Welcome to Startups Weekly, a nuanced take on this week’s startup news and trends from senior reporter and equity co-host Natasha Mascarenhas. To get this in your inbox, subscribe Here.
Author’s Note: We are breaking from our usual formatting this week because of a once-in-a-generation collapse of one of the country’s largest banks. Today’s space was devoted to our coverage of this topic, but we’ll return to a broader program next week.
On Friday I wrote about how Silicon Valley Bank was shut down by the regulators who now oversee the bank’s deposits. The bank is expected to reopen on Monday, which means we’re in for – and I mean broadly – a weekend of pause, fear and more questions. This isn’t a story of the week; It is a story for the coming weeks and months. As Garry Tan, CEO of Y Combinator, put it: This could set back startups and innovation by 10 years.
After spending hours talking to founders and venture capitalists about SVB, it’s clear that explaining the state of the business or the bank’s strengths won’t necessarily stop the panic we’re seeing. It’s panic seeping into volatility at other banks; even those who benefited from the SVB’s bankruptcy just hours earlier.
The story is fast paced and constantly changing, so I won’t throw you a half-baked shot. What I do know so far, despite rational analysis of actual business fundamentals, is that the SVB collapse is a human story. Here are the stories we’ve written about the crash so far:
How founders react to the crash of the Silicon Valley bank
TechCrunch spoke to over a dozen founders about how the bank’s collapse is affecting their business. In this article, we’ll highlight some of the stories, ranging from announcing fears they won’t be able to do payroll, to putting together a timely discount code and posting it as the Hail Mary.
How will startups pay for stuff when SVB is locked down?
My colleague Alex Wilhelm asked one of the biggest questions out loud so founders don’t have to: How are startups supposed to pay when the SVB is still locked down? In his TC+ analysis, he explains that entrepreneurs should think about more than just payroll. How will they pay cloud providers or process refunds? (I told you it’s a human story.)
For the startup competition, the SVB’s nightmare is a win and a challenge
This article attempts to dismantle the notion that SVB’s fall was a net gain for its competitors. Mary Ann Azevedo and I spoke to some startups that are seeing an influx of demand: some are cautious; some are excited. The question remains: will startups screwed by a traditional bank now risk turning to a private tech startup to hold their funds? Where do you go when reminded of risks?
Venture firms advise portfolio companies to withdraw funds from the SVB
For our third point of view, let’s talk about venture capitalists. On Thursday, a number of VC firms – including but not limited to USV, Founders Fund, Hustle Fund, Inspired Capital and Valor Equity – advised startups to withdraw money from SVB. Some advised diversification.
If you want more we certainly have more including notes on the stopped trade, a summary of how this happened so quickly and collywobbles elsewhere.
You can follow me as always Twitter or Instagram to continue the conversation. You can also send tips to me at [email protected] or at Call +1 925 271 0912.
Seen on TechCrunch
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Seen on TechCrunch+
Uncertainty surrounds the multi-billion dollar USDC empire as issuer Circle held reserves at Silicon Valley Bank
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