Silicon Valley Bank’s Financial Stability Worries Investors

Some start-up investors took to Twitter to predict that the bank would have to sell or be bailed out. Others tapped out premature eulogies, praising the bank for being a good partner over the years.

Many sought to calm. Mark Suster, an investor at Upfront Ventures, wrote that he believed the only financial risk to Silicon Valley Bank’s customers was a panic that led to a run on the bank.

“Think about how many companies would be wiped out overnight if SVB went bankrupt,” he said in an interview. “This would be catastrophic, and people shouldn’t be making jokes of it.”

Villi Iltchev, an investor at Two Sigma Ventures, urged the industry to “support” the bank by not withdrawing money. Roseanne Wincek, an investor at Renegade Partners, wrote that a bank run caused merely by panic would be a “self own” for the industry.

“There are two things in life that only exist if you believe in them: God and bank runs,” said Anshu Sharma, chief executive of Skyflow, a data privacy start-up. He is also an investor in 65 other start-ups, and he urged his portfolio companies to sit tight.

Sunny Juneja, founder of Canopy Analytics, a Bay Area start-up focused on real estate technology, said that he had tried to move his start-up’s cash — a few million dollars — out of Silicon Valley Bank after his advisers and investors told him to do so on Thursday, but that the bank’s online portal was down. He spent the afternoon trying to set up an account at another bank.

“I’m doing everything I can in the shortest time period to make this happen,” Mr. Juneja said. He said he felt bad, because Silicon Valley Bank had been a good partner, but saw no upside to staying with it amid the panic and no downside to leaving.

Article source: https://www.nytimes.com/2023/03/09/business/silicon-valley-bank-investors-worry.html