Since the collapse of Silicon Valley Bank (SVB), worries persist about where the value will land to service startups financially. SingleStore CEO Raj Verma joins Yahoo Finance to discuss the collapse of SVB and its impact on the present state of venture capital.
Verma explains that the emphasis on "growth at any cost" has subsided: "I think investors are looking for a leveraged growth model and I think the companies are resulting to working on profitable growth, et cetera. So that's a big change in the Valley––or globally, I would say in the past 12 months. I do think that there isn't a dearth in capital. However, only the good companies are being able to raise capital versus the scenario in 2021 where even a mediocre company can probably raise capital. So for sure it's harder to raise capital now than it was probably 18 months ago."
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Editor's note: This article was written by Nicholas Jacobino
Video Transcript
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JULIE HYMAN: It has been one year since the Silicon Valley Bank collapsed, and some venture capitalists, remember, contributed to the run on the bank by encouraging portfolio companies to pull out their funds. In turn, the bank's demise led to worries about where the Valley would go to service startups financially. Here to help us dig into lessons we've learned from the SVB collapse and to talk about his new book, "Time is Now, A Journey to Demystifying AI," is the CEO of SingleStore Raj Verma. Thanks for being here, Raj. It's good to see you.
RAJ VERMA: Good to see you too, Julie. Thanks for having me on. appreciate it.
JULIE HYMAN: So we talked one year ago, and you expressed very firm confidence that startup culture was going to be fine, that the Valley was going to be fine, that it was going to survive. Because at the time, there was quite a lot of doom and gloom on that front. How have things changed, though, in the past year since the collapse?
RAJ VERMA: Yeah, I think I was listening to Sheryl before I came on. And I do think that the emphasis on growth at any cost has subsided. I do think that investors are looking for a leveraged growth model. And I think the companies are resorting to working on profitable growth, et cetera. So I think that's a big change in the Valley, or globally, I would say, in the last 12 months.
I do think that there isn't a dearth of capital. However, only the good companies are being able to raise capital, versus a scenario in 2021 where even a mediocre company could probably raise capital. So, for sure, it's harder to raise capital now than it was probably 18 months ago. Or, in fact, two years ago.
I do think that the opportunity of generative AI is the biggest opportunity in my career that I have seen. And I've gone through quite a few sort of these technological enhancements in my career, internet, cloud, all the rest. And I think this is going to be bigger than all of them put together. So still very, very interesting companies in the valley. I do think that the growth at all costs has gone away, and more fiscal responsibility has crept into the businesses, which is good. I think only the good ones would survive. And that's always the laws of physics, so to speak. And it's coming true.
