The sudden collapse of Silicon Valley Bank on Friday sent shockwaves through the startup community, which has come to view the lender as a source of reliable capital and deposit partner, particularly for some of tech’s biggest moonshots.
VC investors are discussing solutions for startups that have funds stuck with SVB and struggling to process payroll to employees and vendors, including offering a line of credit to portfolio companies.
"Access to the cash is the biggest problem for the majority of the companies here. If you’re a startup, cash is king. The cash and the workflow, to be able to have the runway is critical." The bank has been central to the formation of many early stage companies due to its reputation for taking bets on startups that may have had little chance of survival otherwise and for which larger banks may find far too risky. It has had financial relationships with a who’s who of Silicon Valley firms over the years, including Snapchat's parent Snap IncA locked door to a Silicon Valley Bank location on Sand Hill Road is seen in Menlo Park, California, U.S. March 10, 2023.
Tyrner said she wondered if her co-founder had gone mad. "She's just pinging me over and over and texting my kid," Tyrner said in an interview. "'SVB is going under,'" her partner texted, said Tyrner. "'We have to get our funds out, please approve this wire.'"
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