Bridge Bank may have a somewhat unfortunate name, but it says it is cultivating the Boston tech market as fertile ground for growth.

The $1.2 billion, San Jose, Calif.-based business bank, a subsidiary of Bridge Capital Holdings, established a physical presence in Cambridge last year. Still, some of the top industry watchers in the region say Bridge isn’t even on their radar.

“It’s kind of an unfortunate name,” said Cornelius Hurley, director of the Morin Center for Finance, Law & Policy at Boston University. “A bridge bank is one of the devices the FDIC uses when it closes a bank.”

The term has also been used recently to describe the device that would be used in Greece to wind down failing banks.

Undaunted, the bank recently said it planned to open its third “east coast” office – in Charlotte, N.C. – to service that area’s emerging tech sector. Earlier this month, Bridge hired Chris Perkins from Massachusetts Growth Capital as vice president and northeast market manager.

He’ll work out of the bank’s Cambridge office, and the fact that his background is in private equity is significant.

‘A Little More Volatile’

Until Bridge’s Cambridge office actually opened – it did business in the region for a couple of years beforehand – it ran all of its east coast operations from Reston, Va.

And while its executives argue it faces “stiff competition” and “a crowded market” wherever it goes, it also acknowledges that most traditional banks don’t have the appetite for the often fast-paced, risky world of tech lending.

“We’re in an era in which now every bank is a business bank, you just have to ask them,” Bridge President and CEO Dan Myers told Banker & Tradesman. “But we’re one of very few nationwide that is actively participating in the innovation sector.”

“Tech transcends the limited geography that many banks like to stay within,” said Paul Gibson, Bridge’s east coast senior vice president. “In tech, the day you open the doors is the day you’re doing business internationally.”

And if that’s not enough to make the traditional banker jittery, perhaps the prospect of serving clients from the start-up stage through IPO would be.

“More than 50 or 60 percent (of Bridge’s customers) have professional investors in their companies,” Gibson said.

Thus, it was important for Bridge to seek out someone like Perkins as vice president of its Cambridge office. His private equity experience trumps what would usually get an executive promoted – running the lending department, or similar – at a traditional bank.

And for good reason.

“It can be a little more volatile than traditional banking,” Hurley said. Banks like Bridge typically “take shares in the future (of their customers). Sometimes it can be a big score, or it can be a bust.”

Lately the scores have outweighed the busts at Bridge Bank. Myers said the bank has grown its overall assets 20 percent in the last two years, including 17 percent year-over-year growth in 2010. It expects “similar” growth this year.

Earlier this month, one of Bridge’s clients, Enphase Energy, a San Francisco firm introduced to Bridge through a relationship with Boston-based Rockport Capital, held its IPO with a market capitalization of $400 million.

Turtles & Sharks

David Barbash, co-chairman of the corporate department at Boston-based Posternak Blankstein & Lund LLP, told Banker & Tradesman start-up tech firms and traditional banks tend to make inadequate partners for each other.

On one hand, a bank looks at a start-up and sees far less collateral than it normally requires, whether it’s hard assets or accounts receivable. On the other, tech firms “are looking for a lender who’s not just going to be a depository, but who is going to be a business partner, someone who understands that it’s not a nice, smooth path to travel on. There are going to be bumps.”

Still, that’s not to say traditional banks shouldn’t try to think outside the box a little bit.

“I think traditional lenders would benefit, and the entrepreneurial community would benefit, if traditional lenders were more willing to take a risk on early stage companies, but it’s not something most banks are willing to do,” Barbash said.

Richard Gavegnano, president and CEO of East Boston Savings Bank, said the likelihood of finding that willingness among local community banks is very small. Banks are just too conservative, and start-ups are just too risky.

“Many [start-up] deals, 75 percent, fail and 25 percent are grand slams,” Gavegnano said. “Community banks should not play in that arena. You can’t be a turtle in a shark tank.”

David Barbash

Richard Gavegnano