You Are in Technology, but Actually Work in Finance

I'm sorry you had to learn this way, that we haven't discussed this before.

• If your money or 
• your friends’ money or 
• your Etsy reseller’s money or
• your employer’s money or
• your payroll company’s money or 
• your investors’ money or 
• your future investors’ money
• your investors’ limited partners’ money 
• were frozen this weekend in the Silicon Valley Bank Run,

You might have been working in the financial sector without realizing it.

No sarcasm is implied. It sucked to find out like that. 

In fact, if you were working in a pre-profitability or low-profitability company that relied on investment in your future cash flows, you were a packaged and polished product of the investment industry.

This past weekend, several "tsk, tsk" statements pointed to the resilience of companies that grow through customer revenues and were happy and calm because they never raised the capital that introduced them to Silicon Valley Bank. While I personally favor the customer-revenue-first path when it works, it is not really an option for those in biotech, cleantech, and much of healthtech. Before they can earn that customer cash flow, these companies need to invest in technological development and scientifically verifiable evidence.

A Message for the Builders: You Work in Finance

So this message is for the builders of complex stuff. Builders need capital to create something valuable that is aimed at shifting the outcomes in health and our ability to adapt or regenerate our biosphere. 

What that means – when you are in a company whose value is in your future cash flows – is that you work in finance, even when you still own most of the company. 

It was precisely these types of firms that Silicon Valley Bank catered to: brand new companies with sudden cash inflows and unpredictable future revenue streams.

• SVB provided these companies with venture debt. 
• And mortgages. 
• And credit cards
• And cash sweep services
• And premium wine banking for founders and investors who wanted to own vineyards 
• And credit facilities and investment vehicles for the pro-social ever-helpful venture investors who backed these companies
• And the same products to insufferable puffer-coat-wearing capitalists who led a run on the bank from a group chat

In order to understand the finance industry, you will need an opposable mind.

You are networking with community-minded, thoughtful, and supportive change-the-world investors and founders who want to help each other out.

And you are swimming with cut-throat utilitarian sharks who will cut off their bank to spite their industry.

This set of charts and reflections will help you come to grips with the fact that you work in finance.

To find out the 6 Painful Truths: You Are in Technology, but Actually Work in Finance