2023 Reflections & Why The Best is Yet to Come

Disclaimer: if I had more time I would have written a shorter post (to paraphrase Mark Twain), but wow, what a year 2023 turned out to be. Feeling incredibly fortunate to still be a part of Silicon Valley Bank (and now First Citizens Bank !) and work alongside such amazing colleagues and in support of our inspiring clients.

The below post outlines some of my reflections from the past year, incl. what it was like to be inside the eye of the hurricane during those fateful days in March, how the grit and determination of so many colleagues helped alter the course of history for the better in the immediate aftermath, and why I am optimistic for next year and beyond…the best is yet to come!

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Experiencing a Bank Failure at 35,000 Feet

As I wrap up the final working days of 2023 and reflect on the unpredictable, tumultuous, and (somewhat surprisingly) rewarding past year, I’m filled with a profound sense of gratitude for the amazing people by my side. Obviously this starts with my family. I was flying with my wife and two kids from DC to LA en route to Santa Barbara for a friend and former SVB colleague’s wedding on March 10th, the day after the unprecedented bank run that saw $44B wired out of SVB in less than 10hrs. I (along with most of my colleagues) found out about the FDIC stepping in when a notice went up on the SVB website while my flight was still in the air...and then almost poetically the inflight wifi stopped working for most of the remainder of the flight. After we landed, an email went out to SVB employees stating the bank was now in receivership. To say I never thought this was within the realm of the possible would be an understatement, and we had no idea about what would come next.

The End Hasn't Been Written Yet

Following the wedding (which was still a beautiful and memorable ceremony, in a testament to the centered and loving couple!), rather than fly back to DC as planned, my family joined me on the drive north to Palo Alto where I’d spend most of the next two months working alongside passionate colleagues to do whatever we could in helping resurrect this special and important institution. A coping mechanism I relied on during those initial days was reminding myself “you’re living through history: this is a future business school case study, and the end hasn’t been written yet…let’s do whatever we can from here to drive a better outcome for our clients and stakeholders.”

The tone quickly shifted after the first two days of uncertainty to one marked by grit, determination, and camaraderie. I found myself working alongside interim CEO Timothy J. Mayopoulos starting Monday, March 13th, and over the course of the week watched our Palo Alto office balloon in size from <10 on Monday to >100 by mid-week as people from across SVB started showing up and worked around the clock to help stabilize the bank, engage clients, and try to facilitate the ultimate sales process.

We were now all rowing in the same direction, and the strength of SVB's culture came out: we're not just a bank for entrepreneurs, but a bank of entrepreneurs, and we were going to figure this out. It was inspiring to look down the hall and see colleagues like Jim Tyler , Matthew Freiman , Gagan Kanjlia , and Rafael Petrone (just to name a few) rolling up their sleeves and doing whatever they could.

The operating environment was incredibly challenging, from misinformation in the media and that was being pushed by opportunistic competitors trying to capitalize on the situation, to the very real operational challenges of starting/stopping and doing business as three different legal entities over a 4 day period (SVB, Deposit Insurance National Bank of Santa Clara, and Silicon Valley Bridge Bank N.A.), not to mention the whiplash and PTSD from seeing an organization we all cared about get rocked to its core. And yeah, being way overweight SIVB stock (a consequence of believing in our outlook) and watching that evaporate and go to zero hurt too.

There were also the broader macro implications to the US innovation ecosystem if SVB ceased to exist. SVB’s mission had always been to reduce barriers to entrepreneurship and support founders and investors from the earliest stages of company formation when many competitors (still) would view them as unbankable. Founding a startup is hard enough, and it could get that much harder without SVB in the picture. Fortunately, others started recognizing this as well, such as the 687 VC firms who signed a Statement of Support in helping reboot SVB, led by Hemant Taneja .

A New Chapter with FCB: We're Better Together

On the evening of Sunday, March 26th, I’m fairly certain I was the first person from SVB to see (from my office window) the executive team from First Citizens Bank (FCB) arrive at our Palo Alto office to finalize their deal with the FDIC.  Over a very short period of time, I went from knowing virtually nothing about FCB to being remarkably impressed by the caliber of their team, their vision and strategy (over the last 125yrs!), their shared commitment to their clients and people, and their genuine curiosity in wanting to learn as much about the legacy SVB business as they could so that we could formulate the new strategy as a combined company.

Looking back over the past 9 months, I can definitively say there couldn’t have been a better acquirer for SVB. FCB cares about supporting the innovation ecosystem as much as legacy SVB and has doubled down across the key aspects of our strategy and business model to retain our talent, support our clients, and grow the business. It turns out they are also really good at post-merger integration (helped by the playbook refined from buying 25+ banks over the years)!

A little understood nuance is that FCB is a state-chartered bank (regulated by the Richmond Fed), just as legacy SVB had been state-chartered (regulated by the San Francisco Fed), which is one of the reasons we have been able to maintain a similar business model and commitment to early stage companies (incl. venture debt lending), versus nationally chartered banks that are regulated by the OCC and generally are more transactional and interested in later stage companies.

The results speak for themselves: from the fact we’ve been able to keep ~85% of our legacy SVB commercial banking team intact, the market reception we’ve gotten from clients and the business we've been able to win back, and the outlook that’s been shared on our joint earnings calls. It turns out SVB and FCB truly do work better together, and our clients see the benefits.

It's All About the Team & Mission

To all my FCB/SVB colleagues, it continues to be an honor and privilege to work alongside all of you and I sincerely look forward to what’s to come in 2024 and beyond. As my colleague Josh Grollman shared back in September, “never underestimate the sheer power of a small group that has something to provide with laser-focused priorities.” I’m particularly excited about the opportunities to keep growing our Startup Banking (pre-Series A) practice with our exceptional team and making it even easier for clients to say “Yes, SVB!” because we clearly add more value to their businesses than anyone else. 

And to all our clients, thank you for your continued confidence, trust, and partnership. As our SVB teams hear time and again from clients, there is no other bank that “gets” the needs of founders and investors better than SVB, that will work harder to add value beyond banking, or that is more committed to the innovation ecosystem starting at the very earliest stages – there is no such thing as too early for us!

I’ve so enjoyed the in-person events we've hosted in Boston, Raleigh, Tampa, Miami, DC, New York, and San Francisco, to name just a few of the stops from the past two months (OK, maybe my wife is right that I have been traveling a bit too much ), and am excited to share there will be more Founder Success programming coming online in 2024.

The best is yet to come!

Blake Armstrong, Bo Ren, Jake Mendel, Joe Lustig , Pamella Benac , Monica Driscoll , Hani Azzam , Chareeda R. , Ronnie Harris II , Beau Kraft , James Abishek Wilson , Vera Shokina , Dustin Welch , Andy Tsao