Silicon Valley Bank\u0027s collapse have left big questions about the future of tech lending in Canada. Find out why
Tech companies rely on venture debt to fund their growth, boosting valuations before they sell equity. If founders and early investors lose that runway to build, and have to tap equity markets earlier, they face the risk of greater dilution.
“Will continue to offer competitive products? I’ve spoken to a number of the CEOs of the banks and they said that they certainly would,” he said. “But that remains to be seen.” BDC Capital’s Nycz said it’s too early to tell how much of an appetite the big banks have — beyond the short-term sop-up in response to Silicon Valley Bank’s sudden disappearance — to build on their venture operations.
Silicon Valley Bank established a beachhead in Canada in 2019. It had grown into the 16th largest bank in the United States by turning relationship building with venture-stage technology companies into a lucrative long-term banking business, and its arrival stoked interest in Canada’s innovation sector.
Growth in the U.K. was on enough of a tear that the branch there had to be converted into a banking subsidiary.
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