
Silicon Valley Bank Launches In London To Bridge The Tech Funding Gap - iProject
http://techcrunch.com/2012/06/11/silicon-valley-bank-launches-in-london-to-bridge-the-tech-funding-gap/
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ig1
Bad article that shows fundamental misunderstanding of the startup scene in
London.

The tech funding gap in London isn't at the growth stage but rather at seed
stage (where SVB don't get involved). Once you're making money and you're
looking at growth funding there's plenty of angels and VC which would be
interested (and SVB provides a valuable alternative).

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swombat
That being said, most UK banks suck (having tried a few, I know), and I am in
fact seriously considering switching my company's bank account from Lloyds to
these guys, since presumably they are not ass-backwards retarded when it comes
to simple tech things that you expect in 2012.

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ig1
Probably the most useful thing SVB could do for seed-stage startups is to
offer painless merchant accounts structured with startups in mind (i.e not
requiring a 100k deposit if you're only going to be processing 30k in
payments, etc.)

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swombat
They don't list merchant accounts as part of their account services, but I
suspect that can't and won't be their main differentiator. After all,
BrainTree has now expanded to the UK (and I believe they offer accounts-with-
merchant-account-included), and surely a Stripe-in-the-UK clone (or even
Stripe expanding to the UK) is not far away.

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dawson
I had an investment meeting with them in their London offices late last year
and was given lots of [free] advice and support; confused re launch article as
they have been around in London for a while now, however, congratulations!

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axefrog
All the talk with regards to funding is generally focussed around either
bootstrapping with customer revenue from day 1, and/or taking funding from
angels and VCs. Where does Silicon Valley Bank fit into the picture? I've
basically never seen any blog posts, dicussions or articles advising of the
pros and cons of going down this route. Any suggestions or experiences to
share?

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swombat
A corporate bank's primary purpose is easily stated as: to help its customers
manage and raise money.

Traditionally, this has included both equity funding and debt funding. Banks
will help with public offerings, and with issuing bonds - or loaning directly
from the bank's cash pile.

Most established businesses use some amount of loans to "leverage" their
business. Some smaller (and even larger) businesses even depend on the loans
to operate day to day. However, startups normally don't get access to this
type of money, because banks see them as far too risky.

SVB presumably has its own custom risk models and procedures to deal with
startups, which enables them to loan money to startups even though most banks
wouldn't.

Why would a startup want to get a loan rather than raising some money? Because
borrowing money is about a billion times better/cheaper than selling a chunk
of the company, that's why.

This won't be replacing seed funding - that's always going to be too risky for
a bank, which needs most of its money to be repaid with interest - but for
startups with sustainable revenues and growth, SVB can presumably come to a
sensible analysis as to whether this company will be able to service its debt,
and so make a loan where a traditional bank wouldn't, in a growth funding
situation. And the startup would be stupid not to raise at least part of their
growth funding with a loan rather than selling more equity, if they can.

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ragmondo
Holy ripoff Batman. Check out their fees ! Sorry but they seem to charge for
just about everything you can do. I'm not expecting free banking service but
25 GBP/month just to have an account there ?? 2.75% for using the debit card
?! WOW !!

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swombat
Everything's negotiable... (at least, it better be...)

