The tech financing landscape looks a lot different than it did at the beginning of 2023. Banks of all shapes and sizes have entered the technology banking universe for the first time. Many companies are now faced with a new challenge when it comes to selecting a banking partner: Where to begin the search.
How can you quickly narrow the field? In my experience, you want to look for a partner that offers long-term stability, deep experience in the innovation economy, and sophisticated treasury tools to help you scale your business over many years.
Does Your Banking Partner Offer Stability?
The good thing about having several large, institutional lenders in this space is that they can bring a level of stability that smaller players might not be in a position to offer. Big banks have deeper pools of resources to draw from. More importantly, their loan portfolio and client base tend to be more diverse. A sharp downturn in one market will have less of an impact on a well-diversified portfolio than on one that is concentrated in a limited number of asset types.
Until very recently, CIBC Innovation Banking was one of the few institutional banks with a dedicated venture lending team. North America’s 11th-largest bank, CIBC has over 155 years of stable lending experience, 14 million clients worldwide as of the end of FY2023 and total assets of $717 billion USD. Our core team has been in place for over twenty years, navigating the 2008 market crash, the COVID-19 pandemic and all the ups and downs in between. Our size, stability and diversity enable us to continuously support client growth in all market conditions.
Does Your Banking Partner Have Deep Roots in the Innovation Economy?
While large banks can provide stability, few of them are experienced in working with tech startups. The innovation ecosystem is unlike any other, and companies in this space face unique challenges that make them a higher risk for traditional lenders. That’s why it’s important to work with a bank that understands how to evaluate those risks within the context of the innovation ecosystem.
CIBC Innovation Banking is an exception. Our team is uniquely dedicated to high-growth tech and life science startups. We understand the venture lifecycle, and that knowledge informs the way we evaluate fast-growing startups. As a result, our venture portfolio is one of the largest and most diversified in the industry. Working in this space since 2018, we have deployed over $8.7 billion USD as of the end of FY23 in debt capital to the innovation economy across hundreds of entrepreneurs and funds.
Speaking of funds, your bank’s relationship with venture firms is also critical. It’s a small community and reputation matters. The CIBC Innovation Banking team has strong business relationships with firms across North America. And we’re an LP in many key North American venture capital and growth equity funds – with over $335 million U.S. invested today.
When a client calls our team looking for business advice, we have a large network of experts we can call on, whether it’s to introduce them to potential investors or connect them with industry peers.
Can Your Banking Partner Service All Your Banking Needs?
The tech ecosystem is fast-moving and dynamic, and it is essential to have a banking partner who believes in your idea and understands that the startup lifecycle requires flexibility. When scaling a high-growth business, companies can suddenly find themselves in a potentially crippling financial situation. What happens if, for example, you need to make payroll but you’re waiting for the next funding round to close? Will your lender work with you to find a soft landing?
The benefits of working with a bank also extend to the individual needs of entrepreneurs. A larger institution can offer comprehensive services, such as personal banking, wealth management, insurance, and credit products – plus sophisticated treasury tools to scale a fast-growing business.
Opportunity in a New Reality
What the tech landscape will look like a year from now is anyone’s guess. One thing is for certain, however: Partnerships matter. When you’re evaluating options, think beyond your needs today. Because let’s face it, changing banks is hard. At CIBC Innovation Banking, you’ll find a partner for every stage of growth, in any market conditions. In the words of one of our clients, you’ll find a partner for life.
