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Silicon Valley Bank Launches In London To Bridge The Tech Funding Gap

25 points by iProject 14y ago

dawson 14y ago
I had an investment meeting with them in their London offices late last year and was given lots of [free] advice and support; confused re launch article as they have been around in London for a while now, however, congratulations!
ig1 14y ago
Bad article that shows fundamental misunderstanding of the startup scene in London. The tech funding gap in London isn't at the growth stage but rather at seed stage (where SVB don't get involved). Once you're making money and you're looking at growth funding there's plenty of angels and VC which would be interested (and SVB provides a valuable alternative).
- swombat 14y ago
  That being said, most UK banks suck (having tried a few, I know), and I am in fact seriously considering switching my company's bank account from Lloyds to these guys, since presumably they are not ass-backwards retarded when it comes to simple tech things that you expect in 2012.
  - ig1 14y ago
    Probably the most useful thing SVB could do for seed-stage startups is to offer painless merchant accounts structured with startups in mind (i.e not requiring a 100k deposit if you're only going to be processing 30k in payments, etc.)
    - swombat 14y ago
      They don't list merchant accounts as part of their account services, but I suspect that can't and won't be their main differentiator. After all, BrainTree has now expanded to the UK (and I believe they offer accounts-with-merchant-account-included), and surely a Stripe-in-the-UK clone (or even Stripe expanding to the UK) is not far away.
axefrog 14y ago
All the talk with regards to funding is generally focussed around either bootstrapping with customer revenue from day 1, and/or taking funding from angels and VCs. Where does Silicon Valley Bank fit into the picture? I've basically never seen any blog posts, dicussions or articles advising of the pros and cons of going down this route. Any suggestions or experiences to share?
- swombat 14y ago
  A corporate bank's primary purpose is easily stated as: to help its customers manage and raise money. Traditionally, this has included both equity funding and debt funding. Banks will help with public offerings, and with issuing bonds - or loaning directly from the bank's cash pile. Most established businesses use some amount of loans to "leverage" their business. Some smaller (and even larger) businesses even depend on the loans to operate day to day. However, startups normally don't get access to this type of money, because banks see them as far too risky. SVB presumably has its own custom risk models and procedures to deal with startups, which enables them to loan money to startups even though most banks wouldn't. Why would a startup want to get a loan rather than raising some money? Because borrowing money is about a billion times better/cheaper than selling a chunk of the company, that's why. This won't be replacing seed funding - that's always going to be too risky for a bank, which needs most of its money to be repaid with interest - but for startups with sustainable revenues and growth, SVB can presumably come to a sensible analysis as to whether this company will be able to service its debt, and so make a loan where a traditional bank wouldn't, in a growth funding situation. And the startup would be stupid not to raise at least part of their growth funding with a loan rather than selling more equity, if they can.
ragmondo 14y ago
Holy ripoff Batman. Check out their fees ! Sorry but they seem to charge for just about everything you can do. I'm not expecting free banking service but 25 GBP/month just to have an account there ?? 2.75% for using the debit card ?! WOW !!
- swombat 14y ago
  Everything's negotiable... (at least, it better be...)

25 points by iProject 14y ago

I had an investment meeting with them in their London offices late last year and was given lots of [free] advice and support; confused re launch article as they have been around in London for a while now, however, congratulations!

ig1 14y ago

Bad article that shows fundamental misunderstanding of the startup scene in London. The tech funding gap in London isn't at the growth stage but rather at seed stage (where SVB don't get involved). Once you're making money and you're looking at growth funding there's plenty of angels and VC which would be interested (and SVB provides a valuable alternative).

swombat 14y ago
That being said, most UK banks suck (having tried a few, I know), and I am in fact seriously considering switching my company's bank account from Lloyds to these guys, since presumably they are not ass-backwards retarded when it comes to simple tech things that you expect in 2012.
- ig1 14y ago
  Probably the most useful thing SVB could do for seed-stage startups is to offer painless merchant accounts structured with startups in mind (i.e not requiring a 100k deposit if you're only going to be processing 30k in payments, etc.)
  - swombat 14y ago
    They don't list merchant accounts as part of their account services, but I suspect that can't and won't be their main differentiator. After all, BrainTree has now expanded to the UK (and I believe they offer accounts-with-merchant-account-included), and surely a Stripe-in-the-UK clone (or even Stripe expanding to the UK) is not far away.

axefrog 14y ago

All the talk with regards to funding is generally focussed around either bootstrapping with customer revenue from day 1, and/or taking funding from angels and VCs. Where does Silicon Valley Bank fit into the picture? I've basically never seen any blog posts, dicussions or articles advising of the pros and cons of going down this route. Any suggestions or experiences to share?

swombat 14y ago
A corporate bank's primary purpose is easily stated as: to help its customers manage and raise money. Traditionally, this has included both equity funding and debt funding. Banks will help with public offerings, and with issuing bonds - or loaning directly from the bank's cash pile. Most established businesses use some amount of loans to "leverage" their business. Some smaller (and even larger) businesses even depend on the loans to operate day to day. However, startups normally don't get access to this type of money, because banks see them as far too risky. SVB presumably has its own custom risk models and procedures to deal with startups, which enables them to loan money to startups even though most banks wouldn't. Why would a startup want to get a loan rather than raising some money? Because borrowing money is about a billion times better/cheaper than selling a chunk of the company, that's why. This won't be replacing seed funding - that's always going to be too risky for a bank, which needs most of its money to be repaid with interest - but for startups with sustainable revenues and growth, SVB can presumably come to a sensible analysis as to whether this company will be able to service its debt, and so make a loan where a traditional bank wouldn't, in a growth funding situation. And the startup would be stupid not to raise at least part of their growth funding with a loan rather than selling more equity, if they can.

ragmondo 14y ago

Holy ripoff Batman. Check out their fees ! Sorry but they seem to charge for just about everything you can do. I'm not expecting free banking service but 25 GBP/month just to have an account there ?? 2.75% for using the debit card ?! WOW !!

swombat 14y ago
Everything's negotiable... (at least, it better be...)