Innovative Fund Finance: Tailored Solutions for Venture Capital Firms and General Partners

The venture capital industry has experienced significant volatility in recent years, including waning dry powder, moving interest rates and banks and non-bank lenders entering and exiting the space. Especially in changing times, those in the VC sector know how much partners matter to success. A banking partner is an essential piece of that puzzle.

Bridge Bank is widely recognized as a desirable venture and business lending partner for startups and technology and life sciences companies. Beyond venture lending, Bridge Bank’s Equity Fund Resources Group also offers a broad range of solutions, including attractive financing and banking options for venture funds and General Partners. Drago Sipovic, Bridge Bank’s Head of Equity Fund Resources, explains.

Q: How does Bridge Bank fit into the unique landscape of venture capital funding?

Bridge Bank has deep experience in fund finance and a proven ability to help VC clients navigate the diverse market conditions the venture capital industry has experienced in recent years. We offer trusted advice and sophisticated solutions to help funds and their portfolio companies do business in any climate.

Q: What differentiates Bridge Bank in this sector?

Experience and solutions. Bridge Bank’s team has expertise in designing and providing solutions such as subscription facilities, general partner contribution loans and management company working capital lines of credit to venture capital and private equity funds. These services are designed to enhance investment efficiency, improve internal rate of return (IRR) and support liquidity needs. Our team also offers sophisticated cash management tools and support for portfolio companies.

Because so many VC-backed tech companies bank with Bridge Bank, our VC clients can access a subscription facility to provide a liquidity backstop solution, reducing the need for additional capital calls. Avoiding the need for a sponsor to call capital to fund an investment in a down market is just one example of how our team offers a truly differentiated service to clients. This is possible because of Bridge Bank’s nationwide reach in the innovation market and the strength of our parent company, Western Alliance Bank, a commercial banking focused bank with more than $80B in assets

Q: What should General Partners (GPs) know about banking with a group that knows venture funds the way you do?

We offer a core advantage: a GP line of credit that doesn’t require a personal guarantee. Our GP commitment facilities are a substantial tool for managing cash flow without impacting individual financial profiles. It’s one way VC clients can benefit from having a relationship with the same group that banks many portfolio companies.

• What to know: Having everything in one bank — where a venture capital firm has an account and the GP has a line of credit — minimizes hassle. You’ll know exactly who to turn to when making a new investment, with the certainty of execution to get business done quickly.

Q: Bridge Bank emphasizes relationships. How do you put that into action for VCs?

The VC community knows how much relationships matter, and they understand the importance of getting deals done efficiently. That’s how we work, too.

Bridge Bank clients benefit from a dedicated point of contact and a team that deeply understands their business and fund. That results in a level of relationship and service you don’t get everywhere. Knowing our clients so well results in an efficient process and certainty of execution that clients rely on.

• Specialized teams with national reach. While rooted in Silicon Valley’s tech ecosystem, Bridge Bank has a national presence, with offices in technology hubs across the country.

The takeaway: Fund finance should be backed by flexibility and ingenuity. 

In addition to traditional commingled funds, Bridge Bank serves concentrated funds and those with high-net-worth investors. Clients also appreciate that we’re quick to approval and closing.

Bridge Bank has stood the test of time, helping clients across industries grow through various stages for over 20 years. See how Bridge Bank’s Equity Fund Resources Group can help you meet your needs.