All articles tagged with #venture debt
The collapse of Silicon Valley Bank (SVB) is not expected to have any lasting adverse impact on venture capital deal activity, which has been declining since the beginning of 2022. While the failure of SVB may have a long-lasting impact on the banking and venture debt industries, lawyers and VC firms believe that any pause the news created for investors and founders has likely already passed.
Uncommon lending practices, including a heavy concentration of securities-backed loans, contributed to the spectacular and fast collapse of Silicon Valley Bank, raising questions about risk management by its executives and board. The bank's venture debt business may have also been problematic as tech and startup valuations fell. The bank's small cash cushion and rapidly ballooning deposits may have also contributed to its downfall. The bank is being investigated by federal prosecutors and the SEC, and investors are worried about the health of other U.S. and global banks.
The recent seizure of Silicon Valley Bank (SVB) by banking regulators has left a significant gap in the world of climate finance. SVB was a go-to bank for startups seeking banking services that understood the startup life and balance sheets, especially for those working on climate change. The bank had a strong and established business in climate, boasting 1,550 climate tech and sustainability clients. However, the climate space has grown up since SVB started, and that paves the way for new lenders to serve the market. Many providers are emerging to fill the gap left by SVB, and more institutions are building dedicated climate practices and funds to support startups emerging in this space.