I never thought it would come to this with Silicon Valley Bank. Ask me a week ago, and I would have said that SVB was one of the smartest and most stable financial institutions in the world. Little did I know that things would collapse within less than 48 hours. I watched the demise unfold and each time I was shocked. I pay attention to stocks, I keep a pulse on the wine industry, I have lunch meetings with friends in the financial realm. I know enough to understand that there’s another story here that needs to be told.
When my (ex)wife, Dianna Novy, and I were starting Siduri Wines we did it on a shoestring budget. We began with $24,000 in savings and the 1994 vintage. Because of a rave review from Robert Parker as one of the top 10 Pinot Noirs we grew to 275 cases in 1995 and then, in 1996, to almost 700 cases. To make that jump we borrowed money from my Mom and from her parents – that we paid back as cash from sales came in – but it was scary and difficult. With the 1997 vintage we were told by the winery where we made our wines that they no longer had room for us (they were already forced to store our barrels offsite, something we didn’t like).
We needed to find a new home!
We probably could have found another winery that would have allowed us to custom crush at their facility, but we felt like it was time to take some control of our own destiny.
It was right at that time that we got a phone call from a guy named Chris Roach. Chris worked for Silicon Valley Bank and he had read about our wines and was interested in talking to us. Our reaction was, “Holy Crap…a banker read about our wines and actually wants to meet!” We returned his call, and he came over and we sat around our dining room table. We had pulled together some financials, but quite frankly, we didn’t know what to do or what he might want. We just went into Quickbooks and printed out almost every report they offered. Well, it turns out that Chris also came with some paperwork. He had researched and printed out Siduri’s reviews from The Wine Advocate and the Wine Spectator. He spent the first thirty minutes asking us about our wines. He wondered what led us to make Pinot Noir in both California and Oregon. He asked us why we chose Pinot Noir as it wasn’t exactly popular. He wondered what we thought made sense for our business and let us talk about what we dreamed for our future. At the end of the meeting, he kindly took all the papers we had printed out and went on his way. I remember looking at Dianna after he left and exclaiming with surprise, “He liked us!” Chris called back the next day and said that SVB wanted to offer us a line of credit and an equipment loan to help us move into our own warehouse winery.
Over the years, Silicon Valley Bank and the many people that worked with us there, became more than a bank. They became partners in our growth as a winery and as winemakers. Harvest after harvest, Silicon Valley Bank employees would come over on a particularly busy day and help us sort grapes. They’d bring us lunch and spend hours – literally hours – standing at the sorting table with us separating out leaves and damaged clusters. The lunches they would bring might have been the healthiest meal we had all harvest (someone even brought a salad!).
At least once a year they would invite me over to the office to share a selection of wines with them. We’d sit at a table and do a real tasting – Siduri Pinot Noirs from the Willamette Valley down to the Santa Rita Hills. They’d ask questions about winemaking and about terroir and would hopefully leave with a better understanding of how and why these wines differed from one another. This tradition continued after I sold Siduri and started Clarice Wine Company and Beau Marchais Winery. We’d gather together for those tastings and get into discussions about whole cluster ferments and oak barrels. And, as if nothing had changed over the years, I’d leave those tastings and those same words from years before would echo in my head: “They like me!”
As Siduri grew, so did our financial relationship with Silicon Valley Bank. As we headed up to 30,000 cases, we borrowed more money from them. We’d borrow it up, and we’d pay it down. They came over every harvest to help sort the grapes and I’d go over and taste with them. We saw them grow and they saw us grow. It was a relationship…and even though it became more challenging to do with each business growing, we kept finding ways to partner together.
Dianna and I sold Siduri Wines to Jackson Family Wines over eight years ago, and SVB was very much a part of that process. As we worked through that event my friends at the bank gave me advice and helped me make sense of a transactions that was way over the head of this winemaker. It isn’t too much to say that the whole thing might not have happened without them.
A few years later, in 2017, I started – once again – a small winery. Built out of my home. It was all like twenty years before. That winery is called Clarice Wine Company. I remember telling my friends at SVB that I was starting over. I told them that I didn’t plan on growing it this time, rather that I wanted to make small winery that was only dedicated to one area, a few acres, and that I could do until the day I died. They asked me if they could provide me with a line of credit, just in case I needed it.
There’s one story that stands out in my mind, and it was when I tried to reciprocate the kindness the bank showed me. Years ago, I remember talking with Jed Taborski, my banker at SVB. Jed told me that they had a weeklong audit that coming week – and while that was normal and necessary it certainly wasn’t fun. That sounded like hell to me, so I called him on Friday morning to check in and he told me that the audit was going to be finished by noon. That afternoon I showed up at the office with more than a few bottles of my wine and we all raised a glass to surviving and overcoming challenges.
I know that week of hell some years ago has been nothing compared to the week of hell that that the employees at SVB have just been through. I have heard from several SVB employees – my friends there – and they have apologized to me about what happened and the difficulty it might have caused me. They are in shock just like I am. The watched events unfold just like I did and they are hurting.
Honestly, I am going to be fine. The FDIC is going to cover my money and really the process of opening another account at another institution isn’t difficult…except that it makes me feel like I am not being faithful to the bank that allowed me to become the winemaker that I am today.
The news media will report a lot about what the SVB “failure” means. I don’t know what the CEO said or what assurances he provided. I don’t know if they were good to their larger tech clients or not. But for me, Silicon Valley Bank was and will always be what a bank should be for a small business. They were my partner and they helped me grow and become all that I could be. That’s what I wanted and needed out of bank. I know that I wouldn’t be where I am without what their employees did. And for that I will always be grateful.