Robin Gill manages the New York office of City National Bank’s Technology and Venture Capital Banking team. The team, with offices in Palo Alto, San Francisco, Santa Monica and Boston, provides banking and lending services to companies ranging from pre-revenue, venture-backed startups, to later-stage and profitable technology companies.
For more than a decade, Robin has worked closely with a number of the top fast-growing companies in New York, Boston and Silicon Valley, providing them with a wide array of credit, banking and investment solutions. He is a Bay Area native with significant expertise in serving technology companies and is committed to adding value and leveraging his network to help entrepreneurs be successful.
This interview is part of the Q2 2016 PitchBook U.S.Venture Industry report sponsored by City National Bank.
Technology deal volume dropped significantly in the second quarter, with a larger downward trend over the past 15 months. How has that been reflected in your experience so far this year?
The funding environment has defnitely shifted. The volatility of public markets, combined with technology market sentiment, means that valuations are down and equity funding rounds are taking a lot longer to close. Also, investors are being more diligent about their investments. And we are seeing a lot of inside rounds, where current investors are focusing their efforts on existing portfolio companies.
Have there been any changes in what City National Bank’s clients are looking for, in terms of company fundraising expectations?
The “grow at all cost” mentality is gone and while companies continue to strive for growth they are more focused on maintaining efficient burn rates. Many of the conversations regarding size of an equity round have revolved around ensuring the company has sufficient cash to get to profitability without any reliance on future equity. While we continue to see companies able to raise capital, the bar is higher and the valuations are often lower.
You started your career in the Bay Area. How long have you been in New York City and how has the market changed in that time?
I moved to New York in 2010. In the past six years, the technology market in the city has grown at an extremely fast clip. I’ve had the benefit of working with some of the most exciting high growth companies that are becoming fixtures in our New York community. I’ve seen growth among native New York entrepreneurs as well as among transplants like me, who moved here specifically to be part of this exciting time.
How has activity in New York shaped up so far this year, relative to what other City National offices are seeing?
In 1Q, New York was the only major regional market that remained steady in terms of the number of companies being funded, with 225 relative to 219 in 4Q 2015. We continue to see the market remain healthy and a lot of good companies get funded. The City National brand is getting stronger in this region too, so personally we are seeing more activity than ever before.
Does your activity in New York differ substantively from what other City National offices do?
The evolution of the New York technology market is still in its early days, as compared to Boston or the San Francisco Bay Area. The market continues to expand and there are more later-stage companies than we had in the past. A few successful IPOs would help to affirm New York’s status as a top U.S. tech market.
Additionally, here in New York with City National Bank we have the benefit of our entertainment practice, which has established an extremely strong brand in this city. There are many overlaps between technology and entertainment companies these days and that gives us a significant advantage over other banks.
Our other strength is private banking. We are seeing savvy entrepreneurs use this time to make sure that their personal investments are structured in an optimum way. Even for companies still in the early stages, founders need help establishing efficient tax and trust strategies to minimize future obligations.
On a sector basis, how does your approach in transactions differ between, say, helping provide a certain amount of debt in a late- stage financing to a SaaS company as opposed to a hardware business, particularly in the current venture environment?
We are focused on working with the top companies backed by the best VCs. History has shown that successful companies can be created in any market, so we continue to maintain an open view on industry/sector trends. We do find ourselves lending to more SaaS companies these days, particularly later-stage companies that have good metrics. These companies typically have controlled burn rates with strong growth trajectory allowing us to help fuel more growth by providing debt.
What do you see happening later this year and into 2017?
One thing I anticipate, which happens sometimes in environments where funding is a little more difficult, is a greater concentration of funding in the largest tech markets. It just so happens that coincides with where we have technology bankers – San Francisco, Palo Alto, Boston, Southern California and here in New York.
In this environment, we often see investors stay closer to home or where their portfolio is currently located when they make new investments.
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