The collapse of Silicon Valley Bank last Friday has left venture capitalists and startups scrambling to find a place that understands their business as deeply as the failed bank did.
Bankers formerly at Silicon Valley Bank are likely to land other jobs where they would be available for some of their old clients, said Robert Hendershott, a professor at Santa Clara University who studies private equity, entrepreneurial finance, and bank consolidation.“Creating a banking relationship in a multimillion-dollar level is not at the click of a mouse,” Hendershott said.
Former tech company employee and journalist Sherrell Dorsey runs The Plug, a news publication that focuses on Black startups. Dorsey said Silicon Valley Bank “was an alternative to major financial institutions that have discriminated against Black and brown people.” She said some founders of color are now thinking “how do you go and work with banks that you don’t trust?”
Mehere says there are “tons of banks” that offer venture debt, citing the examples of Comerica Inc. CMA, +4.20%, Wells Fargo & Co. WFC, +3.59% and privately held investment company Neuberger Berman. Yieldstreet didn’t bank with Silicon Valley Bank. “Going forward we prefer more diversified tactics,” Zhang said. “Maybe use two banks. Or two or three.” He said he knows that may not be ideal logistically, but “you have to take the tradeoff because safety is important.”
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