by Jaclyn Diaz at npr.org
Silicon Valley Bank is now known as the biggest U.S. bank failure since 2008.
Before becoming known globally for its chaotic collapse, SVB was well-regarded among the tech community, which has a large presence around the San Francisco Bay Area.
The bank’s collapse has had a unique impact on the area, said San José State University Assistant Professor Matthew Faulkner. The school is roughly 10 miles from the bank’s headquarters in Santa Clara.
“We’re in the middle of it. You could feel the mania and the panic and the concern and the interest. It’s not uncommon to know somebody, whether you or somebody has money there, or whether their company has money there,” Faulkner told NPR. He teaches in the university’s accounting and finance department.
For those outside of Silicon Valley and the tech space, Silicon Valley Bank was not a household name. Many of its clients included venture capital firms, startups and wealthy tech workers.
For roughly four decades, SVB successfully competed with big name financial institutions — only to collapse in a matter of days.
Here’s a brief history of the now-defunct bank.
Silicon Valley Bank was started in 1983 after being conceived by Bill Biggerstaff and Robert Medearis over a game of poker, according to the bank’s own history from 2003. The founders’ goal was to provide banking services to tech startups in Silicon Valley. Their first office was in San Jose.
Faulkner said the bank’s focus on tech made in a “trailblazer” in that regard.
In 1987, the company began trading stock on Nasdaq. A year later it completed its IPO and raised $6 million in equity. The bank gradually expanded around Silicon Valley and then to the East Coast in 1990 with an office in Massachusetts. In the 1990s the company opened offices across the U.S.
After backing young tech startups during the dot-com bubble of the ’90s, the company narrowly avoided disaster when the bubble burst and SVB’s stock fell more than 50% in 2001, The New York Times reported in 2015.
SVB opened an Israel office in 2008 and a U.K. branch and a joint venture in China in 2012, according to the bank’s timeline. Other offices followed in Europe and Canada in the last decade.
It even expanded to capitalize on the ties between the tech community’s apparent love for California wine.