By Milt Capps
Published Tuesday, March 14, 2023 12:23 pm
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JOE MAXWELL, managing partner of FINTOP Capital in Nashville says that, beyond the inherent stress of the situation, the FDIC becoming the receiver of Silicon Valley Bank and some other banks represents a loud "wake-up call" for founders, investment funds, limited partners, employees and regulators, alike.
Maxwell, 54, told Venture Nashville today that upon getting word of the origins of SV Bank's troubles, the fintech-only VC he leads moved quickly to redouble emphasis on discipline in treasury, cash management and related matters for the firm's affiliated funds and its portfolio companies.
Maxwell also acknowledged -- in his capacity as recently named co-entrepreneur in residence (EIR) of Project Fintech at the Nashville Entrepreneur Center -- that discipline will be a recurring theme for fintech companies admitted to the program.
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He also confirmed that a previously planned Project Fintech preview event will be held later this month at the Nashville EC.
VNC understands that projected attendance for that March 29 event at the EC is already mounting and remaining registration is being overseen by FINTOP Chief of Staff Colleen Flynn MBA, who was recently recruited to the firm.
Elaborating on the discipline theme, Maxwell said that suddenly funds and entrepreneurs, as well as institutions, are focusing on a new maxim -- "Know Your Bank" -- much as they have long heeded the admonition, "Know Your Customer."
He said those and other concerns have heightened interest in marketplace technology platforms, including tech platforms that allow executives who hold corporate-finance or treasury functions to diversify their loans and deposits -- with heightened awareness of concentration of accounts in industries or segments.
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Maxwell is also a principal in the JAM FINTOP Banktech Network, which is comprised of 91 banks with $1.3TN assets, he confirmed.
At least 20 of those network member-banks have signaled their readiness to address needs of portfolio companies affected by SV Bank troubles.
Maxwell emphasized that the ramifications of the recent banking disruption are not yet entirely known. Unknowns include whether white-knight acquirers will enter the arena, and, either way, which specific institutions will be comprehensive venture lenders, going forward.
Project Fintech is establishing a statewide industry network and accelerator program that is designed to help fintech founders achieve and sustain rapid growth, which the organizers believe can, over time, help establish Tennessee as the best place in the U.S. to grow and scale fintech companies.
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The Federal Deposit Insurance Corporation announced yesterday that the FDIC "transferred all deposits--both insured and uninsured--and substantially all assets of the former Silicon Valley Bank of Santa Clara, California, to a newly created, full-service FDIC-operated 'bridge bank' in an action designed to protect all depositors of Silicon Valley Bank."
The new bank is known as Silicon Valley Bridge Bank, N.A., according to an FDIC release. In their March 13 release, the FDIC, U.S. Treasury and the Federal Reserve announced steps taken with respect to both SVB and Signature Bank, New York.
Today, the U.S. Department of Justice and the Securities and Exchange Commission announced their joint investigation of the SVB failure, according to national media. And Moody's, the rating agency, disclosed its downgrade of the U.S. banking system from "stable" to "negative."
In Q1 2022, Fintop announced completing an oversubscribed $220MM Fund III.
Venture Nashville's previous general Fintech coverage here; FINTOP Capital coverage is here. Maxwell's LinkedIn profile is here. FINTOP's portfolio page is here. VNC
.last edited 1432 14 March 2023