Extending Startup Runways, the PearVC Partnership, Banking Innovation Trends, & the Houston Rodeo, Featuring: Chris De Ayala
Chris De Ayala is an Assistant Vice President for Pacific Western Bank in Austin, Texas. He is also a Founding Texas Venture Board Member of the Texas Venture Alliance as the banking advisor.
Chris talks to us about the Texas startup and general business ecosystem growth, covers new trends that startups and investors should know about when selecting a bank partner, shares his past volunteer experience for the Houston Rodeo highlighting Texas’ oldest industries, and more.
Pacific Western Bank has been a pillar in the venture capital and startup scene, not only by attending and sponsoring activities here in Austin, Texas, including our Texas Venture Crawl, but also by hosting and guiding discussions at conferences around the country in bigger regions like New York and California. Share with us your views about the potential of Texas, compared to the rest of the country… especially you being from Houston!
With the business-friendly nature of the state, Austin and our other major cities have been thrust into the spotlight for founders to flock to and ideas & businesses to thrive. This isn’t necessarily new to most Texans, given entrepreneurship is part of our history from the early days of oil prospecting to renowned life sciences research to Texas Instruments and Dell.
Local venture capital firms have been raising record-breaking funds and capital is being deployed at larger volumes to the pockets of Texas-based companies, which has definitely supported our ecosystem. Furthermore, we have all benefited from larger well know tech companies and serial entrepreneurs moving to the state. Austin has had its fair share of time in the limelight, but places like Houston and the DFW area shouldn’t be overlooked given their track records of success and notable supporters of the scene.
It’s amazing to see our state rise to the ranks of other regions that have historically been the centers for innovation, and working for an organization that supports that growth is quite special. I had a chance to sit in as a judge for the first time at the Rice Business Plan Competition earlier this year in Houston, which was a wonderful experience, and I cannot speak more highly about how well the program is run; just one example of an organization that supports the community. As a native Houstonian, I am excited to see the city’s startup scene continue to prosper.
What are the new trends in banking that you can help solve for startups and investors?
The last year has seen a decline in venture capital funding, which has led many startups to seek additional options to extend runway and fuel their operations. As such, the venture debt offerings we provide have become an effective solution to supplement fresh equity to bolster companies’ capital positions during turbulent times.
Additionally, in the wake of the banking crisis earlier this year, many companies have rethought their treasury management practices. This resulted in an increase in demand for our insured deposit products, and, fortunately, we were able to onboard new customers with ease due to our investments in our digital banking platform over the years.
Although the banking sector has stabilized, these offerings provide founders with additional peace of mind. With the emergence of new fintech and other new entrants into the venture banking space, we try to stick to the basics of being a good partner during the good and challenging times, provide white glove customer service, and go out of way to make intros for our clients.
Are there more specific types of businesses that are best fit for your technology practice? What might those be and why.
We most often work with B2B SaaS businesses, but innovative business models take on many flavors, so not every company we work with fits that mold 100%. PacWest’s venture banking customer base is diverse, covering a wide range of industries from enterprise, SMB and consumer-focused software solutions to fintechs, robotics and life sciences startups; we also serve venture capital and private equity firms as well.
The best time for us to engage in venture debt discussions is when a company is fresh off from raising its first institutional VC round of equity. As a bank, this gives us comfort knowing a company has sufficient runway and is supported by sponsors who can guide it through any challenges it may face. We are proud of the relationships we have built with investors, and our quality work and reputation has led to many firms recommending us to their portfolio companies.
What are some popular resources you offer startups and investors, and why did Pacific Western Bank decide to create these offerings? How have they been useful to your clients?
For companies at the Pre-Seed and Seed stages, our Startup Services program provides startups with access to a high-yield interest-earning account as well as a perks program with discounts to dozens of vendors. At these stages, capital efficiency is of utmost importance to founders, so the ability to earn meaningful interest income on cash deposits and save some money on services that would be purchased anyways is a valuable benefit.
Our more traditional venture debt solutions are specifically tailored to each company’s needs; no two deals are the same. These solutions typically follow a round of venture capital funding, and provide companies with non-dilutive capital to extend runway. We have lent to companies as early as their Seed round (and in some cases at the pre-revenue stage), but most commonly we engage in debt discussions with companies after they raise a Series A or B. In addition, I touched on this earlier, I believe the other value-added services venture banking groups like ours provide stands out to startups and investors; they know we might open the door to other investors in our network or we might be able to make other valuable connections.
For more information regarding our Startup Services program please click here.
Pacific Western Bank has partnered with PearVC. Tell us more about that and if there are any other partnerships that serve the startup and venture capital communities.
Our partnership with PearVC has been exciting as we are able to serve Pear’s pre-seed and seed portfolio companies with our Startup Services offerings, a real testament to the benefits we provide. Read more about the partnership here. If you have a chance to read about how PearVC’s founder, Pejman Nozad, got his start in venture investing, you definitely should as it embodies what it means to pursue the American Dream.
As a bank for the innovation economy, we are always striving to be leading in terms of technology adoption. PacWest has a dedicated team focused on screening startups and their technology solutions to add to our tech stack, whether they be fintech-oriented to improve our banking operations or services applicable to large enterprises of our size. Some recent examples include our partnerships with Horizn, Alloy and Raisin to support our efforts in providing top-tier services to our customers. This focus also gives us an opportunity to not only provide startups with our banking services, but become one of their customers as well.
Additionally, check out participating offers from the perks program here.
You’ve spent time at a few notable financial institutions– but we also see you have experience at the Houston Livestock Show & Rodeo as a Junior Committeemen! What did that entail? Have you noticed any transferable skills that might’ve proved to be useful in banking or in your professional development in general?
My grandfather volunteered for the Houston Rodeo for over 40 years, serving as a Director in his final years, so the Rodeo has been an important staple for my family. I have very fond memories of attending the Rodeo with my parents, siblings, aunts, uncles and cousins, so when the opportunity to give back became available, I didn’t hesitate to get involved.
The Rodeo’s main goals are to provide college scholarships to high school students participating in FFA programs across the state and to highlight Texas’ oldest industries - ranching and farming. Volunteering as a Junior Committeeman was an unforgettable experience, allowing me to see firsthand all of the behind the scenes work that goes into running the events. I left with an appreciation of the hard work ethic and manual labor it takes to raise cattle and grow crops, a mindset that applies to office jobs as well. In a world of ever evolving innovation, it is humbling to realize that technology alone does not put food on our tables.
What other professional accomplishments are you proud of and why? Please share any moments, especially that might help others in your practice.
One thing that I am proud of is working on a team to win a new customer earlier this year during the market turbulence within the banking sector. In the midst of all of the chaos, we were able to build rapport with the management team of the startup and earn their trust as the ideal partner to work with. I think it really speaks to our ability to battle through adversity and structure our offerings with customers’ best interests in mind, which is what our practice is all about.
Learn more about Chris on his Texas Venture membership page here.