Startup Outlook 2016: Letter from SVB’s CEO

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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

A recognized leader in the innovation economy, Greg Becker heads the only bank dedicated to the global innovation sector.

Greg believes the innovation economy brings together talented people who are passionate about turning great ideas into sustainable businesses to create jobs, grow the economy, and enable more people to unlock opportunity.

Under his leadership for a decade, Silicon Valley Bank has consistently outpaced other banks’ growth rates – enabling SVB to expand the services it provides to thousands of fast-growing companies and their investors. In the US, SVB is among America’s Top 10 Best Banks (Forbes) and Most Responsible Companies (Newsweek) and annually ranks as a Top Corporate Philanthropist, member of the Bloomberg Gender-Equality Index and among the best places to work.

Greg joined SVB in 1993, and has spent his career championing innovation, helping entrepreneurs and their investors scale across the US and globally, building SVB for the long-term and expanding to include nine countries. Working with employees, clients and partners, he has also prioritized investments and initiatives to increase diversity and inclusion at SVB and across the larger technology workforce, foster economic development and support community well-being.

Since 2011, Greg has served as president and CEO of SVB Financial Group and CEO of Silicon Valley Bank. Earlier, he held various senior leadership positions including co-founder and managing director of SVB Capital, chief banking officer and president of Silicon Valley Bank.

Greg holds key positions that enable him to contribute to policymaking and advocate for the innovation economy at the highest levels: In 2019, he was elected a Class A Director for the Federal Reserve Bank of San Francisco and chairman of TechNet. He is a member of the Executive Council of the Silicon Valley Leadership Group, which he chaired from 2014 to 2017. Greg also served as a member of the US Department of Commerce Digital Economy Board of Advisors from 2016 to 2017.

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