Silicon Valley Lender Banks on High-Tech Start-Ups

Signaling continued confidence in the growth of the county’s high-technology industry, one of the state’s leading lenders to small business start-ups has opened a local branch.

Silicon Valley Bank, which specializes in high-technology start-up financing, opened an outlet last week in Westlake Village--proof, its manager says, that the recent growth of high-tech in the area is expected to continue for the foreseeable future.

“The location makes total sense,” said Terry Bess, a bank senior vice president who manages the new branch. “Over the past 12 months or so, we’ve had a significant amount of development in the area, so having a presence became very important to us.”

The Santa Clara-based bank made its first foray into the Southern California market nine years ago when it opened an office in Orange County.

Before that, the bank had focused almost exclusively on growing firms in the Silicon Valley and Palo Alto areas.

Two years ago, the bank opened an office in West Los Angeles to help fund start-ups in Los Angeles, Ventura and Santa Barbara counties.

Its launch in Westlake Village, bank officials said, is symbolic of the area’s recent growth and potential.

“There are a lot of eyeballs looking at the area right now,” Bess said. “All the investors we talk to are interested in it and would like to be a part of it. . . . That’s been one of our motivations for opening an office in Westlake Village.”

So has customer service.

Silicon Valley Bank has more than 40 clients in the north Los Angeles, Ventura and Santa Barbara county areas.

With an increased profile in the area, Bess said, the bank will be in a better position to meet individual needs and to court new clients.

“A unique thing about high-technology is that these companies seem to cluster together, and we think it’s important to be there and be part of that community,” he said.

Over the last three years, venture capitalists have taken a great interest in the so-called 101 Corridor between Tarzana and Camarillo, pumping more than $124 million into companies there in 1998.

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According to a recent study conducted by PriceWaterhouseCoopers LLC, that was up from about $41 million in 1996.

Jack Kyser, chief economist for the Los Angeles Economic Development Corp., said the bank’s decision should open the door for others looking to take a more active role in the industry’s development.

“They’re trendsetters. . . . People pay attention to them,” he said. “They know the industry and wouldn’t decide to get involved if they weren’t sure that what’s happening there is good.”

In addition, a larger presence by the bank should bode well for entrepreneurs who had previously relied on venture capitalists to fund their business start-ups.

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According to Kyser, venture capitalists generally lack the experience and expertise of specialized banks and often want to take a more active role in the direction of the company.

With the backing of a bank like Silicon Valley, those entrepreneurs don’t have to worry about that kind of problem.

“Venture capitalists are going to want to be in the back seat, which can be frightening for entrepreneurs just starting out,” Kyser said. “When you’ve got a bank backing you, you’re not necessarily going to have that. . . . It means you’ve got solidity, that they understand your direction and are confident in it.”

Silicon Valley Bank’s Westlake Village branch is staffed by three full-time loan officers, each of whom has experience in financing high-technology firms.

Depending on the business that is generated with its higher visibility, Bess said, the bank may add as many as two more positions by the end of the year.

“We’re excited about being here,” Bess said. “There’s a lot of room for us to assist companies.”