Video: How Venture Capital Works

SVB Financial Group, the parent company of Silicon Valley Bank and financial partner to technology companies and venture capitalists worldwide, released a video entitled, “How Venture Capital Works" — a panel discussion about the dynamics of the venture capital process, including how money flows and emerging companies are developed.

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Silicon Valley Bank’s Michael Hanewich, head of life sciences on the East Coast, leads an hour-long conversation between entrepreneur John Mendlein, chairman of Fate Therapeutics and former CEO of Adnexus (acquired by Bristol-Myers Squibb in 2007 for more than $500 million); one of Fate’s venture capital investors, Bryan Roberts, a partner with Venrock; and Judith Elsea, managing director of Weathergage Capital, a Venrock Limited Partner. The group discusses the relationship between the participants in venture capital and the process for raising funds, investing in emerging companies, and returning profits to investors.

“We live and breathe the venture capital process every day, but we recognized that some of our stakeholders needed a better understanding of how companies get and use venture capital financing, and how VCs and their investors decide where to invest,” said Michael Hanewich. “The knowledge shared by our successful panelists will be as valuable to entrepreneurs and potential venture capital investors as it is to people new to the idea of venture.”

“Venture capital is a critical component to maintaining the United States’ leadership in innovation,” said Bryan Roberts, a partner with Venrock. “Partnering with passionate, visionary entrepreneurs and our limited partners, we hope to continue to build impactful companies like Adnexus and Fate Therapeutics. We welcomed the opportunity to work with Silicon Valley Bank to put a spotlight on the process that has helped so many of today’s leading enterprises get off the ground and flourish.”

Segments in the video include the role of the venture capitalist and the limited partner, the return on investment expectations of investors, the fundraising process and finding venture capital from the right partners, characteristics of the best investors, how equity compares to debt, exits, and how profits get distributed, among many other topics.

Since 1983, SVB Financial Group has worked with hundreds of venture capitalists and helped thousands of technology and life science start-up companies grow into large, productive businesses, creating jobs and innovative products and services that are used and sold worldwide. Today, SVB banks more than 500 venture capital funds and 50 percent of all venture-capital backed companies in the U.S., servicing them as they grow into mature companies. SVB also works with companies in several overseas markets and has $1.5 billion in funds under management.


Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member of the Federal Reserve System.


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