Meet the investor: Erin Platts, Silicon Valley Bank
SVB has helped brands such as Wonderbly, Hello Fresh and Cisco. Here SVB UK's Platts - who was the bank's fifth employee - offers industry insights...
Firm: Silicon Valley Bank
Name: Erin Platts, head of commercial banking
Where are you based?
I’m based at Silicon Valley Bank’s UK branch – I grew up in New York and then worked at our Boston office, but I’ve been in London for almost 10 years now and it’s very much my home.
I moved here as our fifth employee to help set up the UK branch, which is now the largest office outside of the US with 170 people based here on Finsbury Square.
What kind of investor are you?
We are a full-scale commercial bank offering everything you would expect from a bank: cards, foreign exchange, treasury services and debt.
While we lend to companies of all life stages, including public and private corporates, we are particularly well known for our venture debt lending. Venture debt is a catch-all term, referring to loans that are tailored to the needs and the risks associated with fast growth, investor-backed businesses in technology, life science and the innovation economy more broadly.
What kind of deals do you finance?
We work with a real variety of innovative businesses seeking to do very different things. This could be early stage lending for runway extension, bridging a company from a Series A round of finance to a Series B. We are also active in providing debt for general working capital purposes, to help finance an acquisition or open an overseas office.
For example, we recently lent £30m to Alliance Pharmaceuticals. Alliance will use the facility to partially finance a £127.5m acquisition.
Another example is our work with money transfer service WorldRemit, which facilitates payments via mobile phones – predominantly in Africa – where its customers were previously carrying cash on long journeys. We help facilitate that work by providing cash flow to the business.
While traditional banks tend to look at a business’ track record, how much profit it makes, and the assets on its balance sheet, Silicon Valley Bank focuses on the creation of enterprise value, stemming from the underlying business model and/or technology, the management team, the investors and a deep understanding of the market in which the business operates.
Our goal is to help our clients increase their probability of success by swiftly delivering the tailored solutions they need and supporting initiatives that strengthen the innovation economy as a whole, including public policy initiatives, educational endeavours, and connecting businesses to partners and investors globally.
What type of companies do you lend to?
We are incredibly proud of our client base and have banked some of the most successful, well-known and pioneering brands in the world, including Cisco, Evernote and Mozilla. Here in the UK, we’re working with brands such as Hello Fresh, Farfetch, Wonderbly, The Hut Group and over a thousand others.
We lend to companies across all areas of innovation including life science, consumer and internet and enterprise software that all have the ambition and opportunity to become the future global leaders.
We tend to target companies that have raised equity from venture capital firms or similar institutional sources, as opposed to capital raised from friends and family.
We are also the banking partner for over 1,200 funds in the life science and VC sector including some top investors in the sector including Accel, Notion Capital and Highland in the UK, and Battery Ventures and Silver Lake in the US.
How do you source prospects?
As the bank of the innovation economy, we are fortunate to be pretty well known in the industry. The vast majority of our deals come through our referral network – great entrepreneurs, investors and intermediaries reach out to see how we can partner with them.
What are your USPs?
What Silicon Valley Bank is doing in the UK is entirely unique; no other bank here focuses solely on the innovation economy. Silicon Valley Bank’s core strategy is to grow along with these businesses in perpetuity.
This focus has provided the bank with the specialised ability to add value to clients in a way that is completely differentiated, and specific to their businesses. Namely, being able to fully understand what entrepreneurs need to build their businesses rapidly, and to help them navigate through every stage of the life cycle, from start-up to corporation.
What are the hot sectors?
Personally I’m excited about regulatory technology (regtech), we’re also seeing significant developments in artificial intelligence (AI), digital health and autonomous vehicles.
Three things a company should be able to demonstrate to a business lender?
When pitching to a bank, be detailed, be transparent and be open to different ideas.
For example, if profitability is far off, then a loan may be more suitable than an overdraft. If revenues are increasing, a line of credit may be suitable for covering working-capital needs.
The more detailed the financial information, the quicker and easier it is for us to assess how we can help you find the best options for your business.
What is the cardinal sin when looking for financing?
Having too fixed a view of any one financing product (eg. equity, term debt, working capital) rather than looking at the overall financing needs holistically, can be detrimental.
Equally, thinking in the short-term when it comes to financing needs, rather than picking a strategic partner for the long term, can make you lose sight of the fact that there are many ways to put together financing package, that provides a more efficient and scalable solution.
A great example of this in high-growth businesses is structuring working capital alongside venture debt and equity to result in a most cost – effective and scalable overall proposition.
What continuing involvement do you like with your clients?
Our approach is to be able to help entrepreneurs and their businesses move bold ideas forward fast. We can only do this in by working close collaboration but that differs by client.
Silicon Valley Bank focuses on creating an integrated client engagement model that ensures it supports and interacts with clients where, when and how they want, seamlessly.
The part of the role I most enjoy is when we have truly become an extension of the business and can provide support and value-add in areas that have little to do with banking and debt finance. We are often asked for help with respect to fundraising, finding talent, or geographic expansion.
What has been your best performing investment to date?
Our clients have had so many amazing success stories – that’s what makes my job so rewarding.
Recently I’ve seen so many great UK tech businesses and been particularly impressed with MADE.com, Darktrace, SecretEscapes and Trustpilot.