Silicon Valley Bank is a commercial bank and a subsidiary of the SVB Financial Group. It was founded in 1983 and is headquartered in Santa Clara, California. It is one of the banks listed on the Federal Financial Institutions Examination Council’s list of the largest banks in the United States. As of Q1 2022, total assets were $220 billion, and total deposits/investments were $397 billion. Silicon Valley Bank is listed on the Nasdaq and is an S&P 500 company.
About Silicon Valley Bank
Silicon Valley Bank (SVB) focuses its lending efforts on four primary areas: venture debt, growth capital, working capital, and mezzanine finance.
It has extensive experience in various industries, including Cleantech and Sustainability,
- Consumer Internet
- Enterprise Software
- Fintech
- Hardware and Frontier Tech
- Investors
- Life Science and Healthcare
- Premium Wine Banking
In 39 years, the bank has grown to have 20 offices in 15 states across the United States, and an international presence in the U.K., China, Ireland, Germany, India, Canada, and Denmark.
Silicon Valley Bank estimates that 50% of all venture capital-backed tech and life sciences companies in the U.S. are clients, as well as 55% of U.S. venture capital-backed companies with an IPO (based on PitchBook and NVCA data).
Its loan portfolio is comprised both of startups with revenue under $5 million (2% of portfolio) and larger companies (98% of portfolio). In total, SVB has a loan portfolio of over $69 billion.
Eligibility and Products Offered
Within their startup banking operations, SVB focuses primarily on two areas: venture debt and accounts receivable (AR) lending.
Silicon Valley Bank is liberal with its eligibility standards. The bank has packages for startups, venture-backed companies, and established corporations. SVB does favor new ventures and is estimated to manage assets for over 50% of the startups in the U.S.
SVB typically sets the available amount of venture debt at 20% - 35% of the client’s most recent equity round, with the venture debt-to-valuation ratios ranging between 6% and 8% of the company’s last post-money valuation (Source - August 2022).
SVB also actively markets accounts receivable lending to its startup clientele. With AR lending, SVB aims to address the problem of limited cash flow and long waiting periods for accounts receivable checks. To help startups through those waiting periods, SVB provides a line of credit for their client to draw from. Typically, these lines of credit are for the amount of money a startup has invoiced its customers.
Based on the contract in place with SVB (contracts can vary from client to client), the startup repays the amount they drew against their credit line 30-90 days after being paid by their customer. The creditworthiness of a startup’s customer influences the credit limit approved by SVB.
Silicon Valley Bank also offers a variety of commercial banking services, including
- Business banking (business checking, credit cards, fraud prevention, lending)
- Global business solutions (global banking services, global payments, foreign exchange risk services)
- Liquidity solutions (asset management, deposits, and investments)
- Global fund banking (private equity fund banking, venture capital fund banking)
How to Apply
To apply for funding or banking with Silicon Valley Bank, a business must first complete a detailed online questionnaire asking for personal and company information, traction status, current banking relationship information, and details on funding and service providers.
After reviewing the application, SVB assigns a banking team that specializes in the company’s region and industry. The client must then wait to be contacted by the bank to begin receiving service.
Capchase vs. Silicon Valley Bank
In addition to financing using venture debt from Silicon Valley Bank, founders and startups can work with Capchase. When compared to Silicon Valley Bank, Capchase’s funding model is designed to remove excess fees that can save clients up to 50% when compared to traditional venture debt providers (Source – June 2022).
It can be helpful to see the differences between Capchase and Silicon Valley Bank side-by-side. This is especially true for key areas like speed to funding, flexibility, structure & fees, and value add.
Speed
Capchase
24 hours to underwrite (led by a tech-driven & highly responsive underwriting system)
Silicon Valley Bank
Often long application & due diligence processes
Flexibility
Capchase
Highly Flexible: No traditional financial covenants on amounts financed
Silicon Valley Bank
Somewhat Flexible but still have set debt-to-valuation ratios
Structure & Fees
Capchase
Transparent & Simple: No prepayment fees, closing fees, warrants, or hidden fees
Silicon Valley Bank
Often include terms around prepayment, expensive closing process, warrants, admin fees
Value Add
Capchase
A prescriptive funding plan
Silicon Valley Bank
Discrete funding events
