Accelerating Innovation in the US June 2012
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Accelerating Innovation in the US June 2012
- 1. WAVELENGTH USA 2012 Accelerating Innovation June 29, 2012
- 2. Overview
- 3. Our Mission: To increase our clients’ 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 Differentiated business model • Focus on “innovation” markets • Balance sheet lender • Strong deposit franchise • Diversified revenue streams Leader • Leading market share • More than 600 venture firm clients • The bank for innovation companies 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
- 6. We Serve The Innovation Economy Technology Life Sciences VCs & PE Cleantech ~50% <15% < 10% Market Share Market Share Market Share 6 6
- 8. A Different Kind of Bank … 8 8
- 9. Innovation Ecosystem & Funding Sources
- 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 Primary source of early-stage Facilitate growth and capital risk capital Credit flexibility, and enhance returns Providers High risk/high return Provide leverage, prevent Venture Capital Entrepreneurs equity dilution Filter universe of startup companies Entrepreneurs Business resources, networks, and management Primary catalysts for expertise innovation Capital R&D Markets Universities Risk takers INNOVATION Capital Markets Liquidity for investors and entrepreneurs Service Corporations Growth capital Providers Government Experienced Policy Managers 11
- 12. VC Ecosystem (Cont.) R&D Universities Corporations Credit Develop technology and Providers IP Technology infrastructure and Venture Capital Entrepreneurs Fuel innovative ideas corporate R&D Primary source of assets technology experts First customers of many startups Capital R&D Strategic Markets Universities investments/ acquisitions INNOVATION Service Providers Legal, accounting, PR, etc. Service Corporations Providers Government Policy Favorable tax/ Government Experienced Policy Managers Experienced Managers regulatory regimes, policies and incentives Effective leadership Direct funding of R&D, investment Strong navigation skills vehicles, and companies 12 Ex-Im Bank; SBA loans
- 13. The Innovation Ecosystem (The Funnel) Innovation Sources Government grants and corporate investments promote R&D Universities Research Labs Corporate R&D Inventors “Start-Up” Companies Companies financed by: Government grants Angel investors Venture Capital investors Market factors filter economically “Friends and family” investors viable businesses VC Only VC investors help pick the “winners” VC + Venture Debt 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
Notas do Editor
- 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 – 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 we’ve 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 we’ve been recently and why (Brazil, Russia, Ireland, future – Turkey, UAE)Global orgs we support (Tech City UK, Innospring)Products we have that others don’t (credit, mezz, founder’s liquidity, first chip on credit card)Honors (Fortune, Forbes, KBW)We have a Sommelier and Concierge service in our wine division.
- Depiction of the “funnel” 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 “winners” like Google, Cisco, PayPal, Facebook, Linked-In, Twitter
- Capital by stage From “friends” & “family” to IPO and everything in between. From “raw start-up” 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 – 90% IPO’s – 10% SVB works with all funding sources to include the “Super Angels” and corporate investors (Intel Capital, 60+ in Valley Today, Best Buy, Nike, Ford, BMW)