Choosing a Bank - PowerPoint PPT Presentation

Loading...

PPT – Choosing a Bank PowerPoint presentation | free to view - id: 16f3b3-ZDc1Z



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Choosing a Bank

Description:

Warrants. 10. Picking Your Bank Partner. 11. Keys to Picking Your ... Types of Banks. Community Banks. Business oriented. Real estate oriented. Upscale Private ... – PowerPoint PPT presentation

Number of Views:36
Avg rating:3.0/5.0
Slides: 24
Provided by: sandhill
Category:
Tags: bank | choosing | of | types | warrants

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Choosing a Bank


1
Choosing a Bank
1
2
The Basics
2
3
The Basics
  • Debt versus Equity
  • Choosing Your Banking Partner
  • Traditional Banking
  • Venture Banking

3
4
Debt vs. Equity
4
5
Critical Questions
  • What do you need to finance?
  • What is the required time frame to finance your
    need?
  • What constraints do you have as a corporation?
  • What controls concessions are acceptable to
    your firm?

5
6
What Are My Needs?
  • What do you need to finance?
  • RD
  • Administrative Staff Expansion
  • Marketing Roll Out
  • Equipment Purchases
  • Acquisition
  • Intermediate Working Capital Growth
  • Inventory Build Out
  • Shortening A/R Collections
  • Bridge to an Equity Event

6
7
What is the Desired Time Frame?
  • Long- Intermediate-term (over 18 months)
  • Equity Retained Earnings
  • Subordinated (mezzanine) Debt
  • Long-term Bank Debt
  • Short-term (less than 18 months)
  • Short-term Bank Debt
  • Short-term Investor Debt
  • Trade Credit

7
8
Match Funding
  • Stock Retained Earnings Subordinated Debt
  • Long-term Bank Debt
  • Short-term Bank Debt Debt
  • Trade Credit
  • RD Administrative Expansion Marketing Roll
    Out Inventory Build Up Acquisition
  • Equipment Finance Intermediate Growth in Working
    Capital Acquisition
  • Short-term A/R Growth
  • Short-term Inventory Growth

8
9
Constraints
  • Ownership Issues
  • Valuation Issues
  • Legal Roadblocks
  • Corporate Structure Issues
  • Personnel Issues

9
10
Controls Concessions
  • Ownership
  • Board Appointments
  • Debt to Equity Conversion Rights
  • Intellectual Property as Collateral
  • Covenants
  • Warrants

10
11
Picking Your Bank Partner
11
12
Keys to Picking Your Banking Partner
  • Can they meet your critical banking needs now?
  • Do they understand the dynamics of your business?
  • Are they committed to serving the technology
    community?
  • Does there exist any internal/external
    constraints to product delivery?

12
13
Critical Bank Services
  • Deposit Services
  • Cash Management
  • Investment Services
  • Foreign Exchange
  • International Collections
  • Equipment Loans
  • Lines of Credit
  • Bridge Loans
  • Letters of Credit
  • Asset-Based Loans

13
14
Types of Banks
  • Community Banks
  • Business oriented
  • Real estate oriented
  • Upscale Private
  • Large Banks
  • Regional
  • Super-Regional
  • Merchant Banks
  • International Banks

14
15
Traditional Banking
15
16
Underwriting Criteria
  • Two or more years of profitability
  • Cash flow positive
  • Strong Balance Sheet
  • Prefer larger deals
  • Loans used as a loss leader for other services

16
17
Venture Lending
17
18
What is Venture Lending?
  • A focused effort to provide the client a
    three-dimensional, value-added solution to their
    financing need on a timely basis.

18
19
Value-added Services
  • High-quality services at a low cost.
  • Easily accessible by a computer-literate client
    base.
  • Services which help the client manage their
    business more effectively.

19
20
Value-added Debt
  • Debt which is available to support a companys
    growth.
  • Debt which is available to help the client manage
    its cost of capital.
  • Debt which is governed by a structure that allows
    the company to focus on their business.
  • Debt which is available to help the client
    establish vendor credit.
  • Debt which allows the shareholders to potentially
    enjoy higher returns on investment (i.e.
    shareholder value added).

20
21
How is debt made available to early-staged
companies with minimal tangible assets?
  • Valuation Lending
  • Make debt available to a company based primarily
    on the valuation of the company (i.e. the third
    party valuation of the intellectual property).
  • Keep the debt amount in a low relative proportion
    to the companys overall post-money valuation.
  • Lend only into early stage companies.
  • Lend into companies supported by top tier
    investors and understand their business
    motivation for financing the company in the
    future.
  • Lend into companies with strong, credible
    management teams.

21
22
Underwriting Criteria
  • Modest leverage (1.50x or less)
  • Acceptable liquidity (QR of 1.0x or greater)
  • Tracking to plan
  • Investor support
  • Confidence in management.

22
23
Active Banks in the Silicon Valley
  • _______________
  • Silicon Valley Bank
  • Cupertino National Bank
  • Imperial Bank

23
About PowerShow.com