Transcript: Greg Becker



The transcript from this week’s, MiB: Greg Becker, CEO Silicon Valley Bank, is below.

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RITHOLTZ: This week on the podcast I have an extra special guest. If you were at all interested in startups, entrepreneurism, lending, risk managements, venture capital, strap yourself in, this is a great one. Greg Becker, he’s the CEO of Silicon Valley Bank where he’s worked since 1993 and where he served as President and CEO of SVB Financial Group and Silicon Valley Bank.

Since 2011, this is really a wide-ranging and fascinating conversation for somebody who is right at the nexus of everything from venture capital to life sciences, to FinTech to you name it, but from the perspective of a commercial banker really located at the bullseye of the innovation economy not just in the United States, but for the entire world. I found this conversation to be absolutely fascinating, and I think you will also.

With no further ado, my discussion with Silicon Valley Bank’s CEO Greg Becker.

VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

RITHOLTZ: My extra special guest this week is Greg Becker. He is the President and CEO of Silicon Valley Bank where he has worked since 1993. Since 2011, he has been running the place, both as CEO of SVB Financial Group and Silicon Valley Bank. Greg was named to Worth magazine’s “Power 100 Most Influential People in Global Finance.”

Greg Becker, welcome to Bloomberg.

BECKER: Thanks, Barry. Great to be here.

RITHOLTZ: It’s really great to have you here and doing this live in person.


RITHOLTZ: So, when I look at Silicon Valley Bank, the question that comes into my head is, is this a bank that does some venture capital or is this a V.C. that offers some banking services?

BECKER: Well, we are a bank, so let’s just be clear about that. We’re a bank that — that caters to a very specific industry and then does a lot of things to support those companies in those industries. So, it’s about innovation companies all around the world. We start with them very early. We support them with commercial banking, private banking, investment banking, and asset management. So, all of those things fit together to help these innovation clients.

RITHOLTZ: So you’ve been with the bank since ’93, what was your first role there? How did you arrive at Silicon Valley Bank?

BECKER: Yeah, so I started out as a loan officer, so lending money to companies. And I just came from another bank that worked with more traditional companies. My manager, at the time, was leaving to join Silicon Valley Bank, and he encouraged me to join him and I did. And it was phenomenal. It’s been an incredible — incredible career, but I started out lending money to early-stage technology companies at Silicon Valley Bank in 1993.

RITHOLTZ: Now that sounds like a very high-risk sort of loan that typical banks don’t make. How do you go about vetting alone to a company that is brand new, is a startup, doesn’t have a long financial history? How does that process differ than traditional bank lending?

BECKER: Yeah, well, it’s changed a lot in 28 years. So, when you think about it way back when when I first started, the loans were much smaller. There were — you know, there’s not many choices for these companies, it was really lending money in a very — I’ll call it — more conservative way than we do today in venture capital. Those are the two ways that companies were — were financed.

And then today, when you think about it, it’s all about capital, debt, lending money. It’s about venture capital from all different sources. And so, how you go about lending money to these companies is it’s really about pattern recognition. It’s about understanding who the investors are. It’s understanding what market they’re in. There’s a whole series of things that we do, but we’ve been doing it for so long and adapting this lending capability that we’ve learned to do it really well and both safely, but also in a way that it’s hard for other people doing.

RITHOLTZ: So you’re there in the 90’s? That was quite an exciting period when everything was just going up, up, up. How did you handle the other side of that? When — when the dot coms imploded, what was the bank doing? How bad were losses and how did you manage them?

BECKER: Yes. So, when I think back at that ’99, 2000, 2001 time period, it was such an interesting time, and I’ll describe it as the highest of highs and the lowest of lows. In ’99, in the beginning of 2000, everything was going well. Everything was going well with our companies. They were growing so fast. They we’re getting started and going public within a few years. There was just such a euphoria at that time period. And then very quickly, kind of March of that year, there that was the Barron’s article that came out, and all of a sudden everything changed. And it went from everything was going well to everything was going poorly.

And what was fascinating about that time, you know, it’s actually my view. It’s the time when you built the best relationships. Going through difficult times with venture capitalists and with companies, you found out who you were as an institution. And so, as much as I don’t want to ever go back to that time period, there were a lot of good lessons learned at that — at that time period.

But yeah, we took losses. It was a challenging time for us. It took us a few years to get back into what I’ll call a nice growth mode back in that 2003-2004. But I look back at it. Finally, I learned — I learned a lot about the institution, I learned a lot about how to lend money, and I learned — learned a lot about how to build relationships at that time period.

RITHOLTZ: And — and if I remember correctly, the — the Barron’s article featured Howard Marks and was titled “Amazon.bomb.” Is that the — like January 2000.

BECKER: Yeah, I thought it — I couldn’t remember what month it was. It was either — I thought it was March, but it may be …

RITHOLTZ: Well, March was when the pre-announcements began. I don’t remember if it was Intel or Dell. Y2K pulled a lot of tech purchases forward.

BECKER: Forward.

RITHOLTZ: So, the first quarter was not surprisingly very light, and at those high levels didn’t take a lot to send that boulder down the — the hill. So — so that turned out as difficult a period as it was. That turned out to be very formative. I don’t know if that’s the right word, but certainly valuable for the bank and its relationships with all the various players in Silicon Valley. It’s the entrepreneurs. It’s the VCs. Who else is in that ecology that — that you had to deal with?

BECKER: Yeah, it’s all the professional service providers in the innovation business, so it’s the lawyers, it’s the accountants. And it’s — it’s really — during the difficult times is when you build your reputation. And that reputation that is what’s going to carry you through that next leg of growth.

I don’t want to go back to it. I can’t say during the middle of it, it was enjoyable, but again I do look back and say, we learned so much. And the relationships, still to this day, are still — I look back and some of my best relationships in the venture capital community were formed back in that time period, working through difficult situations because you had to. You had to work together to solve these problems. And it ended up, you know, being great for my career. It ended up being great for the institution.

RITHOLTZ: When did you see optimism start to return to early-stage investment post dot com crash?

BECKER: It took a while, it took a while. I would say in 2003, 2004, 2005, it was not one thing, it was really a gradual year by year it kind of picked up. And I — I can trust that versus the financial crisis in ’08-’09. In the innovation space, there was really only a couple of quarters where it — it — it took a pretty steep drop, and then it basically rapidly increased. So, 2010, 2011, it was a much more steeper acceleration …


BECKER: … than it was back in 2002 and 2003. So, I don’t think people realize that they look back at that time period that it was actually a better time to be investing, and so people invested more aggressively in the innovation space back in again 2010 or 2011, and I think that was a good lesson.

RITHOLTZ: So, you mentioned the financial crisis of ’08-’09, obviously, from — let’s call it March 2000 to either October ’02 or March ’03 that was very focused on technology and telecom, the financial crisis obviously was financially focused, but everything froze. Credit markets froze, capital flows froze. How did you guys manage through that? What was the impact of the financial crisis on the environment in Silicon Valley relatively soon after the dot com crash seven years later?

BECKER: Yeah, in the financial crisis and what I think about what happened, you know, we were impacted by it, and so we really were worried about how deep this was going to be and how long it was going to last, and so we started that we raise capital. We did a lot of things to be as protected as we could if this was going to last quite a long period of time. But again, what we were surprised by – I was surprised by how fast investing in the innovation market picked up, how fast venture capital came back and so we were bottoming out venture capital on the annual basis. It was done in that kind of $20 billion, $25 billion per year, dropped pretty significantly to that level.

RITHOLTZ: From — from what, how high was it before?

BECKER: Well, the highest amount historically up until the last couple of years was $100 billion invested in 2000. It dropped off dramatically and then it kind of worked its way back up and then dropped again in the financial crisis. And since the financial crisis it’s gone, you know, went from the $25 billion in the U.S. and it has been on a steady increase, and the last few years has been truly incredible in comparison.

Last year was $160 billion, $170 billion.


BECKER: And this year already, the first half of the year has been $180 billion in the first half. So, this year …

RITHOLTZ: The first half …

BECKER: First half …


BECKER: … of 2021 …


BECKER: … so it’s been an incredible first half the year.

RITHOLTZ: So I’ve seen people make the claim that there’s too much money floating around, that all this capital sloshing around, finds its way to companies and ends up overpaying, and you end up with things like we work last year and all the craziness with SoftBank, how do you look at the vast amount of investable capital in the system? Have people become too focused on — on early-stage startups or — or even pre-IPO companies?

BECKER: I’m not one of those people, Barry.


And it says that there’s too much — too much liquidity out there. And — and let me explain why. There’s a few reasons. One is people look back to 2000. I get that question a fair amount. Why it — help me understand why this isn’t just a repeat of 2000?

When you go back and think about 2000, I would first argue the size of the market that companies are going after is probably — I would historically say 10 times bigger. I would actually say it’s more like 50, 60, 70 times bigger than the market was back then.


BECKER: And technology is in every part of what our daily lives are all about. I would argue, when you think about the pandemic and our ability to get through this pandemic is a function of technology. And so, the Zoom of the world and our ability to work remotely and all the different technologies that supported that, but it’s also think about the health care, the vaccines, and how rapidly they came to market …


BECKER: … with Moderna and others is because money was put into these companies in prior years. So, the size of the market is much, much, much bigger. That’s number — number one.

Number two, the markets these companies are going after is — are so much larger in scale, right? It would be companies who will building software for industries or for companies to sell to industries, and now they’re building software to attack and completely disrupt entire industries. And you can see that in hotels, in taxis, and all the different industries. So, the size of the market is much bigger, so I look at this and say $180 billion in the first half of the year is a big number. I want to mistake that.

But in the whole scheme of global money, it’s still pretty small. So, my view is there’s — the liquidity is — is actually OK given the size of the market.

RITHOLTZ: Let’s start right with those two. What is the difference between SVB Financial Group and Silicon Valley Bank?

BECKER: Not much of a difference overall as we have a holding company and that’s the Financial Group. And then you said the holding company, we have activities such as investment banking and some of the investing that we do in venture capital firms and in technology and life science companies. It’s (inaudible) holding company. And then the bank itself, Silicon Valley Bank, is 90 percent of what we do as far as the publicly-traded company. So, they’re very similar. It’s just what activities spit in which business.

RITHOLTZ: And you say Silicon Valley bank, but you’re not like a traditional bank. We were just talking about branches, and tellers, and things like that. That’s not the sort of storefront you operate, is it?

BECKER: No, we are a commercial bank predominately. And that means that we work with companies. So, companies again, you know, it’s the startups that are being funded by families and friends, you know, people have ideas, and they’re raising $50,000, $100,000, and they’re starting a business. But they’re starting a business that is in software or the Internet or in e-commerce. It’s in those industries that we — we support, and that’s the business side of it. And we grow with them as they get larger and larger and, hopefully, they go public. They get larger, listed on a Nasdaq or they get listed on the New York Stock Exchange. That’s our model.

So, we don’t have tellers, we don’t have branches because so much of this can be done virtually. And so, when – again it helps when – you know, when you have a tragedy like the pandemic occurring, you know, we could still operate exactly as we had operated historically.

RITHOLTZ: So, I — I notice you sort of fund companies and bank with companies at different phases of their lifespan, startup banking, venture-funded, late-stage. Let’s start up with what is SVB startup banking.

BECKER: Yeah, so I’ll weave it into our strategy overall because I think it’s helpful in context. Our strategy is we want to bring companies in that are just getting started, so think about it like the top of the funnel. You want to bring in thousands of new companies each year, new companies that are being formed. And we’re talking about 6,000, 7,000, 8,000, 9,000 new companies per year.

We support them with banking services, getting them off the ground, giving them advice, making connections to investors, making connection to other service providers. And then we tailor our products to them as they raise their first round of venture capital financing or second round of venture capital financing. We’re lending the money in unique ways, venture debt. It could be acquisition financing, all different products and services deep in the F.X. capabilities as they go international. And then we support them with even greater capabilities as they go international, and they go public, and they’re doing hundreds of millions of dollars of revenue.

And so, our — our strategy is bring them in early and support them all throughout their lifecycle as they get larger and larger. That’s in a — in a nutshell, that’s what our — our strategy is. And to do it not just in the U.S., but to do it globally, to do it in the U.K., to do it in Europe, to do it in China, to do it in Canada. And that’s what we got to do, work with the most innovative, the coolest companies in the entire world.

RITHOLTZ: So, let — let’s put some numbers on that. Fifty percent of venture-backed tech and life sciences company in the U.S. bank with you, that’s a tremendous number. And then if we talk about those same sort of companies that have gone IPO, 69 percent of them in 2019 bank with you. So – so you guys really seem to have cornered this market. What are you doing to protect that giant lead?

BECKER: Yeah. I — I definitely don’t like the description cornered because that implies, in some ways, that there is a competition and you don’t have to wake up every day and kind of Andy Grove’s quite, “only the paranoid survive,” which is …


BECKER: … something we certainly adhere to. You know, it starts with really being relentlessly focused on helping these companies at all stages, figuring out what are the keys to their success. What I always talk to our team about, it’s that one piece of advice, it’s that one connection, it’s that one piece of help that can make the difference between a company being successful and not being successful. And you have to think about that every single day as you engage with and you work with our clients.

And it makes sense that when you have teams of people at SVB that this is all they do, work with companies that are in the healthcare industry, biotech companies or medical devices or software or cyber software that if they do that all day long and the next cybersecurity software walks in the door, their ability to point them in the right direction, to make interactions or engagements or connections, that makes such a huge difference. And so, we just have to keep thinking about that every single day. And that’s, you know, differentiating and it’s also what’s really a lot of fun.

If you believe you have helped the company, you go home at night, you feel pretty darn good that you’ve made a difference in a company that’s changing something significant in the world.

RITHOLTZ: Very impressive. Let’s talk about later-stage companies and — and public companies. Do you offer a similar suite of services? And — and how different is that from the very early-stage company?

BECKER: Yeah, it is — it is very different, but it is still again in that same commentary about helping them be successful. That’s what the product set is. That’s what the solutions are. That’s where all the advice and connection. So, we may bring some CFOs together or CEOs together. If the company is thinking about going public, well, let’s connect them with other CEOs who have gone through that process so they can get the advice about how to do that. Do you raise money before you go public or do you raise kind of all the money you need when you go public or after you go public?

Giving that feedback and that experience to other people going to that same thing, those connections are really, really, really valuable. But other things that are different, how much money you lend to them, the type of money, its acquisition financing. It could be large acquisition financing, it could be making interactions to P.E. firms who may want to take them private if they’re public already. So, it’s a whole suite of solutions that we give to these companies.

And again, I’ll go back to what I said, that’s the most important that’s the most fun part when you really do believe they’ve made a difference in that company.

RITHOLTZ: Very interesting. Tell us a little bit about open door. I — I love the story that everybody passed on them. What did you guys see in them that was so unique?

BECKER: Part of companies like an open door and — and there’s such a long list of companies that you put it, you know, put on that list that I think the biggest challenge for individuals to look at these companies and to really believe in them is to understand what they’re going after. And it’s very easy to say no. It’s very easy to list all the challenges and the reason that something may not work.

It is much more difficult to be that optimistic point of view and to say what if, what if they’re successful? What if they’re right? What if they actually go after this market, how big could this be? And then understanding, again, who the investors are, understanding the management team and their — and their drive for success.

All those things are ingredients. That really gives you that view of the potential for that business. And that — that’s what — I mean, honestly that’s the most inspiring part of what I get to do as a CEO, to see these companies, to understand where they’re going, to listen to the CEOs and the C-suites in these companies to see where they want to go — where they want to go and what they want to build is truly incredible. And that’s — that’s incredibly motivating to me, and I know it’s incredibly motivating to our team.

RITHOLTZ: So — so let’s stick with that, and before we describe how the open-door investment worked out, people should be aware that the vast majority of venture investments don’t pan out. This is a space where somewhere between 60 and 90 percent of the companies never really get off the ground in — in appreciable way. How do you manage that risk and how do you make sure that whatever that relationship is you’re not just burning through cash at a — a horrifying rate?

BECKER: So, there’s the investment piece of these companies, and then there’s the lending money to these companies. So, the investing piece is you — you have to have a few winners to make up for all the companies where they don’t. They don’t either realize their full potential or they outright fail. So, equity is very different than lending money.

Lending money, you don’t have to have as many winners to make up for the — for the ones you lose money on. You do have a higher loss rate, but because we, as a senior lender in these loans, we get repaid first. When you — when a company goes out of business, we get repaid as the company is winding down. That has certain protections to us. So, loss rates are still higher, but you can still underwrite them in a way that is different than the equity investors do. We don’t have the same upside and we don’t have the same downside.

RITHOLTZ: Right. So …

BECKER: So that’s a big distinction.

RITHOLTZ: … on the — on the lending side, if something doesn’t work out and you’re recapturing 80 or 90 percent of the loan, that’s a loss, but it’s not a total write-down.

BECKER: You’re not — you’re not writing everything off, right, correct.

RITHOLTZ: Right. On the equity side, if it doesn’t work out, that’s take it down to zero.

BECKER: It usually means that you’re going to take it down to zero, you’re going to take a complete loss, yes.

RITHOLTZ: And at the end of the open-door investment, you guys were the only ones who were willing to make that equity investment in open-door and ultimately, they end up going public with a SPAC. It’s a giant winner for everybody involved. That has to give you a lot of confidence that, hey, our due diligence process and our ability to both lend and make equity investments seems to be finding the right companies.

BECKER: So, the equity investors in that deal, we weren’t the only equity …


BECKER: … (inaudible) we’re the only investor. In fact, we were lending money to them, but the equity investors did very well in that.

RITHOLTZ: Don’t you get warrants on a lot of these small companies when you’re one of the early investors as well?

BECKER: Yeah, but it’s — Barry, it’s that really interesting distinction between equity investing where you get — you’re putting in tens of millions of dollars.


BECKER: You’re getting …

RITHOLTZ: Twenty, 30 percent (inaudible), right.

BECKER: … 20, 30 percent, right? When you’re lending money, think about it almost like getting a few stock options …


BECKER: … so for the upside. It offsets some of the losses that you will take overtime in the portfolio, but it’s — it’s — mainly, it’s a small amount of — of stock. When a company is really successful though, it can still add up to a lot of — a lot of money, and so we’ve seen that. Especially last year and this year, the warrant gains that we’ve had have been substantial, but the reason it’s more challenging is that when things are going really well, you have really low credit losses …


BECKER: … and your warrant gains were also doing really well.


BECKER: It looks really easy. When the market is more challenging, your warrant gains are nonexistent. You could be even losing money on your warrants, right? And you could be having a higher write-off rate. So it is — it is more cyclical up and down than people would believe. So, you — you really have to think about this under a long-term strategy.

RITHOLTZ: Companies these days are staying private for much longer. Tell us a little bit about your partnership with Nasdaq to help bring some liquidity to pre-IPO startups.

BECKER: Let me give you a little more context to be able to answer the question better. So, the big difference between private companies and public companies is access to information. They are — they are very, very, very, very different as far as what is known about a private company and what’s known about a public company. Public companies, you know, all the information. It’s all — you know, we all have access to the same information and knowledge. It’s, you know, very small margins on trading and all those things. Private companies, by definition, it’s more opaque, it’s more unknown about their financials and what’s going on, so buying and selling private stock if you could even find some has been a historical challenge.

What happens is as a company stay private longer, right, the issue for investors, the issues for the employees that are part of that company, you may have made on paper a lot of money, but you may not be able to get any of the liquidity. And so, you have to figure out a way, how can you keep these companies private longer to build additional wealth and still provide liquidity to the investors and still provide liquidity to the employees?

One way to do it is to create an exchange, an exchange for private company shares. And that’s what Nasdaq private market has been doing historically. They’ve done more than $3 billion of trading in private shares. And what we wanted to do pulling together this group, so it’s Nasdaq, it’s ourselves, it’s Goldman, Morgan Stanley and City is basically a consortium that comes together that all brings something valuable to create in a private exchange that is bigger, bolder, is more accessible to investors on the issuer side and on the investor side. That’s really what this is about. That’s why we’re excited to be working together.

RITHOLTZ: So, obviously, it’s a private exchange. It’s not open to the public. How big of a market is this? How big can it get? And who are the buyers and sellers in this private market?

BECKER: The sellers or the issuers are really the vast majority of private companies that have raised — maybe it’s a series C round, D around, so they’re — they’re more mature. They may be doing $50 million, $100 million, $200 million in revenue, right? And so, they may be two, three, four years away from going public.

And those companies — one is — you know, maybe they’ve been around for eight years, nine years, 10 years, so they want to provide liquidity for early investors or for employees. So, there’s the issuer side of it, so it’s a big market. The issuer side is a big market.

On the other side is the — the buyers, right, so the investors. It’ll mostly be the institution, mostly be the ones who are maybe coming into invest in these businesses once they become public and they want to participate two or three years earlier while they’re still private. So, a lot of the investors will be the same investors, but you could see family offices. You could see some accredited investors participating in that. And so, it is a big market on — on both sides, and that’s why we were excited to participate in this new joint venture with Nasdaq and the other investment banks.

RITHOLTZ: And the assumption is when you’re buying pre-IPO shares, you’re getting a discount from not only a couple of years of growth, but what the IPO evaluation might be.

BECKER: It depends, sometimes you’ll be getting a discount and sometimes the valuation may go the other way, right? It’s just — when people ask me the question about, it almost makes it seem like you’re guaranteed to make money because you’re investing before a company goes public. And obviously …

RITHOLTZ: That word “guarantee” is always so loaded, right?

BECKER: … yeah, it’s so loaded. It just doesn’t work that way, right? It’s — but it’s like when you buy a public stock. When you buy a public stock, you make an assumption about that stock. You believe it has upside and it will go up. Every stock that you invest in, Barry, does it always go up as every single time?

RITHOLTZ: Well, for me, yes but not for …

BECKER: For you, it does, but not for the average person?

RITHOLTZ: Well, actually — actually for everybody for the past couple of years.

BECKER: It’s gone up, yeah.

RITHOLTZ: It yields that way.

BECKER: It’s probably a bad — a bad time period.

RITHOLTZ: But — but that’s not what happens …

BECKER: Right, no.

RITHOLTZ: … in the real world over longer periods of time. And look, it was only a year ago we watched WeWork implode after a pretty rich up-round. So maybe it’s not that extreme of an example, but there’s no reason to think that a successful C-round or D-round company can have things go off the rails and the next round is appreciably lower.

BECKER: You asked me a question earlier in the discussion about, you know, how do we deal with this high loss rate. Remember — I mean, even if they get to a — a later-stage, a series C or D round and they — they are doing $50 million, $100 million on revenue, it doesn’t mean they may struggle. It doesn’t mean that they’re — they may not go out of business. They still may go out of business. So, it’s still — it’s a higher risk. You just want to give information and accessibility to these private companies so people can participate in it, the institutions and individuals. And that’s what’s unique about it, and that’s what we’re excited about.

RITHOLTZ: So — so you mentioned how much information is available for public companies. How do you go about doing your due diligence on private companies where you can’t just sit at a Bloomberg terminal or punch something into Google and find everything there is to find out about a company? What is that process like and — and how much energy, and time, and capital do you invest in it?

BECKER: Yeah. Well, it is a function of a couple things, right? One, it has to be the private company and what they’re willing to share. And then the buyer takes that information and they merry it with any comparables that you can make in the public market, and then you make assumptions, right? That’s why it’s — it is more difficult, right? It will not be ever be as transparent, as clear, and with information accessible the way a public market is, that’s why it’s still a private market. But you should be able to make certain assumptions.

So, let’s say if it’s a SaaS — a SaaS enterprise software company, well, even if it’s private, you have public comps that you then can apply based on the industry, the market, where it’s going, growth rates, all those things. So, you know, yeah, you have to do work as an investor, but it’s not — you know, it’s not as if there won’t be comparisons out there that you can make any judgment, that you can make — in order to make your assessment whether it’s a good investment or not.

RITHOLTZ: So, I’m doing my research preparing for this conversation, and I start working my way back through some of Silicon Valley Bank’s early relationships. They were Cisco’s first bank. I know the relationships with Apple, Intel. Tell us about some of the history and some of the companies SVB has worked with.

BECKER: Well, I’ll give you some of the history. I — I was not here at the time, but I’ll — I’ll tell you the — the — the — the story that goes along with it. One of our co-founders, a gentleman named Bill Biggerstaff, the story goes that when the two individuals that form Cisco started the company that he had given them a loan and he actually went to their house to actually give them a very, very small loan to help them, so the capital plus that loan got them started. So that’s — that’s one of — of many stories. It kind of — on our — in our history books that we like to certainly reference.

And — and I’ll give you another story is that one of the first acquisitions, if not the first acquisitions of Cisco did was one of my first clients when I was a — a junior banker at — at SVB called Crescendo. And John Chambers and I who know each other, we were talking about that — that story, and it was a great acquisition for them. It was a great client of mine. And it — it just — again, it’s one of the great things about the institution where you can go back and look at history about these amazing iconic companies that we were part of at the beginning. And that’s — it’s just a — it’s a great thrill to look back at that.

RITHOLTZ: So — so given that amazing history and — and all these now giant names, SVB has been kind of low key and I don’t know if media-shy is the right word because you’re here doing this, but certainly, you guys don’t advertise, you’re not in the paper all the time, you tend to be pretty low key. What’s the thinking behind that?

BECKER: Yeah. Well, from an advertising perspective, I mean, when I think of advertising, it’s mostly for consumers, consumer brands, and — and that’s not who we are. We are — we work with companies, we work with venture capitalists, we work at — with, you know, the healthcare space, the life science, and where we spend time. And it’s — really it’s about relationships and making sure we’re top of mind with them.

We’re spending time with those individuals. We’re spending time with the venture capitalists. We’re spending time with the entrepreneurs. That’s where our teams of people are. And we’ll sponsor things. We’ll host events. We’ll create events around that, but it’s not — it’s not in — in mainstream. It’s becoming more popular, it’s becoming more top of mind for individuals. But historically, it has been more low key to use your — your word.

RITHOLTZ: So — so let’s — let’s stay with the organization. You guys are publicly traded. You’re the CEO. How did you manage the organization? How did you run things during the pandemic when everyone was forced to work from home?

BECKER: Well, I — the simple way to describe it is make sure if you’re going to go through something like that, you get a really good team of people, and it starts with that. And no CEO is making all the calls. No CEO is, you know, using just their own thinking, their own decision-making process.
And so, number one, start with a great team, which we — we had.

So, as we started to assess the situation, it was thinking about our employees first and thinking about our clients. And shareholders, while important — always important, I want to make that not — you got to focus on the first two things. And so, when we thought about employees, it was how fast we can make sure that we’re taking care of them and protecting them. So, we went very quickly from a remote perspective, making sure we were supporting them with home office, home technology, capabilities so they could do what they needed to do and also take care of their families. That was first and foremost.

The second thing was taking care of our clients. So, when you see a shock like that, they’re worried about I don’t know what’s going to happen next. My crystal ball becomes very cloudy. I — what I don’t want to have to deal with is my banking partner kind of ringing up the phone or calling or emailing me saying, hey, your loan, pay back your loan or we’re worried about this. So, we gave our clients a lot of flexibility. And we’re paying our loans, holding off on making payments because we said we’re in this together. This isn’t your fault, you didn’t do this …


BECKER: … and so we should be working together to solve this problem to get through this.

And I — I look back at that and, A, it was absolutely right call. And B, we got a lot of great feedback from our clients and how supportive we were for them and how important that was to them. And as the CEO, you know, there’s no better feeling than getting those positive comments from your clients that you really took care of them and the same thing is true with the employees. So, I think we weathered the storm really well. And — and again, our target market — this innovation economy bounced back so quickly that we were fortunate to be in the right space as well.

RITHOLTZ: So here in New York, there is drumbeat from a lot of big companies. We want to see their staffers back in the office, but there’s a little resistance. Some of it is by sector, some of it is generational. What are your plans for — let’s talk in the fall, does everybody come back to the office? Is it a little more of a hybrid situation? What — what is the plan for Silicon Valley Bank post-pandemic if I can dare use that phrase?

BECKER: Yeah, they — first, it goes back to what I just said, which is you got to take care of your employees first, right? Safety is the most important thing. And as much as we want to get back together, we want to socialize, we want to connect, we want to make sure that people are safe. And there isn’t, you know, enough impact on their — on their families as well. And so, we — we need to be first sensitive to that. So, what we’re doing right now is we’re doing some trials, testing things out, bringing some people back and seeing how it operates, seeing what technology we need to adapt to in this new flexible environment, which we’re going to, so we would’ve make sure that, first and foremost, our employees are safe.

Second part is that they’re taking care of our clients, and they’ve done a great job during the pandemic. No reason to think that it’s going to slow down or they won’t continue do a great job for our clients, but it’s really the combination of those two things. And so, we’re doing a lot of surveys, listening to our employees. And what our employees want is they want flexibility. And so, the future work at SVB will be to provide a more flexible work environment.

We’re redoing a lot of our offices to create more flexibility. We’re allowing more support to have them build their home offices so they can work from home. So, I think we’re going to have a lot of people that are going to be coming in a few days a week, but the vast majority will not be coming in five days a week. We think it’s better for employees, and we think it’s better for our clients.

RITHOLTZ: That’s interesting. I’m — I’m kind of fascinated by let’s talk sector by sector. A lot of finance was able to work remotely, a lot of technology was able to work remotely. There are certain businesses, travel, entertainment, hospitality that physically have to be — be there. You’re doing a little bit of business travel. You’re here in New York from California. What do you see as you travel around the country? Is California, because of the tech heaviness, more open to a hybrid model? What — what are you seeing from your perspective?

BECKER: Yeah, I think technology companies are definitely more open to high-bred. They’re much more open to working remotely. They’re more open to being flexible. Part of it is — is that, you know, you have a skill, a contribution that can be made. And if it’s computer programmers or sales support or whatever you want to call it, that you can be more — more remote.

The more a business or industry has an apprentice model, the more being in person like that’s going to be even more important. So, it — it — it depends upon what the needs are of the — of the business. So, technology companies by definition are going to be more, more flexible.

We’re — we’re somewhere in — in between. We’re not — we’re somewhat of an apprentice model, we’re not a full apprentice model, so we can be in that middle ground of not requiring everyone to be back, but also not having everybody be flexible wherever they want to work. And I think that’s going to be the right balance.

RITHOLTZ: So, I think of Silicon Valley as a place, but if you have a lot of people working remote, well, there’s really no latency difference between Colorado and Palo Alto. Do you run the risk of losing that nexus of intellectual capital all in — in one place if people are scattered to — to the four winds and don’t have to be in on a regular basis?

BECKER: So, I’ll break that apart to two answers. One is the technology in the life science industry, and then I’ll just speak for — for our business. On the tech and life science area, Silicon Valley has been there for years, the people have said is Silicon Valley going to fall apart? It’s expensive, it’s all these things are going to be more of a challenge, and other markets are going to pick up the pace and be more competitive.

And — and in my view is while other markets are going to do better than they have historically, right, New York, and Atlanta, and Chicago, and Denver, and — and Austin, and Seattle are going to continue to do better, it’s not going to be at the expense of Silicon Valley. Silicon Valley from my standpoint will continue to thrive. It will still be, at least from my lifetime, I believe, the innovation capital of the world. But innovation is everywhere. And so, it makes sense that these other markets are going to still do really well. They’re still going to get more innovation jobs, innovation companies in those markets. And so, I believe kind of all boats will rise not — there’s not going to be a zero-sum game the way I think too many people think about.

For our business, we do have a lot of interaction. We do have offices all over the country, and so we want to make sure our people are close to those hubs, so when they do come in that they have access to engaging with our other teammates that allow them to learn and develop and build relationships, and all those things, so that’s one thing.

The second thing is if you’re a client-facing individual, you obviously have to be in the market or your clients are. And so, that — that isn’t going to change. If your — if your clients are in Northern California, you can’t live in Nashville. You can’t live in, you know, Austin, Texas if your clients are in the Bay Area. So that obviously is one important, important function. But we believe it’s a — it’s a balance of apprenticeship, as well as you can do things remote as well.

RITHOLTZ: Let’s talk a little bit about fintech since that covers a little bit of both the areas that you guys play in. It’s obviously been a huge area of growth over the past decade. What are you doing to stay ahead of the curve? How do you make sure after helping all these disruptive companies that you yourself don’t get disrupted?

BECKER: Yeah, I’d say it’s — it’s both a — a blessing and I wouldn’t call it a curse, but I would say a blessing and a challenge to be so close to the innovation market in these FinTech companies because you see how fast they grow. You see how fast the adapt. And so, there’s a — there’s a paranoid part about that, but I think that helps us, as an institution, realize that we have to keep pressing ahead, that we have to be bold, that we can’t wait for things to happen, that we need to try new things.

We have an innovation team. We’re investing in new businesses. Maybe it can’t be part of our core competency inside SVB, but we can invest in those businesses and provide those solutions to our clients. So, I — I believe it’s actually we can benefit from it and we can benefit from a — in a business, but we can also benefit it in supporting our clients because we know we have to innovate.

So yeah, we spent a lot of time. We have a national FinTech practice, and so we work with many, many, many FinTech companies and support them in payments. We support them in warehouse lending when they’re trying to do loans themselves to consumers or loans to small business, so we support them in a variety of different ways. And kind of every day that goes by, we’re forgetting about what’s the next thing we can do to support them.

RITHOLTZ: Let me throw a curve ball at you a little bit. Wine, you mean wine business, why is Silicon Valley Bank? I know you work with life science and clean tech, and venture capital, how does wine fit into that business other than the proximity of Napa and Sonoma to — to where you guys are?

BECKER: Yeah, maybe I could claim it’s a life science connection because (inaudible) …

RITHOLTZ: Sure, right, exactly.

BECKER: … the health benefits. It’s actually historical in — in the sense. When the bank was first formed back in the early 80’s, we did some innovation, so whatever technology was back then in the — in the 80’s, semiconductor companies and some networking companies, and then we did general commercial industries in real estate. And then we also did some, you know, private banking back at that time as well.

And so, over time, when we were doing commercial industries, we’re doing commercial real estate, what we realized is that maybe we weren’t as good as we thought we were at it, and so the real estate crisis in the late 80’s, in the early 90’s …


BECKER: … we said maybe that’s not something we should be doing, but we’re pretty good at this technology stuff.

So, what happened is we kept whittling down what we are really good at until we ended up in the late 90’s of technology and life sciences. And we had this one business, premium wines in Napa and Sonoma. And it was a really good business. But — well, there’s a benefit to it. It’s actually it’s great marketing and it’s great connectivity. And if relationship building is so important …


BECKER: … as it is, you can leverage those clients, those winemakers and those relationships. And you can create connectivity across your client base in a really unique way. So, we said it’s a great business, it makes the rest of the business better, so let’s keep it. And it’s been — it’s been really nice to have. And we host events up in Napa and Sonoma, and we help those winery clients sell more of their product to our technology and innovation clients. So, there’s a really good match between the two.

RITHOLTZ: That makes a whole lot of sense. And I am a giant fan of Napa Valley Cabs. They — they …

BECKER: Come visit (inaudible) come out and stop by.

RITHOLTZ: … I’m — now that traveling is reopening, it’s absolutely on my — a list of things to do. As much as everybody claims to hate business travel, you miss occasionally getting out on a — on a trip like that. The last conference I was in, in San Francisco, ended with a bunch of us heading up to Napa for a couple of days. Ad, you know, after three days of panels and that sort of stuff, it was a great break. It’s a little bit too long of a flight to just go for a conference for a couple of days, so it became something fun. I could see how having Sonoma, Napa Valley in your backyard is a great multiplier for all the other businesses, how that connection can really work.

BECKER: It is. And — and much like we have in healthcare, and — and technology, and software, and all those industries, we have experts that this is what they do kind of 24/7. Our wine group, they’re experts in this industry. They really are — are viewed as being the smartest people in understanding these industries. And — and that’s the way we approach investment banking. That’s the way we approach private banking. We want to be the best — the best people, the most knowledgeable people in giving advice in the industries that we serve. And I think the wine group is just another example of that.

RITHOLTZ: SVB’s reputation is that it understands startups like very few banking institutions. Those relationships are a giant advantage that — that you’ve had for a while. How long can you maintain this lead? Is this something that’s specific to you? What are you doing to stay competitive as more and more financial institutions look at Silicon Valley and say we want to muscle our ways into that space?

BECKER: I look at it this way, Barry. You can take a defensive posture or you can take an offensive posture. We are taking an offensive posture, meaning, the way we keep our relationships, the way we continue to do what we’re doing is you don’t look back and say what can we hold back from our clients, what can we — how do we create more of a moat around them.

It is actually you end up doing a better job of providing one-stop-shopping, all the products and services. So, you go — it’s like the reason we did the acquisition of — of Leerink Partners and we’re building out our investment bank is to add more value to our clients. The reason we acquired Boston Private was to add more private banking and wealth management capabilities. The reason we acquired West River Group is to make sure we can lend even greater sums of money and higher risk type of lending to them.

All those things are — my view is you could say it’s being defensive. I don’t view it as being defensive, I view it as — view it as being on the offense to take care of our clients no matter how big they get, no matter whatever they need from a financial solutions perspective. We want to be there for them. And I think we have to think about that every single day.

We can’t take our relationships for granted. We have to win those relationships back every single day. And if every employee thinks that way, that’s where I think we’re to continue to be the winning solution for these companies.

RITHOLTZ: That sounds really like — like the right strategy. I know I only have you for a few more moments, so let’s jump to our favorite questions that we ask all of our guests, starting with tell us what you’re streaming these days. Give us your favorite Netflix or Amazon Prime, whatever is keeping you entertained.

BECKER: Two things. One, Ted Lasso. Love that show. I’m glad it came back for Season 2. It’s just — it’s such a great story line, and it’s so funny. It’s — that’s awesome.

The second one, during COVID, my wife and I and family, we watched a ton of anything David Attenborough, anything David Attenborough about, you know, the earth and climate and, you know, it’s the oceans. I mean, it’s — the — the visual part and the — just how fortunate we are to have the earth that we have and how we all need to do a better job of protecting it. Those are the two biggest things that we — we stream.

RITHOLTZ: I’m trying to — I’m googling while we speak, trying to look up the name of the newest show that he just came out with. And I’m drawing a blank on it. Was it Life on Earth again? Life on Our Planet.

BECKER: Phenomenal.

RITHOLTZ: He has like the perfect voice for narrating that sort of stuff. I’m — I’m a big fan as well. So, tell us about your early mentors, who helped to shape your career.

BECKER: Yeah, it’s — you know, being in — in financial services as long as I have been and being at SVB for 28 years, a lot of my mentors have been here at — at SVB. And actually, one that was even before that — so Marc Verissimo was an individual that I managed — I worked with at another bank before I joined Silicon Valley Bank, and he’s the individual that brought me over.

You know, Mark was great about, you know, basically inspiring you to think differently, inspiring you to — to just kind of trying new things, and giving you the autonomy, giving you the responsibility to fail. It’s OK if you fail, what did you learn from your failure? And so, Marc was one.

My predecessor, Ken Wilcox, would definitely be a — a second mentor in addition to giving me incredible opportunities, which I greatly appreciate. He was so — what was so important him was leadership principles, and he taught leadership principles to meet leadership principles to the rest of the executive team about casting your shadow on how important that is about decision-making process. All these things that even to this day I think about, maybe not on a daily basis, but I think about on a regular basis, and so clearly, he was inspirational.

And the last person was a gentleman named Bob Samuels who was an executive coach of mine for a number of years. I learned a lot from Bob. But the one thing, in particular, was how important empathy is, how important empathy is to understand clients, how important empathy is to understand the people you work with, understand kind of everyone else and, you know, not faulting people when they have one of a certain point of view because that’s how they feel. And you can’t take away how people feel about something. That’s what they own. And understanding that and being empathetic to that really allows you to connect with people and, in my view, is in a very different way. So those are a few of the many mentors that I — I have had over the years that have really helped shape my career.

RITHOLTZ: Let’s talk about everybody’s favorite question, books. Tell us some of your favorites and what are you reading right now?

BECKER: Yeah, the — the one I described to our team at the bank for many, many years is this book called “The Boys in the Boat,” and it’s actually timely because of the Olympics being around and it’s set back in the — I don’t want to say the 30’s and the 40’s. And there was a team up in Seattle. There was this individual who came from nowhere, and working together as a team in the eight-person scull up to win in the Olympics in — in Germany. And it’s about team work. It is about the feeling when you’re part of a great team, how important that is and how impactful it can be. So that — that’s a great — that’s a great book.

The other books that I have — I have read recently, “The Pacific War 1941 to 1945” and the most recent one, which kind of fits in that same genre is a book called “2034.” And it’s about a future war between the U.S. and China, and how bad decisions — small bad decisions can create something very significant. You know, to me, the — the war books are about strategy. It’s about tactics, it’s about human nature and — and lessons that we can all learn from them. So those are a few of the things that I’ve been — I have read that I like and I’ve been read — read recently.

RITHOLTZ: Quite interesting. What sort of advice would you give to a recent college grad who is interested in a career in either banking or lending or venture investing?

BECKER: Yeah, I would just advice in general, and I’ll just — I’ll talk about advice in banking and finance. And first of all, I think it’s an incredible career. I think any time you can really understand how businesses operate and get exposed to a variety of different businesses, the way, you know, commercial bankers do the way investment bankers do, I think that’s an incredible skill, it’s incredible knowledge to be gained, and it will allow you to be successful, in my view, no matter what you’re doing. If you want to stay at it as a career or if you want to leave that as a career and then going to a business where maybe you’re a CFO or you’re a finance person, I think all those things are — are great to learn. So, I wouldn’t — I wouldn’t say less about lessons on that part, I would say it is a great career. So, if you get a chance, you know, go for it, do it. I don’t think you’ll be disappointed.

Advice in general that I give to college grads, and I’ve got — I’ve got two kids that have just graduated from college the last couple of years, and I have three kids in college. And so, I do spend a lot of time thinking about — about this and — and — and talking about it. Whether they take my advice or not, I don’t know, but I certainly am happy to share.

So, one is I think too many college kids, when they graduate, think that they’re going from this place of happiness and joy in college to I’m going to work for the rest of my life and it’s going to be miserable. My biggest piece of advice is if you don’t find joy in what you do in your career, right, you got to change your mind around.

There — I — I know when I first got out, I loved doing what I did because the people I got to meet and the lessons that I learned and understanding how different businesses work and, to me, that was incredibly exciting and stimulating, so the first thing is find joy in what you do. You may do it for a long period of time, but it’s not forever and you’re going to learn things are going to be great, stimulating, motivating. And so, that’s number — that’s number one.

The second thing is to realize that it’s not supposed to be easy. If you got — took a job and it’s easy, you’re probably, A, not working hard enough or, B, well, that’s probably the main — the main — the main thing or you’re setting your bar too low, right? You should be thinking about something that’s going to stimulate you and challenge — challenge you more. So, it’s not supposed to be easy, so get over it and go back to point number one. Still find joy in what you do.

The third one fits into that same vein as well, which is be curious. Again, the most frustrating thing that I see with — with — with people when they don’t want to understand, when they don’t ask questions, but they don’t want to find out kind of things of like how things operate and how things work.

And the last part I would say is — advice I would give is be part of a great team. I know when I look back in the best parts of my career, it has always been being part of a team of people that are not competing with each other, but that are working together to compete externally to drive the business forward. That has always been incredibly motivating, stimulating, and inspiring to me. And so, I encourage college grads to find that team where they’re going to be inspired.

RITHOLTZ: Quite, quite interesting. And our final question what do you know about the world of banking, and startups, and investing today that you wish you knew back in ’93 when you first joined Silicon Valley Bank?

BECKER: Yeah, probably the biggest thing — and I think it’s hard until you’ve gone through cycles is to realize that the challenges they will come up, you’ll learn from those challenges, but they’re going to be over a lot faster than you think. You get so caught up in how challenging or how big of an issue it is. You’ll get past it, so don’t stress that as much as you do when those challenges occur. You will get — you will get through it, you’ll be better off, and things will be OKAY.

RITHOLTZ: That’s terrific stuff. Thank you, Greg, for being so generous with your time.

We have been speaking with Greg Becker. He is the CEO of Silicon Valley Bank. If you enjoy this conversation, well, be sure and check out our podcast extras where we keep the tape rolling and continue discussing all things venture and banking-related. You can find those at iTunes, Spotify, wherever you find your favorite podcasts.

We love your comments, feedback and suggestions. Write to us at Sign up for my daily reads at Check out my weekly column on Bloomberg at Follow me on Twitter @ritholtz.

I would be remiss if I did not thank the crack team that helps put these conversations together each week. My Audio Engineer is Maruful. Paris Wald is my Producer. Michael Batnick is my Researcher.

I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.




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