More than many other banks, SVB catered to how risky tech start-ups and their backers do not adhere to normal business practices.
When Kleiner Perkins, one of Silicon Valley’s highest-profile venture capital firms, wanted to build a bridge between two of its office buildings around 2005, it decided to take out a loan. It turned to Silicon Valley Bank, just 43 feet away on Sand Hill Road in the heart of the venture industry in Menlo Park, Calif.
To make the loan work for Kleiner’s project, which cost more than $500,000, SVB agreed to lend the money against the value of the fees that the venture firm was set to earn from its funds, four people with knowledge of the situation said.
SVB also provided personal banking services to many of Kleiner’s top partners, the people said. That was in addition to the banking services and venture debt that SVB provided to many of Kleiner’s start-ups, as well as mortgages for those companies’ founders. SVB even invested in Kleiner’s funds, two people said.
And when SVB held an annual event in January on the state of the wine industry, it featured speakers from Wine.com, one of the world’s largest online wine retailers and a company that Kleiner had once invested in.