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Startup Outlook 2016: Letter from SVB’s CEO

Greg Becker  |  March 10, 2016

Read the Reports 

We are pleased to present Startup Outlook 2016, Silicon Valley Bank's annual report on the health of the innovation economy. For each of the past seven years, we have taken a survey of companies to learn what entrepreneurs are thinking about business conditions, access to capital and talent, and the policy issues that help or hinder their success.

This year, we are drawing on responses from more than 900 technology and life science executives, and for the first time we expanded the survey to China. SVB conducted the survey portion of the report in December 2015, just as significant market volatility was taking hold. They say timing is everything, and in the past several weeks it has become apparent that entrepreneurs' perceptions at the end of 2015 had already shifted by mid-January.

The public conversation about 2016 is filled with doom and gloom about the innovation sector, with exaggerated predictions of the death of unicorns, a funding crisis and lackluster results all around.

At Silicon Valley Bank, we see it differently. We think it's a healthy recalibration, but it doesn't mean it's going to be easy for entrepreneurs. 

Valuations were high, now they are coming back to earth. Growth at any cost is being replaced with a focus on profitability. Companies were priced for perfection, and we may see some stumble or even go out of business.

Entrepreneurs we speak with, while remaining naturally optimistic, are adopting a new attitude: Be prepared. They are pulling the reins tighter on operations and retooling strategies. They are anticipating a more balanced funding environment. They are considering M&A an even more viable exit strategy. In 2016, access to capital will get harder. But it's not supposed to be easy, and there will be opportunities for good companies with good ideas. That's healthy.

Thank you for taking a look at this report. We hope the findings can be useful as you chart your own path or follow this sector. Looking globally, the opportunities for innovation are abundant. Entrepreneurs are strong-willed men and women who want to have a positive impact on the world. That's never going to change.

Read Startup Outlook 2016

 

 

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A third-party firm, Peerless Insights Survey, conducted the Innovation Economy Outlook 2016 survey online on Silicon Valley Bank's behalf from November 12, 2015, to January 6, 2016.

This material, including without limitation to the statistical information herein, is provided for informational purposes only and is compiled from the survey that we worked on with Peerless Insights, a third-party source. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction.

 

About the Author

Greg has been a champion of the innovation economy since he joined Silicon Valley Bank in 1993 as a banker to fast-growing technology companies. Today, he is the CEO of the world’s only bank dedicated to the innovation sector around the world.

Silicon Valley Bank’s mission is to help increase the probability of its innovative clients’ success globally. Under Greg’s leadership, Silicon Valley Bank’s growth rate has continued to outpace other banks. SVB has been named one of the fastest growing public companies in the U.S. and one of the best places to work. SVB is also an advocate for entrepreneurs, their investors and corporates in the innovation sector internationally. During 2017, Greg was recognized as a top influencer in global finance by Worth Magazine. He was also named the #1 bank CEO for midcap banks by Institutional Investor Magazine.

Greg was the president, chief operations officer and chief banking officer prior to taking on the CEO role. Earlier in his career, Greg ran the company’s Venture Capital Group where he was responsible for building relationships with, and investing in, venture capital and private equity firms across the U.S. Greg was also a co-founder and managing director of SVB Capital, which manages some of the world’s top-rated venture fund-of-funds and co-investment funds, and he was a member of Silicon Valley Bank’s Operating Committee.

Greg is a member of the Executive Council of TechNet and on the Executive Advisory Board of the Alliance for Southern California Innovation. He was the chairman of the Silicon Valley Leadership Group (SVLG) from 2014-2017 and a member of the U.S. Department of Commerce’s Digital Economy Board of Advisors from 2016-2017.

He earned a bachelor’s degree in business from Indiana University.
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