Given where it is headquartered, it should come as little surprise that Silicon Valley Bank has continued to lead the field when it comes to catering for the venture capital and corporate venturing markets.
With several decades’ experience of helping some of the world’s largest firms invest in new and innovative ideas and companies, SVB’s advisory services have become an integral cog in the corporate venturing engine. One of the key attractions of working with SVB for many businesses is the network of relationships the bank has built up with the entrepreneurial community not just in Silicon Valley but around the world.
The past 12 months have seen SVB increase its focus on the fast-growing fintech sector, while the firm also reported continued strong investment from corporate venturing units in biotech.
But managing director Tracy Isacke says that 2016 could well be the point at which “frontier tech” – the likes of artificial intelligence, virtual reality and space-related business – really takes off. SVB runs a regular series of thematic events centres around topics such as fintech or frontier tech, to help venturing units establish relationships with potential investees.
Isacke also says that the current difficult economic climate only increases the need for companies to think about innovation and corporate venturing. “With doom and gloom headlines swirling, it is sometimes difficult to see much beyond the next week or quarter,” she said. “But this is exactly the time when visionary entrepreneurs and innovative enterprises set themselves apart. While the speeding innovation economy, impacted by overall economic uncertainty, may have hit a slow patch in terms of VC funding, few leaders, if any, are giving up. They may be retooling financing strategies, but they are firmly committed to innovation.”
Isacke pointed out that present problems faced by corporates in raising money could have a silver lining: “Raising money is always challenging, and tightening capital requirements often leads to healthier, more sustainable companies.”
As well as helping to identify the right companies and sectors to invest in, SVB naturally plays an invaluable role in helping to structure mutually beneficial deals. For example, its venture debt provides entrepreneurs and company founders with an opportunity to increase funding levels while at the same time preserving ownership.
SVB also puts its money where its mouth is by investing equity through its SVB Capital arm, which currently has more than $2.5bn under management.