Read the full letter Silicon Valley Bank’s venture arm sent to LPs about the Chapter 11 bankruptcy

March 17, 2023, 5:23 PM UTC
A Silicon Valley Bank office is seen in Tempe, Ariz.
Following Silicon Valley Bank’s failure last week, its former parent company, SVB Financial, has filed for bankruptcy.
Rebecca Noble—Getty Images

Shortly after Silicon Valley Bank’s former parent company announced it had filed for Chapter 11 bankruptcy Friday morning, the bank’s venture capital firm issued a letter to its third-party investors, assuring them that the venture arm was still pursuing a potential sale and that the bankruptcy would help preserve the investors’ brand.

“We wanted to make sure you heard directly from us about what this means for SVB Capital and our investors,” reads the letter, which was obtained by Fortune.

SVB Financial Group, the former parent company of the bank that was taken over by the FDIC last week, becoming the second-largest bank failure in history, said it expected the bankruptcy to “preserve value” of its remaining businesses. While the commercial bank is currently under the control of the Federal Deposit Insurance Corporation, SVB Financial Group is still the parent of SVB Capital, the bank’s nearly $10 billion venture capital operation based out of its Menlo Park offices, and SVB Securities, the investment banking division. The investment funds and corresponding portfolio company holdings are legally held separate and will not be included in the bankruptcy proceedings, according to the company. 

Shortly after the announcement this morning, SVB Capital blasted an announcement with some additional information to its investors, who are referred to as limited partners. The letter clarified that the parent company is still operating as the “investment adviser” for the venture funds, meaning that it will still be responsible for providing investment advice to the funds, as well as managing those investments. In other words, the venture capital firm’s operations appear to still be subject to the Chapter 11 proceedings, even if the investment commitments and investments themselves will not.

However, the letter sought to assure investors that the venture funds would still have “access to the talent, technology and operational infrastructure necessary to operate its business normally.” 

Silicon Valley Bank’s venture investment arm, which invests money on behalf of foundations, sovereign wealth funds, and pension plans, invests directly in startups, such as Opendoor,, or Olive. It also invests in other venture capital fund managers, such as Sequoia Capital and Accel.

In its letter to investors, SVB Capital said that SVB Financial Group, which is also an investor in several of the funds, according to the bank’s annual report, will continue to meet its capital call obligations, and the venture capital firm is continuing to source deals and may issue its previously expected capital calls “as early as next week.”

All of this essentially means that for the time being, SVB Capital is doing its best to maintain some sense of normalcy and better position itself for a potential sale—though it’s unclear what the commercial bank’s demise, and now SVB Financial Group’s bankruptcy, will do for the team’s morale and their ability to land new deals.

Here’s the full letter the venture capital firm emailed to investors Friday morning:

Dear Trusted Partners,

Earlier this week, we expressed our commitment to being as transparent as possible as we navigate the next chapter for SVB Capital. We are reaching out today with an update regarding SVB Financial Group, the holding company that operates SVB Capital. 

Early this morning, SVB Financial Group filed a voluntary petition for a court-supervised reorganization under Chapter 11 in the United States Bankruptcy Court for the Southern District of New York. We wanted to make sure you heard directly from us about what this means for SVB Capital and our investors:

  • The SVB Capital funds and their general partner entities are not included in SVB Financial Group’s Chapter 11 proceeding and SVB Capital is operating in the ordinary course. SVB Capital funds and their general partners are separate legal entities, distinct from SVB Financial Group. For avoidance of doubt, investor commitments and portfolio investments held by the SVB Capital Funds are not included in the Chapter 11 filing. SVB Financial Group continues to be the investment adviser to the SVB Capital funds. 
  • SVB Capital has all of the resources necessary to operate its business normally throughout SVB Financial Group’s reorganization process. As noted in the press release issued by SVB Financial Group earlier this morning, the company believes it has approximately $2.2 billion of liquidity. We have arrangements in place to ensure that SVB Capital continues to have access to the talent, technology and operational infrastructure necessary to operate its business normally. In addition, the SVB Capital funds continue to have access to sources of funding, including subscription credit facilities and investor and general partner commitments. 
  • We remain focused on delivering value for our LPs by investing in some of the world’s most innovative fund managers and companies. SVB Capital remains in a strong position with a valuable portfolio, ample resources and solid relationships in the innovation economy. We remain confident in our ability to continue sourcing high-quality deals while delivering high-quality investment opportunities to our funds. You can continue to access and monitor your investments through our platform. 
  • We are continuing ordinary course operation of the SVB Capital business. We are committed to honoring our contracts and commitments with our clients, service providers and employees. We will continue to work with Silicon Valley Bridge Bank, N.A to support SVB Capital’s normal business operations. As a result of ordinary course current and forecasted funding obligations with respect to underlying fund investments, we may issue capital calls for some of our funds as early as next week. Please note that we expect that SVB Financial Group will continue to fund its ordinary course capital call obligations to the SVB Capital funds and general partner entities.
  • SVB Financial Group is exploring strategic alternatives for SVB Capital. We are still in the early stages, and SVB Financial Group’s Chapter 11 process is likely to make the sale process orderly and more efficient for interested buyers, as it will help preserve our brand and the value of the SVB Capital business. We will keep you updated as we have news to share.

Looking ahead, we will continue providing you with the same high-quality services and support you have come to expect. We will update you as more information becomes available. If you have additional questions, please reach out to our Investor Relations Team at [Fortune has removed the email address]. 

On behalf of the SVB Capital team, thank you for your continued trust and support. 

Best regards,

The SVB Capital Team

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