can cultivate a healthy working relationship with VCs and entrepreneurs alike. Similarly, landing a job is like throwing darts blindfolded: There have to be many darts thrown, each one with a genuine and proactive spirit, in order to have that one stick.
A brief article on the modern day banking climate wouldn’t be complete without the obligatory mention of firm culture. Unlike the pin-drop quiet, business formal environments found with Manhattan’s giants, SVB seeks to embody the entrepreneur, while maintaining its status as the banker. No suits are found at SVB’s headquarters: only sleek modern architecture, free snacks, and collaborative work spaces.
Peter White is a second year associate of the Rines Angel Fund specializing in financial analysis. Learn more about Peter.