As Silicon Valley Bank's troubles incite panic, some tech founders call for calm: 'We have a collective responsibility'
Silicon Valley Bank's stock price plummeted Tuesday after it announced it would sell fresh shares.Founders who bank with SVB say they're not yet worried and are calling for calm.startup founders who bank with the storied institution are calling for calm.
His display of support comes alongside a disastrous day for SVB, a go-to bank for the tech industry that saw its share price plummet more than 60% Thursday following an announcement that it of its bond portfolio, which led to a loss of $1.8 billion. Because of this loss, SVB said it would raise about $2 billion from investors by selling stock and issuing related securities. This caused some VCs and founders to worry about the financial strength of their banking institution.
SVB lends money to startups and keeps their cash deposits, so they can pay staff and other expenses. If startups are worried the bank can't give them all their money back from their bank accounts, then they might pull their accounts. In essence, a bank run -- Silicon Valley style.By Thursday, notable VC firms such as Founders Fund, Y Combinator, and Redbeard all said they were strongly advising their portfolio companies to pull their funds out of SVB following a frenzy on Twitter.
"SVB seems to be fine, but at the same time, there's this feeling around the founder community that if there's even a .1% chance that something could happen, it can be anxiety inducing," he said."Just look at FTX, Crypto, and Silvergate."
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