In client call, SVB’s new CEO focuses on venture, startup relationships

three days into his tenure as Silicon Valley BankTim Myopoulos, the government-appointed CEO of the U.S., has a message for his high-powered venture capital and startup clients, get your money back

This remained consistent during Myopoulos’ responses as he fielded over 400 questions from concerned customers in a 30-minute session. zoom Call on Wednesday.

“There is no safe place in the US banking system to put your deposits,” Myopoulos said on the call, which CNBC attended and first reported. He urged customers to return their funds to the bank and immediately alert their relationship teams to any issues with inbound or outbound wire transfers, which is a concern for many corporate executives who have lost their jobs to the bank last week. Was unable to withdraw the deposit.

Myopoulos was joined by SVB operating chief Phil Cox, the only remaining executive from the core C-suite team. SVB’s former CEO and CFO are no longer employed by the bank, Myopoulos said on the call.

While Myopoulos is making his pleas to current and former customers, it is unclear how long he will stay in his current job as the bank is currently regulated by the Federal Deposit Insurance Corporation. Myopoulos said he did not know what SVB’s “exact final state” would look like, and he listed three possibilities: recapitalization, sale, or liquidation.

A recapitalization would allow SVB to continue to exist as a standalone entity. But this possibility depends on the other financial institution or group of investors.

Mayopoulos, in direct response to venture capital firms’ concerns, said, “I admit I’m new to the scene.” “You’ve been patient with us as we went through some of those operational difficulties. All I’d say is give us a chance to win back your trust and confidence.”

Myopoulos’ pitch was tailored to venture investors, who took to social media to express shock and dismay at the collapse of the storied Silicon Valley institution. On the call, Myopoulos repeatedly referred to an “innovation economy” and a startup ecosystem in which “Silicon Valley has played an important role.”

Customer feedback will be important in determining the future of the bank, Myopoulos said on the call. Input “from customers and from the venture capital and entrepreneurial community” will shape the timetable for SVB’s eventual emergence from government control.

The CEO said in his statement, “One thing I want to tell you is that you have some agency in this that you actually get to vote, at least to send a clear signal about whether What do you want the result of this process to be?” prepared remarks. “If our customers choose to take their deposits and keep them with other institutions, this clearly limits the range of options we have in terms of the end result.”

SVB’s longstanding relationship with Silicon Valley’s most elite venture firms is mutually beneficial and symbiotic.

From its founding at a poker table to its near-fatal bank run last week, SVB was focused on taking risks in a market that most traditional banks stayed away from. SVB found a niche in venture lending, funding companies that needed cash, especially between funding rounds.

In exchange for a future idea, often equity or warrants in a company, SVB became a huge player in the venture debt space, which spans from software and the Internet to life sciences and robotics.

Among its more than 40 businesses, SVB has been courting its depositors as well as a lucrative mortgage business and a suite of private-banking products, which allowed it to retain and attract the founders whose fortunes the bank made. helped create.

From legacy enterprises like Cisco to modern technology companies like DocuSign and Roku, SVB has focused on providing financing and banking services at every stage of growth.

“There are other places that do business loans, but the Silicon Valley bank was the 1,000-pound gorilla in the room,” said Ami Kassar, CEO of business lending consultant Multifunding.

Exclusivity contracts, meaning an ironclad promise that a company would keep all its money in SVB, were a key aspect of those funding deals. When the SVB failed, it stymied startups that had traded banking flexibility for liquidity. Some fled the bank, violating their contracts to keep their lights on and keep rolling payroll checks.

When asked about possible exclusivity violations, Myopoulos indicated that he understood the emergency actions taken by the startups.

“Given the change in circumstances and what the FDIC has done around insurance coverage, we would love to work with our customers to return those deposits to us,” the CEO said on the call.

Myopoulos suggested that returning customers won’t have to worry about any repercussions from breaching their contracts. He did not say what would happen to former customers who do so.

— CNBC’s Kat Clifford contributed to this report.