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Wasabi CFO On Doing Business With SVB: What Worked, What Didn’t And What’s Ahead

Joseph F. Kovar

“If you’re asking why would companies bank with them, tech companies have a unique profile that is not necessarily consistent with the way that conventional banks look at target companies. Tech companies, in particular venture-backed tech companies, burn money. They are all about growing really, really quickly. And so many of the traditional banks will look at a profile like that and say, ‘Too risky for me. I don’t know you. I don’t want to be with a company that is burning money,’” says Wasabi CFO Michael Bayer.

But SVB is the country’s 16th largest bank. I’m surprised that they might not have that kind of support.

They just don’t. They had a banking affiliate in the U.K. And they have a Chinese operation, which you think about, if I’m starting a brand-new software company today, that’s gonna be scattering I need. But when I need to move money from a Japanese bank account to a Singaporean bank account, or I need to pay employees who are in Australia ... they don’t have the footprint for that. They can go through somebody else’s exchange desk or money center bank, but they’re going to somebody else. And that’s not an indictment of what they are. They are very good at the sort of traditional needs of a tech company. But there are services around foreign exchange, around certain investment services and so on, they just don’t have. And that’s why there is a place for money center banks, who span the globe, follow the sun around the globe, and have one system in one place that I can access all of our assets from one online login. …

I have to say, over the weekend, my concerns were not the whole world blowing up because I think it was just an overreaction by a whole lot of people that caused a run on what was an otherwise good bank. And I am not by any means forgiving the actions of the team that put them in that position, or the customers that put them in that position. It’s unfortunate. But my concern on Monday morning was, where do our customers send us checks? And how do we make our payments? I didn’t know what system to log into to send [things] out, but that all got resolved over the weekend. And had the Fed not done what they did, then we would have just done something different.

 
Joseph F. Kovar

Joseph F. Kovar is a senior editor and reporter for the storage and the non-tech-focused channel beats for CRN. He keeps readers abreast of the latest issues related to such areas as data life-cycle, business continuity and disaster recovery, and data centers, along with related services and software, while highlighting some of the key trends that impact the IT channel overall. He can be reached at jkovar@thechannelcompany.com.

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