What a crazy weekend. The global tech ecosystem spent 48 hours in a spiral of panic because of Silicon Valley Bank’s downfall.
Founders, already fatigued by the many macroeconomic headwinds hitting them in 2023, were told that their cash reserves could disappear in front of their eyes over a rainy March weekend.
A series of unfortunate bond choices meant Californian startup lender Silicon Valley Bank was suffering a deficit in its books. That, and some fumbled public relations, sent the tech world into hysteria.
The venture capital community heard the news first. Despite being well-versed in the mechanics of a media storm, many tier-one VCs decided to instruct their portfolio companies to withdraw funds from the bank.
Perhaps these investor leaders were naïve to their influence, but this move started a domino effect that eventually turned into a bank run. Regardless of what critics say, it is this rapid withdrawal of funds that put SVB in the ground so quickly, not its bond position....