New Imperial Office Targets O.C. Start-Ups

Imperial Bancorp is joining the increasingly crowded field of banks that are chasing some of Orange County’s technology start-ups.

This month, the Los Angeles-based bank opened its first office devoted entirely to lending money to entrepreneurs who are backed by venture capital.

Imperial’s Emerging Growth Division, which opened in Irvine, attempts to catch up-and-comers when they are little more than an idea. Most of the companies are “pre-revenue,” says Michael Quain, who is heading the O.C. office.

Imperial joins several other banks that are hoping to gain a foothold in the same niche, including City National Bank, Silicon Valley Bank and Comerica.

Orange County--particularly the Irvine Spectrum area--is drawing a great deal of attention from lenders interested in tapping into the budding technology firms. “Orange County is viewed as one of the hot investment spots,” Quain said.

Though lending to start-ups sounds risky, it’s really not. Imperial will lend only to companies that have lined up venture capital financing, and then the bank makes sure its loans or equipment leases are first in line to be repaid should problems arise. That means venture capitalists have a strong incentive to make sure the business flies or that there’s plenty of liquidity to repay the loan.