Despite rise in shaky loans, tight relationships with technology start-ups, venture capitalists fuel big profits for lender TINYCO was in big trouble last year. The mobile-game start-up owed $10m to Silicon Valley Bank (SVB) but did not have the money to pay it off. Company co-founder Suleman Ali was so stressed that he broke out in hives.Then, Marc Andreessen, the prominent technology investor and one of TinyCo’s directors, made a call to SVB. His firm, Andreessen Horowitz, borrows from the bank, and SVB invests in start-ups through the giant venture capital firm.The bank gave TinyCo six more months to pay back the loan. The gamble worked. TinyCo was able to finish animating the Stewie character in its Family Guy game, started turning a profit and repaid the $10m, Mr Ali said. Mr Andreessen would not comment.Close connections — and lots of them — are an essential part of the business strategy at what in many ways is the hometown bank of the US’s tech industry. When start-ups get th...
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