Nealry 50% of all woke companies focused on 'climate change' did business with failed Silicon Valley Bank
By jdheyes // 2023-03-22
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Go woke, go broke is a real thing. According to reports, nearly half of all climate change and biotech firms in the United States had their banking arrangements with the now-defunct Silicon Valley Bank (SVB). Consequently, a significant number of these firms are currently seeking investment partners who are willing to assume the associated risks, Breitbart News reported this week. KQED, the San Francisco Bay Area public radio station, has reported that a substantial number of these companies received funding from SVB because other banks were less willing to invest in ventures that had a lower likelihood of generating returns: Nearly half of the country’s bio- and climate-technology companies, many of them headquartered in the Bay Area, banked with Silicon Valley Bank. Last year, SVB committed to investing at least $5 billion in the clean tech industry. But even as the FDIC quickly stepped in to guarantee deposits, following the bank’s collapse, many companies have been scrambling to find new banks, open accounts and reorganize payroll systems. To this point, SVB was widely known for incubating ambitious climate and biotech startups, and was a valuable resource for new companies looking for a bank willing to invest in innovative and somewhat risky ventures. In an article for the Wall Street Journal, columnist Kimberley Strassel cited a source who referred to such investments as "subprime business loans." According to a previous WSJ report, she noted, the majority of these companies did not address any critical market demand. Instead, SVB was popular for its readiness to extend "banking services to startups that often weren’t profitable, in some cases didn’t have a product, and would otherwise have a hard time getting a line of credit or a loan from a larger bank.” A technology entrepreneur offered an even more critical characterization of SVB's offerings to law.com. “They’re basically subprime business loans. You’re talking about companies that have no credit profile, they’re burning cash and are unlikely to raise the same type of capital because of interest rates. . . . It was basically social credit," the tech entrepreneur said. What motivates a bank to overlook risk and invest heavily in products or services that are not in high demand? One factor is the availability of easy money and misguided regulations that channeled large sums into the economy while encouraging banks such as SVB to take on more sovereign debt, bolstered by the belief, fed by the Federal Reserve, that interest rates would remain near zero indefinitely. Another factor is government subsidies, such as President Biden's initiative to create a climate industry that would not exist otherwise, Strassel said. The author contends that the current Democratic-led government, which previously funded ill-fated projects such as Solyndra in the 2009 stimulus package, overseen by then-Vice President Joe Biden, is repeating the same error. As Breitbart News reported in 2020, Biden claimed personal credit for the stimulus-backed investment in Fisker Automotive in Delaware to manufacture electric cars. However, the venture failed to produce a single car, the outlet reported. The 2009 stimulus package, officially known as the American Recovery and Reinvestment Act, has faced a number of criticisms over the years. Some of the primary criticisms include the fact that it was too expensive and did not actually stimulate the economy as intended. Critics also argue that much of the funding was allocated towards pet projects and did not create long-lasting job growth. Additionally, some have claimed that the package did not do enough to address systemic issues in the economy and that it favored certain industries over others. In the end, several economists even said they believe that the 'stimulus' and other top-down Democratic policies taken to ward off a market meltdown actually prolonged the Great Recession -- because government is not the solution for such crises; the free market is. Sources include: WSJ.com Breitbart.com KQED.com
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