What’s that you say? You’re not missing out on technology. You use social media. You use email newsletters and blog frequently. You offer online banking, mobile banking, bill pay and PFM. Your customers/members can open accounts and apply for loans online.
You’re right, most of you do use all of these tools. But how many technology companies are your customers?
Hmmm, was that a scratching record and crickets that I heard in the background?
I was reading a post on OnStartups the other day and saw an interesting statement:
Best Bank for Working with Startups:
In case you haven’t heard of them, Silicon Valley Bank has more than $19 billion in assets and pretty much caters to the startup community. Here are some interesting stats:
- 50% of all VC-backed companies in the US bank with Silicon Valley Bank
- 2/3 of all VC firms bank with Silicon Valley Bank
- 70% of Businessweek’s Top Entrepreneurs are Silicon Valley Bank clients (May 2011)
- 68% of WSJ Top VC-Backed companies are Silicon Valley Bank clients (March 2011)
- Only global bank dedicated to the innovation sector
Silicon Valley Bank has branches in the startup hotbeds of the US and globally. The way that Charleston, SC is growing, I wouldn’t be surprised to see a branch here soon.
Now correct me if I wrong, but right now technology is considered a growth industry. In fact, over the last couple of years, you hear a lot more about startups in general. Is your community bank or credit union pursuing these new prospects? I promise you that your big competitors, such as Bank of America, Wells Fargo, TD Bank, Citi and JP Morgan, are.
One thing I’ve heard over and over from entrepreneurs is they try going to a community bank or credit union first, but are turned down. The larger bank however, accepts their business and works with them. Because that larger bank helped them get started, entrepreneurs feel a fierce loyalty to them.
This is an instance where “all our decisions are made locally” comes back to kick you in the proverbial tail. Your chance of getting any future business with this company, when they are successful later, is pretty low. Your only hope is that the big bank will do something, such as lower a credit limit when they need it, that will cause extreme dissatisfaction.
The sad part is I see this happen so many times here in Charleston. The Charleston area has been in the news lately for being entrepreneur friendly. Here are a few awards the area has received recently:
- #11 Milken Institute’s “Best-Performing Cities 2011”
- #1 nationally as the top tourist destination in America, Conde Nast 2011
- #1 2011 Metro Areas with the Largest Percentage Growth in College Degrees over 10 Years, Brookings Institute Study, Wall Street Journal
- #8 2011 Best Cities for Job Growth – Mid-Sized Cities, New Geography
- #3 2011 Small Business Vitality Scores, The Business Journals
- #4 2010 Small Business Vitality Scores, Portfolio
- #7 2009 Best Cities for Technology Jobs, Forbes
- 2009 Best Place for Start-Ups, Mount Pleasant cited as best city in South Carolina, Business Week
Even with all of that, I don’t know of a single community bank or credit union in the area that actively pursues the startup community. In the past I’ve worked with BarCamp Charleston and contacted local FI’s about sponsoring the event. In the three years of BarCamp Charleston being held, no bank or credit union has ever been a sponsor.
This is a huge opportunity that is being missed. It’s sad to say, but it almost seems that because BarCamp is organized by a bunch of enthusiasts, it’s not deemed a “worthy event”. I noticed that plenty of FI’s send representatives to local chamber events. If they only knew how many successful business owners attended BarCamp.
Now, in your community I’m sure there are plenty of businesses that would love to bank with someone local. My advice is to get them while they’re still in a growth stage and can really use your financial expertise. Take the time to meet with them and learn their business. Because when they become that million dollar company and big bank comes-a-calling for their business, they’ll remember you took a chance on them when they needed it. Besides, Silicon Valley Bank will be more than happy to take them off your hands.