- Donnel Baird, founder and CEO of BlocPower, banked with SVB and First Republic.
- He scrambled to confirm wire transfers during a flight from Paris to New York.
- Climate-tech companies hope more investors step in to fill SVB’s void.
This article is part of Insider’s weekly newsletter on sustainability, written by Catherine Boudreau, senior sustainability reporter. Sign up here.
It was the worst time for Donnel Baird to be on a transatlantic flight with spotty WiFi.
A listserv for tech CEOs had blown up overnight with hundreds of panicked emails about Silicon Valley Bank and efforts to pull money out of a go-to lender for the industry. Concerns grew about the fate of another regional bank, First Republic.
Baird, the founder and CEO of BlocPower, a climate-tech company electrifying buildings in underserved communities, had more than $1 million in deposits at SVB. BlocPower’s latest $24 million funding round and $130 million line of credit were with First Republic.
“We’ve worked for 10 long, crap years to get to the position we’re in now, where we’ve raised a round of financing that allows us to fulfill our mission of clean energy in low-income communities across America,” Baird told Insider. “If there’s any risk at all of losing that money, you have to pull it out.”
He hatched a plan with his team to wire the funds to other banks, then boarded a plane in Paris headed for New York. But some transactions required Baird’s verbal approval. After convincing two flight attendants to restore a bad WiFi connection and holing up in the bathroom for calls, Baird managed to get most of the wires to go through.
He’s among the tens of thousands of SVB customers who were relieved Sunday after federal regulators took over the bank and guaranteed access to cash. But now, climate-tech companies are bracing for the ripple effects of SVB’s crash, just as funding was picking up from venture capitalists, the Inflation Reduction Act, and some traditional financial institutions.
SVB worked with more than 1,550 clients in the climate-tech and sustainability sectors, particularly community solar. Baird said SVB was a great partner for early-stage startups because, unlike many traditional banks, it would provide loans, credit cards, and bank accounts. SVB was also trying to work with more founders and investors of color and from disenfranchised backgrounds, Baird said, which is critical when less than 3% of venture capital goes to women or people of color.
SVB’s willingness to take risks on climate startups wasn’t connected to its failure, which was more a result of mismanaged investments and a bank run. Still, Baird said he worried it would create a “chilling effect” on investment.
“People who aren’t in Silicon Valley are thinking, ‘Look at these rich, immature tech bros who cannibalized their own bank. Why would we send them pension-fund dollars?'” Baird said. “But this isn’t wealthy tech bros. The network of climate companies that BlocPower is a part of creates jobs in all 50 states.”
Baird said investors from Wall Street and beyond will need to help finance the clean-energy revolution because there isn’t enough money from climate-tech VCs alone.
Steph Speirs, a cofounder and the CEO of the community-solar company Solstice, told Insider she thought this would be an opportunity for other lenders to step up, including real-estate investors and community-development banks.
“This may slow down some discrete projects with loans and financing from SVB,” she said. “They will have to find new financiers, but this isn’t going to slow down our industry. Climate is the greatest source of economic opportunity in the 21st century.”
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