Half of US companies focused on climate change and biotech are banked in the now-defunct Silicon Valley Bank (SVB), and many of these companies are looking for financial backers willing to take the risks. I’m here.
As public radio station KQED in the San Francisco Bay Area reportmany of these companies were funded by SVB because other banks were reluctant to fund investments that were unlikely to provide returns.
Nearly half of US bio and climate technology companies, many of which are headquartered in the Bay Area, have access to Silicon Valley banks. Last year, SVB pledged to invest at least $5 billion in the cleantech industry.
But despite the FDIC’s swift intervention to guarantee deposits, after the bank’s collapse, many businesses scrambled to find new banks, open accounts and reorganize their payroll systems. .
He points out that SVB is widely known for fostering ambitious climate change and biotech start-ups and is looking for banks willing to invest in innovative and slightly riskier ventures. It was a valuable resource for new companies.
Kimberly Strassell, columnist wall street journal, quoted One source who called such investments “subprime business loans” said:
Most of these companies did not meet critical market needs.rather as a journal report, the SVB said of its “willingness to provide banking services to start-ups that are often unprofitable, sometimes have no product, and otherwise struggle to obtain lines of credit or loans from larger banks. ” One tech entrepreneur gave law.com an even more scathing description of SVB’s product. You’re talking about companies that have no creditworthiness, are running out of cash, and are unlikely to raise the same kind of capital for interest rates. . . it was basically social credit. ”
Why would a bank ignore the risk and pour money into goods and services that no one wants to buy? One answer is easy money and misguided regulation that keeps interest rates near zero forever. Fueled by the Fed’s convictions, it has flooded the economy with dollars despite pushing banks like the SVB to build up sovereign debt. other? Washington is distributing handouts through President Biden’s efforts to engineer a climate industry that would otherwise not exist.
She said the same Democratic-led government that funded failed companies like Solindra in the 2009 “stimulus package” controlled by then-Vice President Joe Biden is making the same mistake again. claims.
As Breitbart News noted in 2020, Biden personally credited Fisker Automotive for investing in Delaware in 2009 to produce electric vehicles backed by stimulus. The venture failed without producing a single car.
Joel B. Pollak is senior editor at Breitbart News, Breitbart News Sunday Sunday from 7pm to 10pm (4pm to 7pm ET) at the Sirius XM Patriot. he is the author of a new biography, Rhoda: “Comrade Kadary, you are insane.”He is also the author of a recent e-book, Neither Free nor Fair: The 2020 US Presidential ElectionHe is the recipient of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter. @Joel Pollack.