Insights on erebor / startup banking?
Had previously been reached out to by the Pentagon’s office of strategic capital and was also looking into Palmer Luckey’s new bank, Erebor as a potentially interested direction for my career (currently in cov IBD , military) was wondering if anyone had insights as to what these roles would really entail since they are so new and if they’d be a good way to get my foot in the door within the VC/deeptech and growth ecosystem.
Based on the most helpful WSO content, transitioning into roles like Erebor or startup banking could be an intriguing move, especially given your background in coverage IBD and military experience. While specific insights on Erebor or the Pentagon’s Office of Strategic Capital aren't directly available, here are some general considerations for roles in startup banking and their potential alignment with VC/deeptech ecosystems:
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If you’re aiming to break into VC or deeptech, roles like these could be a strategic move, but ensure they align with your long-term goals and offer the exposure you’re seeking.
Sources: Intro to Investment Banking, Banking -> Startup PM on who SHOULD join IB, SVB Everywhere, All At Once | The Daily Peel | 3/14/23, Turing down IB FT offer to run my startup?
What role? If you're becoming a commercial banker that's very different than IB. Depending on the level of client interaction, yes you'd get more access to the ecosystem but unless you're moving your way up at Erebor, getting into VC would be a stretch for a company this late stage.
Currently at a BB that has fairly close interaction between CB / IB - are they really that different? Work with CB a decent amount and their junior workflows are so similar to ours - but I digress.
Felt like venture debt would still be a valid segue to VC/GE since the companies Erebor works with are earlier stage and in the deftech ecosystem pioneered by 8VC/A16Z.
The role with them would be pretty ambiguous at the moment, seems like a mix of gtm/commercial growth/origination and maybe a credit investing skillset more specific to the defense industrial base
Why don't you recruit straight for VC?
Think vanilla VC would be lame vs building a new bank that will be full suite of services for the companies I find truly exciting
Yeahhh becoming a loan officer and extending credit lines is definitely extremely exciting work
I am an Erebor client and long ago worked at a commercial bank. They have a very good platform, though with some occassional inconsistencies and issues (like almost any bank) The deposit base seems to have materialized nicely. As an RM/credit person you could build a great niche.
That said the brand and service only gets you so far. Any VC is already going to have a bank and there are switching costs. Most startups will too, and most will have balances that go down rather than up over time. That leaves actual capex / real estate underwriting.
There is only so far you can stretch the credit quality. Any startup doing a build out or working capital is going to be pretty speculative grade at best, and with VC's deploying as much as they are, some won't need to borrow. The best will have a dozen local credit unions and commercial banks looking to work with them. I don't know that the differentiated addressable market for a relationship manager there will be that huge. There are only so many deep tech/hard tech startups that will thrive, and only so many gun manufacturers that have been debanked by the big CIBs.
There are a lot of red-state manufacturing SMB's who might appreciate the platform and whatever improved service or terms they can get. That may be the consistent way to deploy all this capital without becoming a quasi-private credit shop overloaded with AI/defense capex risk.
I'd like to see them add a wealth management offering to capture more of the value in these markets
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