Notices are posted at the entrance to a Silicon Valley Bank Private branch in San Francisco, Monday, March 13, 2023.
But the gratitude for the deposit guarantees that will allow thousands of tech startups to continue to pay their workers and other bills was mixed with moments of reflection among entrepreneurs and venture capital partners rattled byThe crisis “has forced every company to reassess their banking arrangements and the companies that they work with,” said Rajeeb Dey, CEO of London-based startup Learnerbly, a platform for workplace learning.
Bank of America is getting some of the money that Electric Era had deposited at Silicon Valley Bank, and the Seattle startup's CEO, Quincy Lee, expects having no difficulty finding other candidates to keep the rest of his company's money as part of its diversification plan.
Bob Ackerman, founder and managing director of venture funder AllegisCyber Capital, likened last week's flood of withdrawal demands from Silicon Valley Bank to a self-inflicted wound by “a circular firing squad” intent on “shooting your best friend." Even though all of Silicon Valley Bank's depositors are being made whole, its demise is expected to leave a void in the technology sector that may be difficult to fill. In an essayon his LinkedIn page, prominent venture capitalist Michael Moritz compared Silicon Valley Bank to a “cherished local market where people behind the counters know the names of their customers, have a ready smile but still charge the going price when they sell a cut of meat.
With Silicon Valley Bank gone and venture capitalists pulling in their reins, Lin expects there will be fewer startups getting money to pursue ideas in the same fields of technology. If that happens, he foresees a winnowing of competition that will eventually make the biggest tech companies even stronger than they already are.