The events with Silicon Valley Bank have been dramatic and concerning for the venture capital industry in the US and the UK. The EIS Navigator’s host, Brian Moretta, has spent much of his career analysing financial companies, so is uniquely placed to give insights on banking and venture capital in this solo episode.
Brian summarises what happened at Silicon Valley Bank. He outlines how the recent growth in deposits and a poor investment policy led to a bad outcome. He talks about the mistakes that management seems to have made. He then outlines what has happened to the US parent and the UK subsidiary.
He then goes on to talk about the immediate consequences for startups in the UK and the effect on investors. He also highlights some interesting knock-on effects in the US. Finally, he looks at the longer-term consequences, both what venture-funded companies should do and what might happen in the banking market to service them.
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Read Wikipedia on Silicon Valley Bank here.
Brian Moretta is the Head of Tax-Enhanced Research at Hardman & Co, and also covers financial stocks and investment funds. In addition to his role with Hardman & Co, Brian lectures on actuarial science and financial economics at Heriot Watt University, has been an examiner for the Faculty & Institute of Actuaries, and is on the Bankers without Borders Financial Modelling Reserve Corp.
Brian has had a 20-year career in Financial Services, including more than a decade as a fund manager. He specialised in analysing Financial Services companies at SVM Asset Management, as well as managing two traded endowment funds, an equity fund and working on hedge funds. Brian joined Hardman & Co in February 2013. He holds a PhD in Applied Probability and a BSc in Actuarial Maths and Statistics from Heriot Watt University.