When I moved to San Francisco, the quirky roundabout at 532 Market Street was a Sharper Image store full of plasma balls and tourists trying out massage chairs.
The E*Trade branch that took over the space closed a few years ago, but got a new tenant last August: Silicon Valley Bank. Sigh.
Downtown SF has not yet recovered from the pandemic, but this one has a prime location with high foot traffic. Hopefully a viable business will move in after Silicon Valley Bridge Bank closes operations.
But that’s just one street corner. The second-biggest bank failure in US history will reshape the startup ecosystem for years to come.
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Silicon Valley Bank was more than just a preferred choice for managing payroll and investor money: it also provided wealth management services, below-market home loans, and helped coordinate private equity sales. It was also one required choice for many customers whose contracts required them to “use the company for all or most of their banking services”, That reports CNBC.
So where does this bank’s collapse leave the tech industry? Who is most vulnerable, who benefits, and what are some of the long-term implications for VC? For more information, Karan Bhasin and Ram Iyer interviewed:
- Maelle Gavet, CEO, Techstars
- Niko Bonatsos, General Manager, General Catalyst
- Colin Beirne, Partner, Two Sigma Ventures
“We will probably see consolidation in the VC class,” said Gavet.
“It was already underway, but this is likely to accelerate it, as the SVB was also a leading provider of loans for GPs to gauge their capital investments.”
Thank you very much for reading,
Walter Thompson
Editorial Manager, businesskinda.com+
@your protagonist
Contents
The AI revolution has outgrown the Turing test: introducing a new framework
Image Credits: thememax (Opens in a new window) / Getty Images (Image has been modified)
A friend recently asked me to identify a block of ChatGPT text they embedded in an email. I could do it easily, but only because the passage was extremely boring and didn’t sound like them at all.
While generative AI exceeds my expectations, the Turing test is largely intact in my personal experience. But for how long?
Entrepreneur/investor Chris Saad says we need a new benchmark beyond Turing’s “simplistic pass/fail basis,” so he developed “a new approach to evaluating AI capabilities based on the Theory of Multiple Intelligences “.
Building a PLG movement on top of usage-based pricing
Image Credits: miguelangelortega (Opens in a new window) /Getty Images
Last July, Puneet Gupta, a former general manager of AWS who is now CEO and co-founder of Amberflo.io, wrote a TC+ article explaining how SaaS startups can adopt usage-based pricing models.
In a follow-up, he shares four tactics teams can use to collect, analyze, and use customer data to take the guesswork out of pricing decisions.
“When it comes time to make decisions about product packaging and pricing, the first place to turn should be the measurement pipeline for historical usage data,” he writes.
Time to Trust: Cybersecurity Questions Customers Ask and How to Answer Them
Image Credits: Thomas Hertwig/Eye Em (Opens in a new window) /Getty Images
Putting yourself in your customers’ shoes can raise uncomfortable questions, especially for cybersecurity startups, says angel investor Ross Haleliuk.
To help teams shorten the “time to trust” interval, he asks several questions cybersecurity customers are likely to ask when evaluating vendors, along with action points that can help provide compelling answers.
“It is important to keep in mind that trust is built over a long period of time, but can be lost in an instant,” writes Haleliuk.
Finding Your Startup’s Valuation: An Angel Investor Explains How
Image Credits: summart (Opens in a new window) /Getty Images
In her latest column, TC+ contributor Marjorie Radlo-Zandi explains how angel investors like her determine pre- and post-money valuations.
“As I assess future investments, I make sure it’s a product or service I care deeply about and educate myself about the company’s market,” she says.
“I want a fair valuation of the company and a well-defined market worth at least $100 million.”
Coming in hot is a great way to break up a meeting with investors. To help budding founders avoid waving red flags, she explains the Berkus method and explains why uninformed founders often seek unrealistic valuations.
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