Some entrepreneurs are mourning the loss of a place that served as a chummy club of innovation
ilicon Valley Bank’s collapse rattled the technology industry that had been the bank’s backbone, leaving shell-shocked entrepreneurs thankful for thethat saved their money while they mourned the loss of a place that served as a chummy club of innovation.
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 by Silicon Valley Bank’s downfall. Kalb started off Monday by opening an account at the largest in the U.S., JP Morgan Chase, which has about $2.4 trillion in deposits. That’s 13 times more than the deposits at Silicon Valley Bank, the 16th largest in the U.S.
“They understood startups, they understood venture capital,” said Leah Ellis, CEO and co-founder of Sublime Systems, a company in Somerville, Massachusetts, commercializing a process to make low-carbon cement. “They were woven into the fabric of the startup community that I’m part of, so banking with SVB was a no brainer.”Venture capitalists set up their accounts at Silicon Valley Bank just as the tech industry started its boom and then advised the entrepreneurs that they funded to do the same.
Many of Silicon Valley Bank’s roughly 8,500 employees now find themselves hanging in limbo, too, even though government regulators now overseeing the operations have told them they will be offered jobs at 1.5 times their salaries for 45 days, said Rob McMillan, who had worked there for 32 years. Silicon Valley Bank is fading away at a time when startups were already having a tougher go at raising money, with a downturn in technology stock values and a steady ride in interest rates caused venture capitalists to retrench. The bank often helped fill the financial gaps with one of its specialties — loans known as “venture debt” because it was woven into the funding provided by its venture capitalist customers.
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