- At least five people have joined SVB's startup banking team in recent months, Insider has learned.
- The firm is beefing up its team to win over more early-stage startups in its commercial bank.
- SVB over the last year has hired dozens of bankers from top Wall Street firms.
Silicon Valley Bank is expanding its startup banking team with hires across the country to better serve companies at the earliest stage of their life cycles, Insider has learned.
At least five bankers have joined SVB's startup banking team since the start of the year. The new additions are meant to help SVB expand its geographic reach and focus on early-stage companies that have raised up to a couple million dollars, the group's head, Ashraf Hebela, told Insider in an interview.
"These are founders who say, 'I'm done putting my AWS bill on my personal account, and it's time to grow up'," he added.
Josh Grollman has joined as a startup banking director focusing on the Midwest and Atlantic region, according to his LinkedIn profile. Grollman was a tech banking vice president at SVB from 2018 to 2021 before a brief stint as head of business operations and people for the Zoom app Warmly.
Vice presidents Jaisa Gooden, Dimitris Kouvaros, and Beau Kraft have also joined the startup banking team, with Gooden and Kouvaros moving from venture-capital firms NOEMIS Ventures and Republic, respectively. Kraft was previously a fintech credit solution senior associate at SVB. Nicholas Jones, a former JPMorgan associate, is also joining as a vice president.
Hebela declined to say how many more hires he's hoping to make this year, but Atlanta, Chicago, and Austin are just some of the cities targeted for growth, he added.
The startup banking team, which sits within SVB's commercial bank, includes just under 100 bankers across the country. The group typically works with young companies up until they complete their Series A funding rounds. These new hires are meant to extend the team's reach into even younger companies.
As clients continue to grow, they'll be transferred to SVB's accelerator and growth teams that can provide services such as venture debt, global payments and FX, treasury management, private banking, and asset management, Hebela said.
Adding bankers to focus on startups that are in their infancy will help SVB better anticipate clients' needs as they grow, from making introductions to partners and investors, to advising them on M&A or taking their company public.
"When we work with startups earlier in their life cycle, we develop a deep understanding of their team, their business, their goals, and what they need to get them to the next stage of their business," Hebela said.
"As our clients grow, we are their partner at every stage, and we have built a reputation over many decades as a valuable and dependable partner for startups — both during their growth and success, and during the tough times," he said.
Funding in early-stage startups is surging, and that means more competition
Globally, private-equity and venture-capital investments grew to $2.7 trillion in 2021, up from $1.5 trillion five years ago, according to PitchBook data referenced in SVB's fourth-quarter report.
And that money isn't going all to late-stage success stories like Uber and Airbnb anymore, Hebela said.
"A good chunk of that, double-digit billions, is going into that pre-A world," he said.
Indeed, in an active segment of the startup ecosystem — financial-technology companies — money is flowing to young companies, according to CB Insights. The top 10 seed and angel deals in fintech in the fourth quarter of 2021 raised $257 million. And early-stage deal share, which includes investments through Series A, accounted for 64% of all funding in 2021 amongst fintechs.
As more money pours into early-stage startups, more players are trying to get into the game: Wall Street peers Wells Fargo, Goldman Sachs, and JPMorgan have beefed up their commercial banks in order to make relationships with startups earlier in their life cycles.
A slew of fintechs, including Square, Stripe, Brex, Rho, and Ramp, are also vying for more commercial business, while American Express launched a corporate card specifically for startups in late 2019.
While the competition has pushed SVB to improve its own offerings — like developing application programming interfaces for clients to use — the firm isn't trying to turn into something new, Hebela said.
"You don't out-Stripe Stripe or out-Mercury Mercury, but you also don't out-SVB SVB," he said. "We're not trying to become a fintech, but we are learning from them."
What sets SVB apart from competitors is the breadth of services it can offer, Hebela said. One example is SVB's private bank, which has grown thanks to an acquisition in July 2021 of Boston Private. Startup banking clients can also work with SVB's other business lines for help with wealth and investment management.
The startup banking team also gives clients discounts on cloud computing, accounting services, VC pitch session, curated events with other founders, finance and startup advice, and proprietary reports and peer insights.
Hebela is hoping his group can help more underserved entrepreneurs succeed with features like the SVB Innovators card, which has no annual fee or personal guarantee.
"Historically, there's a disproportionately large spike in value capital that's going to a select few companies and an entire graveyard of startups that never had a shot," he said. "We're doing our best to flatten that a little bit."
SVB's startup team is hiring across the country
SVB's newest hires are the latest in a series of pushes for expansion by the bank — which until the beginning of the month was known as SVB Leerink — over the past year.
The bank has added dozens of senior bankers from top Wall Street competitors like Bank of America, Citigroup, Goldman Sachs, and UBS as it continues to build out its already-competitive healthcare and technology investment-banking teams.
A core part of the startup team's growth strategy is hiring bankers in regional outposts across the country.
Grollman, the director, is based in Chicago along with Jones. Kouvaros and Kraft are in New York, while Gooden is reporting out of Atlanta, according to their LinkedIn profiles.
SVB is currently hiring startup banking associates in Atlanta and Washington, D.C., according to the firm's website. Austin, Miami, and Seattle are also priorities this year for the startup banking team's growth, Hebela said.
"Innovation is no longer a Silicon Valley game," he said. "Entrepreneurs are international as well as in these regions. There used to be a handful of companies in Columbus that piqued our interest, but now you have unicorns coming out with new innovation across the country."
Universities are increasing their focus on innovation, and entrepreneurs want to build things in their hometowns, Hebela said. While new technologies make it easier for startups across the country to reach bankers on the coasts, SVB wants boots on the ground to connect with founders and their roots.
"We want to meet you where you love, and our job is to serve you there instead of asking you to come over to another region where one considers to be more popular," he said. "What we're doing is extending our startup banking presence specifically to not select the few that are coming our way, but actually coming into a market and truly welcoming the economy that's already there."
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