Insiders say collapsed Silicon Valley Bank more closely resembled the startups it served than its Wall Street bank rivals. Find out more.
‘Like working at a tech company’
To become the largest bank to the “innovation economy,” serving half of all venture-backed tech and life sciences companies in the U.S., SVB ventured where most other banks would not. It lent money to unprofitable startups and helped entrepreneurs with household finances such as large mortgages, car payments and school fees.Article content
In exchange for the risks it took, SVB in many cases required borrowers to bank with it exclusively and took equity warrants — the right to purchase a percentage of its shares in the future — in their company. It mirrored the spirit of a venture firm: betting that a few companies it lent to would be so successful the gain would offset losses from all of those that failed.Article content
The Silicon Valley Bank logo is seen through a rain covered window in front of the SVB headquarters on March 10.SVB executives were also deeply committed to social justice, according to several of its ex-employees. “I almost felt like I was at work on a college campus,” said another former executive, who recalled weekly internal “TED talks” on social issues and classes on “how to make sure you were not committing a microaggression.
The expansion into full-service banking was aimed at increasing SVB’s competitive advantage as larger institutions such as JPMorgan Chase & Co. muscled into its territory of providing financing to tech startups and started poaching its bankers.
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'Not cut-throat like Goldman Sachs': Insiders say SVB operated more like a startup than a top bankInsiders say collapsed Silicon Valley Bank more closely resembled the startups it served than its Wall Street bank rivals. Find out more.
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