Hi WSO,
I've been researching this topic on Venture Lenders, such as Silicon Valley Bank (SVB), Bridge Bank, and Square 1 Bank, and I had some questions that I was hoping WSO could answer.
1) I was wondering what these institutions are classified as. Commercial Banks, Corporate Banks etc. I know the difference between the two is deal size, but I don't think Venture Lenders should be classified as either since they require very strategic thinking due to the fact that lend to companies with very little cash flow. Also, these firms provide debt products that covert to equity (sounds like mezzanine financing to me).
2) Where do analysts/associates go from Venture Lenders? Do they go into commercial or corporate banking at large banks such as JP Morgan, Wells Fargo, Citi, etc? Is it common for them to go into Venture Debt firms such as Hercules Capital/ ORIX? Or do they go into BDC's (Business Development Companies) like Ares/ Fifth Street? My assumption with a BDC is that the salary and returns are higher, also BDC's seem to be more analytical and deals are more complex.
3) Final question can individuals go into top 25 MBA programs from these firms? Is it common?
Apologies for the long list of questions. Thanks in advance
I worked at the main competitor to SVB/Square1/Bridge as an underwriter for a few years...
Commercial Banks. Just because you're working with companies with very little (almost always negative) cash flow, doesn't mean you're still not extending senior secured credit. Also, just to clarify, these banks (at least where I worked) never extend convertible debt. A lot of the deals do however have warrants attached them so the bank makes money if the borrower is acquired.
At my bank, most went into other lines of business within commercial/corporate banking. Despite working very closely with VC's, moving into that industry would be very difficult given that the skill set is very different. At the end of the day, you're still just underwriting senior secured loans.
Top 25? of course. M7 is a little more difficult.
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