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Argentine technology companies lost their Silicon Valley friend bank


Born in 1983 in the high-tech heart of the US, Silicon Valley Bank helped most of the Argentine unicorns: it opened accounts at zero cost, did not charge transfers, discounted invoices and granted bridging loans.

Along the 101 South highway that connects the city of San Francisco in the US with Palo Alto, Menlo Park, Mountain View, Cupertino, Santa Clara and San José, are the most important technology companies in the world


Apple, Google, Facebook, Tesla, Oracle, Intel, Hewlett Packard, Skype, Uber and Airbnb are spread out in corporate buildings of at most three stories that compete in creativity, surrounded by parks and inserted in neighborhoods of chalets and impeccable sidewalks.

That area is called Silicon Valley and it arose because it also

contains NASA.

With its innovations for the space race, it was the mother

of the technological revolution along with Stanford universities and the most recent Singularity.

Silicon Valley is considered the

“second richest country in the world”

with a 2022 per capita income of $128,647, behind only Qatar, and ahead of Luxembourg.

Venture Capital Pioneer

In Santa Clara and at the dawn of the technological boom, it occurred to Roger Smith in 1983 to found the Silicon Valley Bank (SVB).

He was a

pioneer in venture capital

that companies without a history need to develop his projects.

An employee opens the door of the branch in San Francisco, California

Until its fall ten days ago, it was the 16th largest

bank in the US

, with $175 billion in deposits.

And in a world of low rates until the end of 2022 and in which there was plenty of silver, the SVB went from accounting for US$55 billion in deposits to US$186 billion at the end of 2022.

As it was too much money to put to work on loans, the SVB put it into long-term mortgage-linked bonds.

Its CEO, Gregory Becker, did not take into account the fall in prices in the midst of the rise in interest rates decided by the US FED.

Before long the SVB had to go out and sell those bonds and libertarians like Republican Peter Thiel

sounded the alarm by withdrawing their deposits.

The same was done by the fund with a birth certificate in Argentina, Kaszek Venture by Hernan Kazah and Nicolás Szekasy, the most relevant in Latin America.

The absence of regulations

The rest is known history and could have happened

in the absence of regulations for entities of its size.

For Argentines, the bankruptcy of this bank is a


They began dating in the late 1980s with Andy Tsao, the CEO for business in emerging markets.

One of the first was Lisandro Bril when he was in charge of the Hicks fund in the region.

Lisandro Bril, investor in technology

And Tsao, who worked in an office overlooking a tulip garden, knew how to recognize him

as a generous lender who helped our unicorns, from Mercado Libre to Globant

to name a few and even incubators with NXTP Lab.

“It was the only commercial bank in the world for technology companies.

He was betting on risk.

If the start-up was already invested by a fund, Silicon Valley Bank

would open the bank account at zero cost, not charge transfers, discount invoices, something unusual in the US

but that allowed Argentine companies to have an advance of funds for your projects.

And even more, it granted

bridge loans

to close transactions that usually take at least a month.

It was a bank tailored to technological companies”, described Bril.

In his vision, the fall of this bank shows a

run of the 21st century,

without queues for depositors but withdrawing their money with electronic transfers and implies a global crisis that affects technology companies from Argentina to Israel.

It hit global confidence.

Mind you, the Federal Deposit Insurance Corp protected deposits up to $250,000.

But many technology companies had a lot more and now they will have to wait for the sale of the bank.

Of the Argentines, they assure, they are all safe


Of course they have lost their friendly bank in Silicon Valley.

It's not little. 

Source: clarin

All business articles on 2023-03-25

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