3. Our Mission:
To increase our clientsâ
probability of success
Build Deep Relationships
Give Advice
Make It Easy To Do Business
With Us
Solve Problems
3 3
4. A Unique Financial Services Company
ďź Differentiated business model
⢠Focus on âinnovationâ markets
⢠Balance sheet lender
⢠Strong deposit franchise
⢠Diversified revenue streams
ďź Leader
⢠Leading market share
⢠More than 600 venture firm clients
⢠The bank for innovation companies
ďź Established (1)
⢠27 U.S. and seven international offices
⢠$20.8 billion in total assets
⢠$35.8 billion in total client funds (2)
(1) As of 3/31/12
(2) Total client funds includes deposits and off-balance sheet client investment funds
4
4
10. Silicon Valley Innovation Ecosystem
Credit
Providers
Venture Capital Entrepreneurs
Capital R&D
Markets Universities
INNOVATION
Service
Corporations
Providers
Government Experienced
Policy Managers
10
11. Components of Innovation Ecosystem
Venture Capital Credit Providers
ď§ Primary source of early-stage ď§ Facilitate growth and capital
risk capital Credit flexibility, and enhance returns
Providers
ď§ High risk/high return ď§ Provide leverage, prevent
Venture Capital Entrepreneurs equity dilution
ď§ Filter universe of startup
companies
Entrepreneurs
ď§ Business resources,
networks, and management ď§ Primary catalysts for
expertise innovation
Capital R&D
Markets Universities ď§ Risk takers
INNOVATION
Capital Markets
ď§ Liquidity for investors
and entrepreneurs Service
Corporations
ď§ Growth capital Providers
Government Experienced
Policy Managers
11
12. VC Ecosystem (Cont.)
R&D Universities
Corporations Credit ď§ Develop technology and
Providers IP
ď§ Technology
infrastructure and Venture Capital Entrepreneurs ď§ Fuel innovative ideas
corporate R&D ď§ Primary source of
assets technology experts
ď§ First customers of
many startups
Capital R&D
ď§ Strategic
Markets Universities
investments/
acquisitions INNOVATION
Service Providers
ď§ Legal, accounting,
PR, etc.
Service
Corporations
Providers
Government Policy
ď§ Favorable tax/ Government Experienced
Policy Managers Experienced Managers
regulatory regimes,
policies and incentives ď§ Effective leadership
ď§ Direct funding of R&D, investment ď§ Strong navigation skills
vehicles, and companies
12
ď§ Ex-Im Bank; SBA loans
13. The Innovation Ecosystem (The Funnel)
Innovation Sources
ď§ Government grants and
corporate investments
promote R&D
Universities Research Labs Corporate R&D Inventors
âStart-Upâ Companies
ď§ Companies financed by:
ďź Government grants
ďź Angel investors
ďź Venture Capital investors
Market factors filter economically
ďź âFriends and familyâ investors
viable businesses
VC Only ď§ VC investors help pick
the âwinnersâ
VC + Venture Debt ď§ Venture debt helps VCs
pick more winners
13
14. Revenue
Funding Sources by Development Stage
Start Up Early Growth Late Stage/Public
Public Equity
Private Equity
Bank Debt
Corporate VC
Venture Debt
Venture Capital
Government (SBA)
Angel Investors
Incubators
Family and Friends
University R&D
Time
14
15. Funding Sources: Debt vs. Equity
VC/PE Investors Collaboration/Risk Mitigation Venture Debt
⢠Select and fund innovation ⢠Expand runway
⢠Share experience ⢠Reduce equity dilution
⢠Provide strategic advice ⢠Lower cost of capital
⢠Establish discipline ⢠Expand knowledge &
⢠Mitigate risk relationships
⢠Support growth
Technology Companies
⢠Develop innovative
solutions
⢠Create jobs
⢠Fuel SME growth
⢠Foster economic growth
15
16. ELEMENTS OF AN
ENTREPRENEURIAL/INNOVATION ENVIRONMENT
⢠Perceived Opportunities
⢠Culture of Risk Takers and Respect for Failure
⢠Support Infrastructure
⢠Geographic Proximity and Networking
⢠Propagation of Knowledge and Skills
⢠Cooperative Competition
⢠First Class Educational System Encouraging Entrepreneurship
⢠Capital and Liquidity
⢠Rewards and Honors
⢠Repetition and Reinvestment
Hinweis der Redaktion
100% innovation/entrepreneurial focused & 350 premium wine clients50K start-ups since inceptionNo 50th largest bank in U.S.Public, mkt. cap $2.7 bil., 1,600 employees; 15K clientsHK personal background45 + yrs., in Silicon ValleyProduct cycles & Economic cycles â hardware, software now socialAll about relationships with entrepreneurs, investors and other members of our ecosystem (lawyers, accountants, i-bankers, etc.); networking & connecting
Silicon Valley Bank, provides the majority of our commercial banking activities and generates 95% of our revenues.We are a full service bank that works with clients from their very earliest stages, before they even have products or revenues, and helps them succeed at every stage of their life cycles.Over the years weâve built products and services tailored to our clients needs from start-up to mid-stage growth to larger corporate with hundreds of millions in revenues.We help U.S. companies get their footing in the UK and Europe, China, India or IsraelSet-up Global Gateway for inbound companies coming to U.S.We have SVB Analytics, which provides:Analytics and performance bench marking to our earlier-stage companies as well as stock option management and private company valuationsAt the bottom on the left, we have the Private BankOur target clients there are select venture capitalists, especially those top tier VCs with whom we want to further strengthen our relationships; provide investments, deposits, mortgages; Founders BankAnd finally we have SVB Capital, which is our funds management business, and is one of the fruits of our many years banking venture firms and their portfolio companies. We have over $1.5 billion worth of funds under management, most of it in venture-capital funds-of funds. Just closed our 5th. F-of-F @ $250 Mil. (Kleiner, Sequoia, Accel, Andreessen Horowitz)Our real differentiator there is that we can provide access to the very best venture funds for pensions, endowments and family offices.
From angel funded start-up to $1 bil+ public companyCorporate Finance segment, fastest growing, doing very well, 400+ companies today
27 U.S. offices6 Global offices (2 in India, 2 in China)Looking at Russia, Brazil and the Middle East
Events we host or are part of (SXSE, CEO Accelerator)Publications we offer (Start-up Outlook, Wine Industry Outlook)Places weâve been recently and why (Brazil, Russia, Ireland, future â Turkey, UAE)Global orgs we support (Tech City UK, Innospring)Products we have that others donât (credit, mezz, founderâs liquidity, first chip on credit card)Honors (Fortune, Forbes, KBW)We have a Sommelier and Concierge service in our wine division.
Depiction of the âfunnelâ of the innovation ecosystem in Silicon Valley. of VC funded companies, only 3 in 10 will be considered a success and only 1 a home run like a Linked-In or Facebook. Venture debt, something we do, helps finance VC-backed companies before revenues; runway extension to next VC round Result are âwinnersâ like Google, Cisco, PayPal, Facebook, Linked-In, Twitter
Capital by stage From âfriendsâ & âfamilyâ to IPO and everything in between. From âraw start-upâ to mature/public company. SVB in the early-growth-public categories.Today, per NVCA, from start-up to exit is 10.3 years. M&A â 90% IPOâs â 10% SVB works with all funding sources to include the âSuper Angelsâ and corporate investors (Intel Capital, 60+ in Valley Today, Best Buy, Nike, Ford, BMW)