We’re extremely honoured to have been selected by the FDIC, the US regulatory authority, from a high-end group of firms, to buyout the German arm of SVB. It’s something we never could have envisioned happening six months ago, and yet, here we are.
As previously mentioned, we saw SVB as our older sister, one who paved the way in this type of financing that was unfamiliar to the world, so watching the events unfold came from a place of understanding and sadness.
Silicon Valley Bank’s (SVB) collapse earlier this year became a cautionary tale around the current setup of the banking system and the economy as a whole, yet it has become easy to forget the mission, ethos and all the good that SVB did for the German innovation sector and most importantly, its customers.
As we come up to a decade of existence, we recognise that unlike our peers, we have rarely advertised ourselves; quite frankly we preferred staying somewhat under the radar and placing our focus on propping up the entrepreneurial ecosystem with our unique investment solutions. We have been careful to cultivate this culture internally — everything we do should be without ego and not to be done for the sake of publicity.
With that said, we did feel the need to write this letter as it is critical to help our portfolio and the industry we exist in to understand the ‘why’ behind our decision to buy the venture and growth business of SVB in Germany, of which the feelings and reasoning is multifaceted:
- Namely, it had to make sense in combination with our current strategy. The buyout fully supports our own growth plans following the recent close of our last fund of €130 million earlier this year. Germany was on the top of our strategic growth map. Through this acquisition, we are able to expand into a geography where we believe that entrepreneurs can really benefit from venture debt and utilise funding throughout rounds as they scale up sustainably.
- Over the last decade, great German VC franchises were created with high quality teams selecting impressive start-up successes. A strong innovation ecosystem has flourished in Germany as a result and the market has matured to a point where sophisticated tools like technology debt start to make sense.
- Internally, we have a culture of supporting entrepreneurs in a sustainable, pragmatic and ethical way, and the addition of SVB’s German arm made sense from a business and culture-perspective. Considering the internal ties to SVB (one of our Partners, Eliott Saba, was an early employee at SVB founding the EMEA fintech arm of the business), it felt compatible with what we are working hard to achieve long-term as a venture debt fund whose best interests lie with the entrepreneur and the tech community as a whole.
- Germany is a hotbed for sustainability-focused growth tech businesses, which since our commitment to our Article 8 requirements, has dictated the criteria for which we look for when investing.
We are truly grateful to what the German SVB team did for the tech industry, and we are very relieved to see that the work put in over the last four decades did not go to waste. We will work hard to stay true to the entrepreneurs we aim to support, and stay committed to create renewed and further trust into the possibilities that venture debt can unlock for businesses.
Bootstrap is backed by well-recognised institutions such as the European Investment Fund (EIF), the British Business Investments (BBI), the Visa Foundation and a very diversified group of limited partners including well-known US endowments, European asset managers and entrepreneurs.
Bootstrap’s experienced team has three ongoing funds and a history of 267+ transactions representing €665 million worth of investments over 140+ companies across 12 European jurisdictions. We’re proud that two-thirds of our current portfolio meets ESG criteria.
To this we now add the German chapter of the former SVB.
For more information on Bootstrap Europe, you can visit our website.
