VC fund Cherry Ventures advises diversification of banking partners
The Berlin-based venture capital fund Cherry Ventures, whose portfolio includes startups such as Flink, Amorelie and Flaschenpost, warned founders about the upcoming risk even before the collapse of the Silicon Valley Bank (SVB) on Friday. Although many start-ups from the Cherry portfolio had accounts with the SVB, the vast majority did not set up their main account there.
“That was a wake-up call for the scene, the consequences of a loss of deposits would have been fatal, especially in the USA,” says Filip Dames, founder of the fund for venture capital (VC). The SVB has shown how important it is to work as a company with several banks and to spread the risk. “The strength of a bank’s balance sheet will play an even more important role in the selection of partners in the future.”
It is often more difficult for traditional banks to enter into a business relationship with customers from the start-up scene: the companies are young and often not profitable, says Dames. This is what the SVB specialized in. According to Dames, there are also a number of institutes in Germany that like to work with start-ups.