Writer’s note: We’re breaking from our usual formatting this week because there was a once-in-a-generation collapse of one of the biggest banks in the country. Today’s space has been dedicated to our coverage on the matter, but we will be back to broader programming next week.
On Friday, I wrote about how Silicon Valley Bank has been closed by regulators, which are now in charge of the bank’s deposits. The bank is set to reopen Monday, which means we — and I mean that in the most collective sense — are in for a weekend of pause, fear and further questions. This is not a story of the week; it’s a story for the weeks and months ahead. As Y Combinator CEO Garry Tan put it, this could set startups and innovation back by 10 years.
After spending hours speaking to founders and venture capitalists about SVB, it’s clear that explaining the bank’s state of business or strengths will not necessarily stop the panic we’re seeing. It’s panic that is seeping into volatility at other banks; even the ones positioned to benefit from SVB’s bust just hours earlier.
The story is fast and ever changing, so I’m not going to toss you a half-baked take. What I know so far is despite rational analysis of actual business fundamental, SVB’s collapse is a human story. Here are the stories we’ve written about the crash so far:
TechCrunch spoke to over a dozen founders about how the bank’s crash is impacting their business. In this piece, we highlight some of the stories, ranging from announcing fears that they can’t make payroll to putting together a timely discount code and blasting it out as a Hail Mary.
My colleague Alex Wilhelm asked one of the biggest questions out loud so founders don’t have to: How are startups going to pay for stuff if SVB is still locked up? In his TC+ analysis, he explains that entrepreneurs should be thinking about more than making payroll. How are they going to pay cloud vendors or process refunds? (I told you it’s a human story.)
This piece seeks to dismantle the idea that SVB’s fall is a net positive for its competitors. Mary Ann Azevedo and I spoke to a few startups that are experiencing an influx in demand: Some are cautious; some are excited. The question remains: Will startups that have been screwed by a traditional bank now run the risk of turning to a private tech startup to hold their funds? Where do you go when you’re reminded of risk?
For our third vantage point, let’s talk about venture capitalists. On Thursday, a number of VC firms — including but not limited to USV, Founders Fund, Hustle Fund, Inspired Capital and Valor Equity — advised startups to pull money out of SVB. Some advised diversification.
Seen on TechCrunch
Seen on TechCrunch+
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