Silicon Valley Bank became the go-to bank for startups with a network of top-tier VCs. Underrepresented founders say that created barriers to access for them.
But some early-stage founders told Insider they had trouble getting access to SVB's services.When Yelitsa Jean-Charles sought working capital for her company, Healthy Roots Dolls, in 2021, she turned toLater, several of her investors connected her with officials at the bank, in the hopes that a warm introduction would smooth the process. By then, Healthy Roots had raised $1.
Though SVB was generally much more accessible to early-stage founders than larger banks, founders and investors said, it relied on close relationships with VC firms in order to vet the loan worthiness of founders. As a result, some, who approached the bank ended up encountering similar barriers as they did when seeking equity funding from investors.
Like Jean-Charles, Brian Alvarez-Bailey, the founder of Allison, which makes tools to connect fintech startups with community banks and credit unions, received a similar response from SVB when he applied for a line of credit in 2021. At the time, his company wasn't venture-backed. Jean-Charles and Alvarez-Bailey said they didn't believe bias or discrimination was at play in SVB's decisions — they simply didn't meet the bank's VC funding threshold.
"Their internal workforce was very diverse compared to other banks, so they could really connect with the community in that way," said Kange Kaneene, who heads SAP's accelerator program, SAP.iO Foundries, in North America, Latin America, and the Caribbean. SVB often worked with pre-seed and seed-stage founders when other banks wouldn't, she said.
Brasil Últimas Notícias, Brasil Manchetes
Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.
SVB's implosion leads founders to reevaluate VC relationshipsThe SVB fallout has been a wake up call for startup founders. Many are rethinking their VC relationships: 'There's certain people I wouldn't want to take money from now.'
Consulte Mais informação »
SVB Financial Group accuses FDIC of cutting it off from cashSVB Financial Group said on Tuesday the U.S. Federal Deposit Insurance Corporation had taken 'improper actions' to cut it off from cash held at its former subsidiary Silicon Valley Bank, which was seized by regulators to stem a national bank run.
Consulte Mais informação »
SVB parent accuses FDIC of cutting it off from cashSVB Financial Group said Tuesday the Federal Deposit Insurance Corporation had taken “improper actions” to cut it off from cash held at its former subsidiary Silicon Valley Ba…
Consulte Mais informação »
SVB Financial says FDIC has seized almost $2 billion of its deposits: reportThe parent company of failed Silicon Valley Bank cannot access about $2 billion in its deposits to the bank because the company's accounts were frozen by...
Consulte Mais informação »
'Operation Choke Point 2.0' may have contributed to SVB collapse: MulvaneyDonald Trump’s former Acting White House Chief of Staff, Mick Mulvaney, spoke of the rumored 'Operation Choke Point 2.0' suggesting it would hurt financial stability and may have contributed to the collapse of Silicon Valley Bank (SVB).
Consulte Mais informação »
Janet Yellen: SVB collapse is 'very different' than 2008 financial crisisTreasury Secretary Janet Yellen said the SVB collapse is 'very different' from the 2008 crisis and that the financial system is 'significantly stronger than it was 15 years ago'
Consulte Mais informação »