“I remember having unpleasant conversations where I was like, wow, you know, you took a piece of my skin, but my business still survived,” says Zbar, now chief executive of HamsaPay, which uses blockchain for commercial loan financing. He believes that other banks are less flexible than SVB. “They freeze it and that’s it,” he says. Zbar even welcomed his SVB banker as a guest to his bachelor party.
To be sure, Silicon Valley Bank’s reliance on the connections and knowledge of venture capitalists to guide its lending decisions raises questions about whether it perpetuates the exclusion of women, racial minorities, or other historically neglected groups. by the startup financing sector. Investors say some of these questions may be valid, but the bank has opened up opportunities.
SVB provided liquidity to people from underrepresented backgrounds who were trying to invest in venture funds, says investor Craig, who runs Outlander VC. She provided real estate mortgages to early-stage investors who couldn’t get them elsewhere, based on a deep understanding of the tech companies her clients were betting on, Craig says. “I really hope they rebuild and come back together. No one understood founders and innovators as well as SVB,” he says.
As entrepreneurs turned to other banks in recent days to transfer their deposits from SVB, their experiences reminded them of what they valued about SVB. James Zefr hasn’t found a single bank that can offer all the services he wants. He therefore uses one to borrow money and another for conventional accounts. He doesn’t expect Zefr’s growth to slow down, but says his company “will have to endure worse conditions or take a little more risk.”
Gupta, chief technology officer at BonfireDAO, recalls how he was able to open an account at SVB entirely online while in Singapore at his previous startup a decade ago, an option he didn’t have found as he now searches for SVB alternatives. “They were the first to really come up with solutions,” he says of his early interactions with SVB. “I never shopped again.”
He wrote on LinkedIn last week that “many startups like [his] I lost a valuable friend, partner and source of support. He says his heart wants to stay with SVB if it resurrects, but he’s no longer sure it’s financially prudent to do so, no matter the constant help, priceless discounts or occasional free conference room.
