Wells Fargo lures Garretty from sabbatical

After two years building up City National Bank’s Palo Alto private banking division as senior vice president and manager, prominent Silicon Valley private banker Jeanette Garretty is leaving.

After almost 25 years in banking, Garretty was convinced to cancel a long-planned sabbatical to join Wells Fargo & Co.’s Private Client Services banking unit in Palo Alto with an offer she says she couldn’t refuse. She will serve as a senior relationship manager and private banker.

Previously, Garretty was a technology economist and private banker with Bank of America in Menlo Park.

“She has extensive industry contacts. Let’s just say we had to increase the capacity on our server to accommodate her Rolodex,” says Mark Bigley, regional private banking manager for client services at Wells Fargo.

Garretty says the fact Wells Fargo is locally based was a factor in her move.

“I really like that Wells Fargo is the No. 1 corporate giver in the Bay Area and is a big believer in the community,” Garretty says. “It’s a wonderful time to build strategy in private banking, It’s been a tough economy, but more and more people are looking forward and that’s what I want to help them do.”

Startup muscles into online ticketing market

Sometimes great things spring from humble origins.
Vendi Software Inc., which is operated out of a home office in Belmont, aims to crack the online ticketing market with its Web site, www.vendini.com.

That’s a market Wall Street analysts estimate is worth more than $10 billion annually in U.S. sales and is dominated by Ticketmaster, a unit of e-commerce powerhouse USA Interactive of New York, which had $4 billion in ticket sales last year.

Vendini is happy to live in Ticketmaster’s shadow by focusing on small community-based or independent theaters and performing arts groups, such as the Berkeley Symphony.

So far, Vendini says the strategy is working. Although founder and CEO Mark Tacchi would not release specific numbers, he claims the company is profitable and growing with 400 customers nationwide since it launched in November 2001.

To make money, Vendini takes a small percentage of each electronic transaction, determining charges on a case-by-case basis. Other ticketing companies take similar custom-set charges from ticket sales, but unlike Vendini, they also charge set-up or administration fees even if no tickets are sold by them.

“We’re not elbowing in. There is a huge opportunity there that Ticketmaster won’t touch. There’s this unspoken threshold where the accounts are too small for Ticketmaster to even consider,” Tacchi says.
Ticketmaster says that’s not really the case, but acknowledges smaller clients are not as profitable as big-name acts or larger arenas.

“It’s just basically our concentration has been with the larger venues,” says Ticketmaster spokeswoman Kandace Simpson from her Los Angeles office. “Don’t get me wrong, we do all size venues, but obviously most of our business comes from larger venues and larger clients.”

Ticketmaster aside, Vendini’s biggest challenge could be from companies such as Paciolan Inc. of Irvine, which does ticketing for the San Francisco Ballet as well as Stanford and San Jose State universities.

Paciolan claims it handles 25 percent of all U.S. ticket sales, putting it neck-and-neck with Concord-based Tickets.com for the No. 2 position in ticketing behind Ticketmaster. Tickets.com did not return calls requesting comment.

“Traditionally, we owned the college athletic market, performing arts, museums and attractions,” says Paciolan spokeswoman Laura Christine.
Privately held Paciolan started 23 years ago as a brick-and-mortar company to provide a full-range of box office staffing for nonprofit sports teams and arts programs.

“We do ticketing — not only Internet, but the back office and phone as well as box office. We do the entire infrastructure to sell your own tickets,” Christine says.

After receiving $20 million in third round venture funding in January, Paciolan has a total VC take of $35 million.

Armed with new IBM servers that allow it to process 100,000 ticket orders per hour, Paciolan says it is ready to capture big arenas and major league sports and take on the industry’s Goliath.

“We compete head to head with Ticketmaster now,” Christine says.
That’s a far cry from Vendini, which is happy to stick with the smaller venues and operates with a staff of fewer than 10. The company started with $4,000 and lots of programming muscle from its founder, a programmer himself, who cut his teeth by founding enterprise software company Hipbone Inc. of San Carlos in 1998.

“What I realized with my last company is VCs want things to move a lot faster. But when you’re building a product and a customer base, sometimes this takes time and it’s hard to show month-to-month progress. The whole VC dog-and-pony show is a big time suck,” Tacchi says.

He also says his company is hell-bent on keeping expenses low, opting to operate out of home offices.

“The most important thing for us is to keep operating costs low. With Tickets.com and Ticketmaster, their cost of operations are higher and it’s reflected in their service fees,” Tacchi says.

Vendini says that a successful ticketing company doesn’t require a branded Internet portal.

“This is the best business to be in. Tickets are consumable; they expire after a few days and people come back to buy more. It’s not like we’re selling computers that can last three to five years,” Tacchi says. “Our next step is we’re going to Canada.”

New software targets number crunchers

Campbell startup plans to help financial professionals manage their clients’ debt liability

Last year, consumer debt in the United States grew to record levels, passing $8 trillion according to the Federal Reserve Board.

One valley company sees a multibillion dollar opportunity as consumers may be unaware of cost and tax benefits on some debt, and increasingly rely on financial advisers for help.

FinancialCircuit Inc., a Campbell-based financial software company, says it has a tool that could help financial professionals help their clients manage their debt liability.

“Typically the financial industry is focused on helping clients with their assets. But everyone understands that actual net worth is your assets minus your liabilities,” says Adrian Nazari, CEO of FinancialCircuit.

He says his company’s new software product, called MoneyFind, which sells for a $70 monthly subscription, will help clients of banks, insurance companies and accountants cut costs in paying back loans.

MoneyFind can help save money by automatically auditing current loans to see if they are getting the best interest rates and tax breaks. It works by taking advantage of eased federal regulations that allow secure, encrypted sharing of financial data to scour 250 lenders to find the best rates for each loan to be refinanced.

FinancialCircuit, which was founded in 1999, has a hard task ahead of it to convince banks to compare loan costs to their competition rather than go it alone with their own software.

“Currently, we don’t put competitor pricing on our Web site,” says Bruce Cornelius, a senior vice president at Countrywide Financial Corp., which has Bay Area branches.

FinancialCircuit’s Nazari says traditionally many consumers do not shop around for the best rates on car loans and certified public accountants have had a hard time explaining to clients why smaller loans should be refinanced.

“We’re very strong in the CPA industry. We found in 1999 that many CPAs want to get into the financial planning business; they want more than just to do your taxes,” Nazari says.

One of those CPA firms is Vavrinek, Trine, Day & Co. LLP (VTD), which bills itself as the 77th-largest accounting firm in the United States.

“We get our biggest face-to-face contact with our clients during tax season and a number of them saw MoneyFind on our Web site and commented on it. There are similar products out there, but this is by far the easiest to use,” says VTD senior partner Don Driftmier from his San Bernadino office.

VTD says it has had MoneyFind on its Web site since November for customers to use if they wish.

“For our regular tax clients in the era of refinancing loans, it takes all of two seconds to figure out what your payment would be with a new loan. If you decide you want to do it, you can go all the way to filling out an application online,” Driftmier says.

“There are a lot of things people can use the Internet for and this is probably one of the more practical ones.”

Ask Jeeves sells off software unit for $4.25M

Ask Jeeves Inc. (Nasdaq: ASKJ) of Emeryville inked a deal May 28 to sell its search software unit, Jeeves Solutions, to privately held Kanisa Inc. of Cupertino.

Under terms of the deal, Kanisa will pay Ask Jeeves $3.5 million in cash and a promissory note worth $750,000.

Ask Jeeves says this move will allow it to spend more money on marketing and to focus on its core business, enterprise search, which made up 86 percent of the $25.2 million in sales it reported in the quarter ended March 31.

Kanisa says it will fold Jeeves Solutions operations, including some if its staff, into its existing customer service software offerings.

“The JeevesOne product is extremely strong and we look forward to working with the Jeeves Solutions team to serve the customer service needs of existing and new customers,” Kanisa CEO Bruce Armstrong said in a statement.

Both companies expect the acquisition to close by the end of July.

VC rebound hopes stagnate

Hopes of a major turnaround this year in the Bay Area’s once-thriving venture capital industry are not looking good.

A new report by Ernst & Young LLC’s venture capital advisory group shows last year both VC investments and valuations of startup companies fell to levels not seen since the mid-1990s.

But that doesn’t mean the VC industry is the same as it was back then.
Bill Reichert, president of Menlo Park-based Garage Technology Ventures disagrees with opinions that venture capital is at levels similar to 1995 or 1996.

“Both you and I know we’re not where we were in the mid-1990s. There is a huge difference between the absolute level of activity and the direction of activity. Clearly the fact [is that] the direction of VC investing is dramatically different and that means the whole environment is different,” Reichert says.

“Another big difference is that there were investment theses back then that people held on to fairly confidently and the problem is there is no investment theory that anybody is holding on to with any confidence whatsoever,” he says.

Ernst & Young says the VC industry will need an outside influence to act as jumper cables to get its engine running again — possibly the reemergence of the initial public offering market or a new emergence of a successful business model.

In the aftermath of the dot-com bubble, E&Y says the VC industry still hasn’t established a firm footing although there is an understanding with VCs that the industry needs to change.

Garage’s Reichert says some VC investors may sound confident about their industry, but that they are trained to do so, and it doesn’t reflect the real world.

“The reality is there is a huge lack of imagination, vision and confidence that there is any reasonable and solid investment thesis. Often you hear VCs are balancing their approach. That means instead of chasing after early stage deals, they’ve decided to go after deals that are generating revenues and are close to break-even,” Reichert says, explaining VCs increasingly will mix both kinds of investments.

He says investment strategy for many VCs has reversed their usual mode of operation as they no longer compete to be the first to invest in a startup.

“‘Last money in’ is the new investment thesis that you’re hearing a lot of,” Reichert says.

Some say early-stage investors have been burned too many times as they lose money when startup valuations at second- and third-round fundings fall.

“That’s been going on for a couple of years now. It’s not a new trend, but I don’t know how much longer you can have down rounds,” says Deepak Kamra, general partner at Canaan Partners in Menlo Park.

“Nobody invests in a first round thinking the company will be cheaper in the second round,” Kamra says.

“First rounds are dropping in both price and quality. Am I seeing a change in that? No,” he says.

Garage’s Reichert agrees.

“Very few [VCs] are willing to say they’ve abandoned early-stage companies. But practically speaking, there are a number who have.” he says.

There were 510 initial financings of startups in 2002, the lowest number in seven years, according to research by Ernst & Young and VentureOne. The silver lining is that 83 percent of that first-round money went to IT and bioscience startups, industries the Bay Area dominates.

The lower level of initial financings doesn’t concern one investment banker.

“You had more companies funded in the past than probably should have been,” says Rick Osgood, CEO of Pacific growth Equities Inc. of San Francisco.

He says the current crop of new startups will probably be more healthy than those funded during the boom years.

Garage’s Reichert says in the current market, huge VC fundings reliant upon billion-dollar IPOs will likely be replaced by a larger number of small deals, which still can provide reasonable returns on VC investment.

“Maybe that’s whistling past the graveyard, but that’s clearly what all of us are betting on,” he says.

No recovery seen in PC market during 2003

Despite higher sales forecasts, both corporate and analyst opinion is that a recovery in the desktop personal computer market may not happen this year or any time in the foreseeable future.
Gartner, a research firm, predicts worldwide PC sales in 2003 will grow 6.6 percent over 2002, keeping slightly ahead of global inflation rates.
And according to research firm ARS Inc., when businesses are buying, they are buying on the cheap. ARS research shows that for the same amount of money spent in 2001, companies can now buy a PC that is more than twice as fast and has four times the memory and almost four times the hard disk space.
Silicon Valley’s largest PC maker, Hewlett-Packard Co. of Palo Alto, says its PC unit is among its poorest performing businesses.
“Looking ahead we see stronger demand for notebooks versus desktop PCs, reflecting a shift toward mobility and the attractiveness of richly featured notebooks as desktop replacements,” HP CEO Carly Fiorina said in a May 20 conference call to analysts. “In the enterprise market overall, IT spending remains muted and there are no signs of a large-scale PC refresh cycle taking hold.”
Those comments did not go unnoticed on Wall Street, where analysts reflected upon corporate focus on return on investment (ROI) in technology spending.
“This is in line with our view that a fundamental change in the customer base to more ROI-sensitive, traditional corporations makes it unlikely that there will be significant spikes in PC demand as there have been in the past,” wrote Bill Shope, a New York-based analyst with JP Morgan Securities Inc., in a May 21 research note. “Overall, HP’s cautious comments on PC demand suggest that a broad recovery is unlikely to be a 2003 event. In addition, we believe that enterprise spending on servers is likely to be relatively stronger than PC spending throughout the rest of the year.”
Shope declined further comment. JP Morgan engages in investment banking for HP.
Desktop PC analyst Toni Duboise with ARS says with shrinking profit margins, PC makers continue to shrink away from the desktop.
“Absolutely. That’s why you have all of your major PC manufacturers focused beyond the box. This is no secret,” she says. “They are not making money on PCs anymore and they haven’t been making money on PCs for some time. That’s why they are investing in services and selling accessories. While we are in a beleaguered market and having economic woes, the real story here is that it is a PC buyers market.”

Media ownership proposals stir controversy

The last time federal regulators changed media ownership rules, a slew of deals altered the local television landscape.

Now regulators are looking into further changes that affect both TV and newspapers. Those proposals face opposition from such strange bedfellows as lobbyist groups the National Rifle Association and the National Organization for Women.

In the cross hairs is a Federal Communications Commission meeting June 2, at which commissioners will decide whether or not to relax rules governing consolidation among companies that own TV stations and newspapers in the same cities.

Under U.S. law, only an act of Congress or a federal court decision can overide the FCC in these matters.

Among the proposals are the following changes:

  •  Eliminate a regulation that bans the same company from owning both a newspaper and a TV station in the same market.
  •  Allow the same company to own as many as three TV stations in the same city.
  •  Allow big networks to buy one another.
  •  Increase the number of TV stations a single company can own.

The five-member FCC commission, which is controlled by three Republicans who usually vote in a bloc, is expected to support the drastic easing of many regulations.

According to a March 13 Standard & Poors research paper, broadcast companies already are strategizing mergers and acquisitions to take advantage of changes.

S&P says it expects any easing of regulations by the FCC could “fuel [a] transaction flurry” among media companies.

“Despite a lot of campaigning by … public interest groups, it looks like this thing is going to go through,” says TV analyst Rick Ellis of AllYourTV.com. “Although I think it’s going to be a short-term upside for a lot of shareholders in midsize broadcasting stocks, in the long term, I don’t think it’s going to be good for these companies.”

He says consolidation has been unsuccessful for AOL Time Warner Inc. and Walt Disney Co.

Other major media players are not looking to take advantage of opportunities from proposed FCC rules changes.

“From the newspaper side, you’re already starting to see some of the newspaper groups saying they aren’t so sure they’re going to get into TV because the stations are considered to be very over priced,” Ellis says.

The largest Bay Area-based media company agrees.

“We have no interest in owning TV stations,” says Polk Lafoon, spokesman for Knight-Ridder Inc. of San Jose, the second-largest newspaper publisher in the nation.

Locally, the company publishes the San Jose Mercury News and Contra Costa Times.

The National Association of Broadcasters, a Washington, D.C.-based lobbying group that represents most corporations that own TV stations, says it backs any changes that ease media ownership restrictions.
The biggest changes could come from consolidation of TV ownership in a single market.

The Bay Area already has seen some consolidation since 1999 when after a local test case, the FCC first allowed so-called “duopolies” where one company can own two stations at the same time.

At the time, Granite Broadcasting Corp. of New York, then-owner of KNTV Channel 11 in San Jose, wanted to buy Channel 20 of San Francisco.

fficials from Granite, along with the owners of the other major Bay Area TV stations, declined to be interviewed for this story.

Since that time there has been a domino effect of station ownership swaps and now the Bay Area has four duopolies (see box).

Under the proposed changes, things could change even more.

“You could have NBC and ABC owned by General Electric Co.,” says Chellie Pingree, president of Washington D.C.-based Common Cause. “If you don’t have a diversity of media ownership, there are fewer voices being represented, there is far less localism.”

Potential lack of diversity in local voices on both ends of the political spectrum has conservatives joining liberal groups in a chorus of opposition.

“When the NRA and NOW are on the same side of this issue, that tells you something. Either the planet has spun off its axis, or we’re right about this one,” Pingree says.

Despite funding shortfall, banks still make profits

Even though the valley’s startups are getting less money, some banks are still profiting from those uninvested funds.

Although venture capital funds continue to be flush with money, startup funding nationwide in 2002 was less than $20 billion dollars, down from $34.6 billion in 2001.

Analysts say no matter how money is spent or not spent, some bank out there is either holding it as a deposit or earning money from it.

“A favorite adage of Dick Kovacevich [CEO of Wells Fargo Bank] is, ‘Money never goes away, it just changes form.’” says Craig Woker, banking analyst with Morningstar research.

When it comes to venture capital funds, size can be deceiving since the firm probably doesn’t draw the full amount from investors in one sum.

When a VC fund raises capital, it rarely gets cash upfront. Instead the VC gets contractual commitments from investors — limited partners comprised typically of university endowments, insurance companies and state pension funds.

“VCs call upon their limited partners to draw down [funds],” says Stephane Dupont, a Bay Area-based group leader at Ernst & Young’s venture capital advisory group.

“The limited partners are either institutional investors or they are wealthy individuals. These people will prefer to have regular, but not frequent, calls for capital,” Dupont says.

Until those calls are made, those VC partner funds are usually kept in a semi-liquid form, which can easily be converted into cash — usually as some form of bank deposit.

The bank, in turn, leverages those unspent VC deposits to finance loans or other business ventures.

“Some bank is getting the money as a deposit, even if startups don’t get funded,” Morningstar’s Woker says. “The money has to be somewhere. It’s either at the venture capital firms themselves or else their partners are holding the money.”

Wells Fargo beefs up northwest territory

Sometimes small steps are the best way to get you where you want to go.

Making good on its promise to grow through small acquisitions in existing markets (see Biz Ink, April 18) San Fransico-based Wells Fargo & Co. (NYSE:WFC) says it will buy Pacific Northwest Bancorp (NASD:PNWB).

The all-stock deal, worth $590 million, will add 53 branches and $3 billion in assets to Wells Fargo, making it the fourth-largest bank in Washington state with slightly less than 7 percent of the market. Wells has 14.5 percent of the California market, where it ranks as the second-largest bank behind Bank of America Corp. of Charlotte, N.C.

This so-called “fill-in” buying allows Wells Fargo to give itself a bigger slice of the banking pie in markets where is it relatively weak.

“We grow our store distribution system in two ways — de novos [opening new branches] and strategic acquisitions,” says Wendy Grover, spokeswoman for Wells Fargo.

She says strategic acquisitions either take the form of “fill-ins” or extending its territory into markets that border existing Wells Fargo territory.

“The two methods are complimentary,” she says.

In general, Wall Street analysts see this as a positive move.

“Wells has been opportunistic with acquisitions and particularly has been looking to fill-in their franchise or enhance their presence in markets with above average growth prospects,” says RBC Capital Markets San Francisco-based financial services analyst Joe Morford.

RBC does not have an investment banking relationship with Wells Fargo.

“They already have a presence in Washington which, relative to Wells Fargo, is a smaller share than they have in other states,” he says.

Even though Washington state is suffering from the same dot-com bust economy as Northern California, Morford says Wells sees that market as a growth opportunity.

“So, this is a longer term investment; it’s still a good place to be. And here’s an opportunity to pick up $3 billion in assets and another 53 branches for what they consider a reasonable price.” Morford says.

That reasonable price of $590 million comes out to $35 a share for Pacific Northwest — a 23 percent premium over its $28.44 stock price at Monday’s close according to a May 20 research report from San Francisco-based Friedman Billings Ramsey & Co. Inc.

FBR says that’s a higher premium than other bank mergers in recent months, which average about 12 percent over market capitalization.

Since Wells can eliminate management and some back-end operations in the long run, it can afford the higher price tag, says RBC’s Morford.

“Fill-ins are the easiest transactions to do and carry the lowest risk and they are able to pay more for the banks because of synergies that they can realize,” he says.

But Morford will not rule out Wells being involved in a future big-ticket merger to expand its territorial footprint, which currently stops in the Fort Wayne, Ind. market, further toward the east coast.

Some analysts think Wells should target a big southeastern regional bank like SunTrust Banks Inc. of Atlanta.

“These rumors come up from time to time, but the price would have to be right before Wells would bite,” Morford says.

No deposit, no return

Banks diversify products and services to offset decline in deposits from dearth of venture capital

You would think that with venture capital funding falling precipitously during the past two years, banks would be giddy about the opportunity to jump in and fill the void. But truth be told, banks have been hurt from the parched flow of cash trickling into their deposit accounts.

A new study to be released after Memorial Day by financial auditing and research giant Ernst & Young LLP shows venture funding nationally falling 80 percent since 2000. And with fewer VC dollars funding startups, bank deposits also have fallen.

Deposit levels are important because banks make profits by charging banking fees. Deposit levels also are used by regulators to set the maximum amount any bank is allowed to loan to its customers.

“It’s a tough time for bankers these days and it’s forced commercial bankers to look upmarket at companies that are more established and in some cases these companies are already public,” says Stephane Dupont, group leader of Ernst & Young’s Bay Area-based Capital Advisory Group.
One of the companies changing with the times is Silicon Valley Bank of Santa Clara.

“Our strategy over the last couple of years has been to refine our focus so that we’re dealing with high-technology companies, life sciences and ultra-premium wineries and private banking of individuals who are in those markets,” says Marc Verissimo, chief strategy and risk officer at Silicon Valley Bank (Nasdaq:SIVB). “We are expanding our services to all technology companies, including those that are privately held and not venture-capital backed as well as public companies.”

Comerica Bank-California is a San Jose-based subsidiary of Comerica Bank (NTSE:CMA) of Detroit and is Silicon Valley Bank’s largest competitor in attracting VC-funded deposits.

“Venture capital funding is back to levels that we think are more sustainable,” says Jim Ellison, Comerica’s managing director of its venture capital operations. “We actually have not seen any real decline in our deposit base. I think that we’ve actually seen our deposits steadily grow.”

Ellison acknowledges a slight decline in VC deposits in 2001, but says overall deposits grew again from 2001 to 2002.

Ellison says with $53 billion in assets under management, Comerica has the ability to withstand short-term deposit losses.

Silicon Valley Bank, with less than $4 billion in assets, has little choice but to expand beyond VC-backed startups.

According to a forthcoming Ernst & Young report on 2002 venture capital, $19.4 billion in venture capital was dispersed in 2,056 rounds of funding last year.

That’s down from 3,034 rounds worth $34.6 billion in 2001 and $93.8 billion in VC funding in 6,101 rounds during the height of the market in 2000.

With its large exposure to VC-backed startups, Silicon Valley Bank saw its total asset levels steadily decline from 2000 and saw a bottoming out last year when deposits fell below $3 billion before recovering by year end.
“We avoided the dot-com boom as far as lending money, although we certainly took deposits from dot-coms and probably lost about $2 billion in deposits when those companies went away,” says Silicon Valley Bank’s Verissimo.

According to the latest report from the National Venture Capital Association, funding for the first quarter of 2003 was $3.8 billion nationwide, down from $4.3 billion in the previous quarter.
“Still, that’s a significant amount,” says RBC Capital Markets analyst Joe Morford of San Francisco.

RBC makes a market in Silicon Valley Bank stock and managed a public offering for the company in the past year.

“That’s where we were back in 1997 and while it’s certainly off the peak in early 2000, it’s a significant amount of money that’s being put to work each quarter,” he says.

Still, with a smaller VC market, banks look to innovation to grow in other ways.

“One interesting solution at Silicon Valley Bank is that they added services to their portfolio. They added an asset manager and they also added mergers and acquisitions services,” says E&Y’s Dupont.

Silicon Valley Bank says that’s been a key to their turnaround.
“About a year and a half ago we acquired Alliant [Partners of Palo Alto], which was a boutique mergers and acquisitions firm focused on the technology marketplace. That’s been very successful for us,” says Silicon Valley Bank’s Verissimo.

“In the Bay Area they used to have the four horsemen in Hambrecht & Quist, Montgomery, Robertson Stephens and Alex. Brown,” he says. “But they were all acquired by larger entities and their focus on the middle market has gone away,” Verissimo says.

Silicon Valley Bank also added Woodside Asset Management to its stable last year, adding private banking services to its portfolio.

“Our number of clients has remained flat even though the market has shrunk quite a bit. As for VC-backed companies, we’ve gained market share in that market plus we’ve been able to add non-VC-backed and public clients” Verissimo says.

At least one analyst says that strategy is paying off.

“I think Silicon Valley Bank has been able to hold their own through a combination of expanding market share as many of the other players have pulled back or gotten out of the business altogether,” says RBC’s Morford.
But don’t expect venture capital to be forgotten by banks.

“We’re not turning our back on VC-backed companies; it’s still a primary focus,” says Silicon Valley Bank’s Verissimo.

“Over the past couple of years, we’ve seen almost every other commercial bank get out of the business as far as actively doing this,” he says. “I’ve been doing this for 22 years and it’s a pattern that when times get tough, usually you have a smaller pie and not as many hands will reach in. The nice thing is you tend to lose a lot of competitors.”

“At the end of the day we are absolutely committed to venture capital; we believe that over time this will continue to be a driver in the American economy,” says Verissimo.