Good afternoon, everyone. Thank you for joining the Morgan Stanley Technology Media and Telecom Conference. I'm just going to read off one quick disclosure, and then we'll get right into it. For important disclosures, please see the Morgan Stanley Research Disclosure website. If you have any questions, please contact your Morgan Stanley sales representatives. All right, with the housekeeping items out of the way, with us today we have President and CEO of Silicon Valley Bank, Greg Becker. Greg, how are you doing? Good. Hi, Jagger. Great. Well, Greg, love to have you again this year for our chat. Last year we did it in person. This year we're doing it virtual. So happy to have you back. It is an interesting time, Greg. SVB sits at the center of the innovation economy. You think about tech, life sciences, venture capital, banking, and the capital markets. Lots of comparisons are being made to the dot-com boom of last time around. What is your view on the current period? Yeah, I get that question a lot, Jagger, for the reasons that you just talked about. And I'll describe it in what are the similarities, what do I see as the differences, and then I got one more kind of part to the question. When I think of similarities, clearly high valuations is one similarity, right? The second one is there's lots of IPOs, right? Last year, this year, the pipeline is incredibly strong. You saw the big name companies that people have been talking about for a while, Airbnb and DoorDash and those companies going public. So that makes it feel like that's a little bit like 2000. And one more thing happened to me last week that really resonated in my head. I was at dinner with a couple of venture capitalists, and we were with our wives, and we were talking about the market and what's going on, and it's overheated and potentially and why it doesn't, why it makes sense, why it doesn't make sense. And our waiter leaned over, and he asked us, and he said, "Do you guys have any stock tips?" And immediately when I heard that, I'm like, "Oh my God, this is like that's I remember that from back in 2000. That was happening. Your taxi drivers, your waiters, your servers, everyone was asking for stock tips." So those are the similarities. Now, let's talk about the differences. The differences to me are several. First, I've been asked this question for many, many, many years. What I would describe is that the size of the market that the innovation economy is going after compared to 2000, I said, was at least 10 times bigger. Now, fast forward a few more years that I've thought about it more, I actually think that's wrong. I actually think it's probably 25-50 times bigger than it was back in 2000, right? Yes, their valuations are high, but the market opportunity is just so much bigger. Then with COVID, that market opportunity has actually accelerated. That to me is a really, really big difference from what it was. The second part to that is also revenue streams are so much bigger. You can look at the companies that are here at your conference. The revenue levels and the growth rates are very different. So look, there are a few similarities, but there are clearly distinct differences that to me gives a little more tailwind to this continuing from where it is right now. And Greg, what about SVB? So we've seen this market really rip. SVB hasn't been standing still either. We've seen the bank reshape its business itself. Leerink acquisition, West River, recently announced Boston Private. So can you talk a little bit about what SVB is doing and where do you see SVB going in the next five, 10 years? Yeah. So you highlighted a few of the things we've been up to. But let me just take a step back and describe the business and how strategically we're building out each of those components because I think that's important to understand. When people think of Silicon Valley Bank now, and less so right now, but you look four, five, six years ago, people would say that we are a commercial bank exclusively focused on the innovation economy. And while that's still what our claim to fame is, what we're looking to do from a strategic perspective is take that piece and then build out three additional pieces, all with the client and the innovation economy right in the center, right? So you've got the commercial bank. So what we're doing there is building out our capabilities with sponsor finance and mezzanine finance and products and services around payments and FX and all the things that would be commercial banking and expanding with it with syndication so we can scale up with companies, right? That's one piece. The second piece is investment banking. You talked about SVB Leerink. So we acquired Leerink Partners two years ago in the healthcare space, and that's been an incredible acquisition for SVB. They've done phenomenally well, and now we're looking to build into that technology investment banking too, which we can talk about later. The third piece is SVB Capital. This is our investment business. That started out as a fund of funds business, and then it moved to direct equity. And now with West River's acquisition, we're doing debt and kind of all those pieces. So anything where limited partners would want to invest in the innovation economy, that's where SVB Capital is. And the final piece is private banking and wealth. And that's an area where we have not invested to the level that we should have. And so what we wanted to do is accelerate that. And that's really what drove the acquisition that we announced January 4th of Boston Private so that we can really build out those capabilities of private banking for the innovation economy as well. So at the end of the day, what are we trying to build over the next five to 10 years? We want to be kind of one-stop shopping for the innovation economy for commercial banking, for private banking, for investment banking, and for kind of asset management or alternative assets. And if we can do that, right, that's kind of the holy grail. That's what we're going for, and that's what gets me excited about because of the size of the market and where we're headed as an institution. Greg, can you talk about SVB today? It's a U.S.-based bank, certainly has global aspirations and global operations. And so when you talk about the different pillars of the business as you describe them, do you think that this framework is applicable globally and SVB can truly scale on a global basis? Yeah. I mean, when we were much, much smaller, now we manage total client funds of roughly $250 billion. But when we first started looking at global back in the early 2000s, we were $3 billion-$5 billion of assets, so much, much, much smaller. And we said at that time, if we're going to be the bank for the global innovation economy, what we need to do is we actually need to be global. So we need to actually kind of live by what we're saying and live by those words. And so we set up offices in a very short period of time within basically 12 to 18 months in India, in Israel, in the U.K., and in China. And we looked at those markets as saying, those are the innovation hotbeds around the world that we want to be part of. And so we've taken a tack of really building out those capabilities over the last 15, 16, 17 years. Now we've got 250 people in the U.K. We've got 200 people in China building out other markets. Now we've expanded into Canada as well. So your question specifically is, does that, those four pillars, does it fit into this global expansion? And the answer is it does, but it will be done in phases and in waves, right? So commercial banking is where our roots are, and we'll be doing that on a global basis. We've raised money from international limited partners for SVB Capital. With private banking and wealth, that will take a little bit longer. And then with investment banking, they're already doing some deals there because they've become inbound from those markets, and they want to be listed on U.S. exchanges. And so we're working on investment banking deals that are global already. So in each of those four things, they have various stages of how we're doing global expansion. But to your specific question, yes, it does play in international markets, and our strategy definitely has with it that we're going to expand into international markets across all four of those businesses. Yeah, Greg, let's talk a little bit about the venture capital industry. So last year, 2020, record year deal volume for VC fundraising crossing $150 billion. Second, as the stats I have, second best year ever for VC-backed exits. You sit at the center of that. Can you give us your views and thoughts on 2021 and beyond with the VC venture raising and the exits? All right. Well, this is where I'll make some predictions, and it's good that our general counsel isn't on the line to back me away from making predictions. But I'll start with this. When I think of the venture capital flow and how much money is going to go in the outlook, here's what I can almost promise, almost promise, that it's going to be substantially larger over time. Now, what I don't know, I can't guarantee it, but what I don't know is how that zigzag will occur between now and whatever that ultimate time period is, right? Because what we know is that the innovation economy, I don't think anyone would argue, right? You guys have this technology conference, and you can see what's happened over the last three, four, five, six years. The market has expanded dramatically. Venture capital flows have expanded dramatically because innovation's more at the center of the global innovation economy or the global economy, right? So that's all trending things in the right direction. But could it stumble? Could it drop next year? Could it take a few years to get back on that trajectory? Possibly. But you have to believe in the long-term viability of the innovation economy as far as the global economy. And I 100% believe in that, number one. Number two, the market's only accelerating. And so that will help just kind of move that forward. And the final piece is this: $150 billion, don't get me wrong, is a lot of money. But $150 billion in the global economy, the global market, still isn't much money. So when you look at how big technology is globally and you look at $150 billion relative to the size of the market, I would argue there's a lot more room for more money in venture capital to be deployed in innovation companies globally to expand. So we're obviously bullish long. I can't, again, guarantee that it will be up every single year, but I can pretty much guarantee over time it will be higher. The question, again, is just the zigzag between now and then. Greg, that's a great way to put it, in long-term bullish, but zigging and zagging there. I think your GC will be okay with that. And let's talk a little bit about the fintechs. Certainly, a lot is being made of digital disruption, COVID being accelerant. You're seeing fintechs come to market, new ones being born. There was an interesting quote by Jamie Dimon recently where he talked about being scared shitless of the fintechs and that they potentially operate on an uneven regulatory playing field. How do you think about that, just given you are sitting at the center of enabling some of these fintechs? You're often the first ones to see these fintechs as they're being born in the valley. They come to you for funding. They come to you to really get their business up and going and supporting them. Yeah. I'm excited and scared at the exact same time, right? What motivates me, what motivates SVB is two big things. One is the opportunity we have, right? As you said, we're kind of right in the center of the innovation economy and believing what I just said about how it's going to continue to expand. That is an opportunity that I always talk to our team about how we just need to make sure that we're capitalizing on the opportunities that are given to us, right? The second thing that drives me is a quote from Andy Grove from many years ago, "Only the paranoid survive." And so those two things are what drives me, what motivates our team. And so that's what I talk about being both excited and scared at the same time. What the fintechs are doing, the value that's been created, the market value has truly been astonishing. The speed and the pace by which they move, I would argue, from my standpoint, is incredibly envious when I think about how fast they make decisions. And there's a lot we can learn from it. And what we tried to do is say, we need to be as nimble as we possibly can. And yes, we're regulated, and we have a lot of other supervisors taking a look at us, but we can be more agile. We can be more nimble, and we have to be. And that's both the opportunity and kind of that paranoia that we have to. We have to do it because if we don't do it, other people will. And so we partner with fintechs. We try to work with them as much as we can, but I'll call it we keep one eye open at night because you never know your partner could be your competitor in a short period of time. So I understand the point that was made and definitely understand it to a significant degree, but again, it's both an opportunity and a kind of a worry at the same time. Keep your friends close, potentially your enemies closer. Yeah. That's a great phrase. Great phrase. Let's talk a little bit about the SPACs, right? Certainly, SPACs are here. You read about them every day. They have been an active takeout for many of the fintechs and the portfolio companies. How do you think about the SPACs? How is SVB playing with the SPACs, capitalizing on the opportunity, and where do you think the SPAC market actually goes from here? Yeah. It's been truly exciting to watch it seemingly come out of nowhere last year and gain momentum at a rapid pace. I know you guys know this because you guys spend a lot of time on doing SPACs and do a great job. We have, in our SVB Leerink business, our investment bank, we've been involved in some SPACs, and so we have some exposure to it as well. You know, it's a really interesting way for these companies to go public outside the traditional IPO, and it's created, I think, a lot of wealth, a lot of liquidity. We've benefited from the liquidity that's being put in that market, so how we think about it is we can look in our portfolio because a lot of our portfolio, the ones that are the SPACs, are actually looking at targets, right? So we can help sort those deals, source those deals to make sure that the SPACs are aware of the opportunities and try to create some connections between the two. So that's one opportunity. We obviously get the benefit of the liquidity when money is raised. So that's another benefit we get. So I think it's an interesting alternative that will continue to evolve. Now, your last question is, what does the crystal ball say? What is it going to look like? It will be like, my view is like most things in the markets that we serve and that you guys take care of, right? When things have momentum, they almost always get overdone. And when they get overdone, they correct. And the question when this corrects is, how will it then kind of redo itself? What will be the next kind of version 2.0? Or maybe this is 2.0. We're dealing with the SPACs. Maybe what version 3.0 is. I don't know what that looks like. I don't know when it's going to happen, but when there's too much of a good thing, and I think that SPACs are kind of in that category right now, there's clearly going to be some sort of correction that will occur. When and what level of severity it will be, that I can't predict. I'm sure you guys have an opinion about it. I'm sure you guys have been talking about it a lot at this conference, and I'd be curious to go back and listen to what you guys are saying and how you guys see it playing out. Greg, I think we would say we don't know what's going to happen, but it'll zig and zag its way there. Yeah. Going back to your analogy, and let's talk about Leerink for a bit. You mentioned Leerink and all the terrific things it's been doing and how great of an acquisition that's been. So Leerink is healthcare investment banking. How do you think about investment banking broadly? There's many different pillars and verticals to it. So how do you think about investment banking and kind of what would be the next logical verticals and how you would build that out? Yeah. Let me just take a step back before I talk about what's next. Let's talk about how we ended up with Leerink Partners and the team. And it's an interesting tale on M&A in general. And we haven't done a lot of M&A, so I'm not going to give you my point of view. I'm going to share a point of view who I think is somebody that is probably the best who's ever done M&A historically. I've gotten to know, because I'm on the board and chair of TechNet right now, John Chambers pretty well. And as we started to think more about acquisitions, I was picking his brain on, when you look at acquisitions, what are the most important things and how do you make it work? And one of the things that really struck me when he and I were talking about it was this. He said, "There's a lot of business rationale for acquisitions, but you have to make sure that it's a cultural fit. You got to make sure it's a cultural fit." And that's especially true. It's true in technology companies, but I would argue it's even more true with people businesses, and investment banks are people businesses. And so when we came about thinking about bringing on board or acquiring an investment bank, we talked to a lot of different firms, but the one that stood out was Leerink Partners. And I give Jeff Leerink and Jim Boylan and Joe Gentile and the rest of the team, Dan Dubin, the rest of the team credit for being such good people and such a good fit from a cultural perspective with us. So it starts like that's the real rationale behind it. And so when you get past that, you go, "There's a great business there." Now, we did not predict. My crystal ball did not say that in two years the healthcare market was going to skyrocket and the ECM business was going to take off and they were going to absolutely kill it from a numbers perspective. We certainly believe in healthcare being a long run. It was going to be up and to the right. We just didn't expect it to be this fast. So they've done a phenomenal job. And what we said with Jeff and the team very early on is, "This just isn't. We're not going to just add you to SVB and then stop there." We wanted to continue to build out the platform, again, going back to those four pillars that I talked about. And so what we did was we first looked at how do we round out the capabilities with tech or healthcare investment banking. So we just announced recently that we added Barry Blake as a co-leader for the investment banking platform. He came from Guggenheim. He's got a great background. And so we feel really, really good about adding that capability with leveraged finance and building that out. But the next step will be in technology investment banking. And look, to give you guys and the other top firms, and there's only two or three of you, you guys have done an unbelievable job. And there is no plan in our playbook to compete with you in any way. But what we do believe, based on what we have unique to us, is on smaller buyout deals, small and medium-sized buyouts. We believe there's some advisory work that can be done based on our portfolio, and so that'll be the next step that we look at doing, both kind of advisory on sponsor finance and then looking at some international opportunities, but so far, SVB Leerink has been phenomenal. Credit the team and how they've operated, and yes, we look at making more investments and building out our capabilities in investment banking. You hit on something very interesting there, Greg. You talked about culture being such an important part of making acquisitions work. But when you step back and look at how SVB's grown over the last 10, 20 years, certainly it's gotten much bigger. You've added operations globally, added different verticals domestically. Can you talk about how do you retain and recruit the best talent? How are you keeping your culture together as you're growing? Because that is just as important. Yeah. It's incredibly true. I 100% believe that culture is. Strategy is important. Culture, I would argue, is even more important to the success of a business. And so even though we've gotten bigger, we want to make or have people feel that we're a small organization, right? We're getting close to 5,000 employees. Again, when I started a long time ago, 28 years ago, we had about 150 employees. So it's changed a lot, but it's been over a long period of time. And we think about what attracts people to SVB. First of all, the best example is the people that are listening to your conference, the Morgan Stanley Technology Conference. What you're seeing is the coolest, most interesting companies in the world. And getting exposure to them, having a feeling that you played a part in their success, right? You made an introduction to them. You made it easy to bank with us. You made their lives easy by making an introduction to a CFO or somebody else that you helped them. That you can, in the back of your mind, say that you had a role in having these most innovative companies be successful, to me, is inspiring. It inspires me and it inspires our people. So that's one piece of the puzzle. The second piece of the puzzle, again, is we are big enough as a company to provide a lot of capabilities. So you can play in the bigger leagues, but we're small enough that each individual that's at SVB feels like they're playing a part in the overall company's success. So I would say it's one of those things where we're the right size for people to feel like they make a difference, right? And we really do live by. We're not perfect at it, but we truly live and breathe by as much as we can our values. And we talk about it all the time. We talk about how the collaborative nature of the organization, how we need to work together, and that's a competitive advantage. And we want people who want to work on a platform where it's about everybody working together, not individual stars. The stars are the organization and the fact we work together. It's not about individual stars inside the company. And making sure that that stays top of mind is critically important. And we ask our employees to challenge us to make sure that we're not losing sight of it. And we don't always get it right, but we do reflect on it and we try to make it better every single day. Got it. Greg, let's talk a little bit about payments. Certainly, a lot is being made of payments, a lot about Bitcoin. Can you talk about what SVB is doing in payments, both, and I'll break it down into corporate payments, real-time payments, and then would love to get your views on Bitcoin and how SVB is playing in that? Sure. That's about a 20-minute answer to the question overall, so I'll try to be succinct about it. In global payments, obviously, it's critically important, especially as we scale up, right? Our strategy is we bring companies in, about 6,000-7,000 new companies, early-stage companies in each year. And then our whole goal is to grow with them until they become large post-public companies. We want to support them when they're doing billions of dollars in revenue. And so to be able to do that, you have to expand your corporate payment capabilities, right? So we have a whole team of people that really make sure that on the global treasury that we're doing everything we can either directly, so we're doing it ourselves, or with partners who can help us bring capabilities that maybe would be too difficult for us to do on our own, right? So that continues to be built out. And I would say we're doing okay, but we need to do even better there. And so we've added a lot of really good talent in that area, and that's an area we're looking to expand into. So faster payments or real-time payments, again, both what the Federal Reserve is looking to do with FedNow and other programs, we're looking to move that up and speed that up as fast as we possibly can, no pun intended. But we certainly know that real-time payments, moving money quickly, certainty of settlement, all those things have to be done. And so we think about our CIO, who came from PayPal, and he's got a background in payments. Our head of payments came from Capital One, and she had her own startups in the payment area, and one actually did work in cryptocurrency. And so we're building out that product set, showing how we can add those capabilities to the fintechs that we were talking about a few minutes ago. And so all those are in various stages of being built out. Now, your last question is probably the one that's just fascinating right now. I would say that we have tested a lot and tried to work a lot in the crypto space. The challenge historically has been with a lot of the crypto businesses that their regulatory scrutiny was not up to the level that needs to be for a bank like SVB or any larger bank because of what our regulators require that we are doing. And so what we've tried to do is find our places and where we can play. And we're working in our strategy and innovation team and kind of saying, "Okay, now that things have matured, what's next?" And so I'd say we're making a lot of bets or thinking about what those bets will be in the space. But I'd say we're not quite ready to embrace cryptocurrency, broadly speaking, on the SVB platform. I know that will come. We're just not quite ready at this point. Got it. It's a great segue, Greg, for my next question. I'm assuming crypto will eventually be there, but maybe not today. When you think about what are the greatest opportunity sets for SVB and talk about in the near term and then in the long term, both with global, U.S., China, Latin America, Europe, you're one of the few banks your size that has the ability to actually operate in China. So if you can talk about just near-term, longer-term opportunity sets. Yeah. So it's going to be a hard question to answer because, again, one of the things that we have, because of the market that we serve, we have so many opportunities. It's actually probably the biggest challenge that we have as well, right? Prioritizing and making sure that we're putting the right resources behind the greatest opportunities. And so I'll go back to what I said a few minutes ago or said at the beginning, which is the four businesses. When I think about the opportunities we have in commercial banking, it's, again, payments. It's sponsor finance. It's more global operations. And there's so many things that are working there. And that is, a commercial bank, is so critically important to us. One of the things I need to catch myself on is we look at these other businesses to make sure we're not underinvesting in that part of the business because it's so important, not just today, but in the future. So lots of opportunities both domestically and globally. Investment banking, both domestically and globally and building on our product set. And private banking and wealth. That's the one that I probably believe where we are relative to the opportunity is we have the most headroom to go. We're just scratching the surface on what our capabilities will be. The acquisition of Boston Private will help. But I think there are so many more things that we can do there. And then finally, with SVB Capital, that's really both domestically and globally. We can take that to a. We're at 6.5 billion right now under management. There's no reason it shouldn't be a double or triple from that in the future based on the different products and opportunities that we have. So the challenge in answering that question, Jagger, is that I look at it and say, "We've got opportunities across all four of those things." And it's probably what the team is frustrated most by me is that pressing on all four of these things are all critically important. So it's hard to answer the question, which one or two or three things. We just have to make sure that we have the capabilities and the infrastructure internally to make sure that we can manage our growth and capitalize on all the opportunities that we have. So it's a great place to be, and it's going to be exciting to see play out over the coming years. Great. Well, Greg, hopefully you're around for the next 10, 20 years because it seems like there's a lot of opportunities ahead of SVB and a lot of prioritization that you need to do to make it happen. So that is the time we have for today. Let me thank everyone for joining the Fireside Chat. Greg, thank you for joining us and enlightening us on your views on the economy and on SVB. Thank you. Thank you. Thank you, everyone.