One thing that Silicon Valley Bank was known for was its early involvement in startups and venture capital. As a place where startup managers could park their money or take out a new line of credit, the bank offered access to valuable resources and support. In addition, its experienced employees were always happy to offer advice on how best to grow businesses.
Schmidt saw the opportunity to provide innovative financing to SVB’s expanding portfolio of startups and was able to convince other traditional investors to back the effort. Schmidt and his team were instrumental in helping many startups get off the ground, providing access to resources and networking opportunities. Despite SVB’s failures post-collapse, many startup CEOs credit Schmidt with helping them during their earliest days in business.
SVB was designed as a more customer-friendly bank for the venture community, which may have been one reason it gained a following among startup ventures. It had options for smaller funds that other banks did not, and its knowledgeable staff was happy to work with startups.
Nisha Desai is an early-stage investor and the CEO and Managing General Partner of Andav Capital. After SVB didn’t have account minimums or net worth requirements, Desai found the bank to be a natural choice for her emerging investment company. With capital lines available, Andav was able to start building its track record while still fundraising. Desai believes that smaller banks like SVB are essential to support innovation in finance and offers an interesting perspective on banking from the perspective of a small fund manager.
Desai believes that the influx of new managers on the scene was helped by the capital infusion that was given to them through their new funds. The manager had room to invest in different companies, some with more success than others, but overall it allowed newer managers a starting point.
Some emerging managers said that while the back-end banking operations got them involved with SVB in the first place, its commitment to emerging managers is what made them want to continue the relationship. Emerging managers noted that SVB provides a platform for them to meet and engage with other financial professionals who can help grow their businesses. Additionally, they appreciate SVB’s willingness to collaborate and work together on initiatives that benefit both parties.
