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Silicon Valley Bank, A Look to The Past For Possible Future Troubles: “Insights and Tech Trends 2021”

At present, people worldwide are concerned about the potential consequences of the collapse of Silicon Valley Bank. Recent news reports have highlighted how other banks and tech companies are locked into inflexible and one-sided contracts with SVB, similar to something the Godfather might create. However, we do not aim to alarm the public with this post. With such a significant event unfolding within our financial systems, we must explore any other potential impacts. To do so, we must travel back to the past, somewhat Back to the Future-style. To begin, let’s take a look at SVB’s “Data-Driven Insights on Mobility and Deep Tech Trends” from 12/1/22, just three months ago. This report focuses on four primary technologies:

1: The climate tech boom boosts electric vehicle (EV) investment while autonomy progress lags.

Three years ago, autonomous driving was all the rage, but the technology has developed slowly, especially in the consumer space. On the other hand, EVs have seen significant advances. Between 2018 and 2021, the number of US EV venture capital (VC) deals increased 80%. This boom has been in large part fueled by climate tech investing. As limited partners (LPs) set environmental, social, and governance (ESG) goals, VCs recognize the maturity of the sector and governments set ambitious climate targets, the amount of money flowing to climate tech funds increased 3x between 2019 and 2021. While autonomy is still one of SVB’s four pillars of innovation that will help shape the future of mobility — in addition to shared, multimodal and electric — progress has been slower. 


2: Mobility companies are burning through cash as runways shorten.

In the frenzied environment of 2020 and 2021, VC-backed mobility companies raised nearly $80 billion from VCs globally, pushing cash balances higher. After the worst-case scenario of the COVID-19 pandemic didn’t come to fruition, companies put that money to work and net burn increased. But as the funding environment dried up in 2022, cash balances began to fall while net burn continued to climb. While tech sectors such as enterprise software have made cost-cutting moves including headline-grabbing layoffs, mobility companies have mostly stayed the course. This has pushed the cash runway down for mobility companies — the median US VC-backed mobility company now has less than 12 months of cash runway. That is a far cry from the 24 months of cash runway that most VCs are recommending. 


3: De-SPAC’ed mobility companies sputter, but many are well-positioned for the future.

As with the rest of the Special Purpose Acquisition Company (SPAC) market, mobility de-SPACs boomed in 2021. But the SPAC asset class has been plagued with poor performance — the median 2021 mobility de-SPAC has seen its price drop 79% since de-SPAC (as of Sept. 15, 2022). De-SPACs have become a particularly useful funding option for mobility companies. Compared to software-only companies, building new cars and planes takes a lot of time and capital to execute. That capital isn’t always easy to raise in private markets given that some mobility companies have longer investment time horizons, tougher unit economics and higher capital requirements that some VCs shy away from. But de-SPACs provided some mobility companies with 4-5 years of cash runway (assuming current net burn rates). That means those companies now have both the time and capital to execute their vision. However, those with 18-24 months of cash runway are certainly in a tougher position. 


4: Deep tech companies turn to hardware-as-a-service.

As machines become more integrated with software, deep tech companies are adopting a business model that leverages the best of both worlds. More companies are adopting the hardware-as-a-service (HaaS) business model. Instead of selling their solutions outright, HaaS companies sell their products as a subscription model. This recurring business model means shorter sales cycles, higher profitability in the long term and leverage over the data they collect. The downside is that it increases capital needs for a hardware company, given the company is paid back over one to three years for its product, instead of immediate payback. Over the past five years, we’ve seen an increase in demand for SVB debt facilities to help HaaS companies meet their capital needs. We’ve also seen the average loan size increase, indicating that these companies are growing and require more capital to cover the payback period for the asset. 

https://www.svb.com/industry-insights/hardware-frontier-technology/video-data-driven-insights-on-mobility-and-deep-tech-trends

Jeniffer Wexton on:

public Safety

Crime has vaulted near the top of voters’ concerns, just after the economy and inflation. According to Gallup, 80 percent of Americans worry “a great deal” or a “fair amount” about crime, the highest level in two decades.

 

Such fears pose yet another midterm election hurdle for Democrats, on top of public angst over soaring prices and President Biden’s dismal public approval ratings.

 

As a former prosecutor, substitute judge, legal advocate for children, state Senator, and as a legislator, Jennifer Wexton should be well aware that our society is a dangerous place. Wexton should understand that our children, the elderly, and everyone else in between needs to be protected from violent criminals and repeat offenders. She ignores this and advocates on their behalf with light sentences, “no cash bail”, Criminal Justice Reform, and Restorative Justice.

 

Do you recall the rape of a (15) year old girl in a Loudoun County High School bathroom in May 2021 by a transgendered student? If this wasn’t bad enough, “Criminal Justice Reform” allowed for the rapists sentenced to be reduced, removing him from the sexual assault registry and providing supervised probation. To make matters worse, the Loudoun County Public Schools Superintendent Scott Ziegler IGNORED the federally mandated processes and procedures when incidents of this nature occur, and now Wexton is abolishing Title IX protections under HR5-Equality Act.

 

Jennifer Wexton got the ball rolling on the rapists lenient sentence by introducing Bill NO. 1082 in 2017, which passed (and she’s proud of it, see video during meeting with NAACP).

In 2019, Wexton proudly endorsed Buta Biberaj for Loudoun County Commonwealth Attorney. Prior to being elected, Biberaj was the legal redress for the Loudoun NAACP; this is not an insignificant detail. Biberaj also belongs to the Virginia Progressive Prosecutors For Justice. The VPPFJ’s primary goal is “Criminal Justice Reform” or “Restorative Justice”.

 

Wexton, Biberaj are closely aligned Progressive ideologues and share questionable associations with a variety of organizations and people.

Who could forget the Black Lives Matter riots of 2020 over George Floyd. Wexton is so radical that she sponsored the “George Floyd Justice Policing Act” (defund the police) and the “Mental Health Justice Act” that allowed for increased funding for social workers that are meant to take the place of police officers around the country.

 

These are only a few examples of what Wexton and the Progressive Democrats “Criminal Justice Reform” and “Restorative Justice” look like for Public Safety:

 

More on Wexton and Public Safety

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