Welcome to Startups Weekly, a closer look at this week’s startup news and trends from senior reporter and equity co-host Natasha Mascarenhas. To get it delivered to your inbox, subscribe here.
Author’s Note: We’re breaking away from our usual formatting this week because one of the nation’s largest banks went bust in a generation. Today’s spot is devoted to our coverage on the matter, but we’ll return to broader programming next week.
On Friday, I wrote about how Silicon Valley Bank has been shut down by regulators, who are now in charge of the bank’s deposits. Banks are set to reopen on Monday, which means we – and I mean that in the most collective sense – are in for a weekend of pause, fear and questions ahead. This is not the story of the week; This is the story of the coming weeks and months. As Gary Tan, CEO of Y Combinator, said, It can set back startups and innovation by 10 years.
After hours of talking to founders and venture capitalists about SVB, it’s clear that explaining the position or strength of the bank’s business won’t necessarily stop the panic we’re seeing. It is panic that is turning into volatility at other banks; Even those who were in a position to benefit from SVB’s bust only a few hours ago.
The story is fast paced and always changing, so I’m not going to take you in half-heartedly. What I know so far is that despite rational analysis of actual business fundamentals, the collapse of SVB is a human story. Here are the stories we’ve written so far about the crash:
How founders are reacting to the collapse of Silicon Valley Bank
TechCrunch spoke to more than a dozen founders about how the bank crash is affecting their businesses. In this piece, we uncover some of the stories, from announcing out of fear they can’t make payroll to putting together a discount code in time and exploding as a Hail Mary.
With SVB locked, how will startups pay for goods?
My colleague Alex Wilhelm asked aloud one of the biggest questions founders don’t have to: How are startups going to pay for stuff if SVB is still closed? In his TC+ analysis, he explains that entrepreneurs should think about more than just making payroll. How will they pay cloud vendors or process refunds? (I told you this is a human story.)
For startup competition, SVB’s nightmare is both a triumph and a challenge
This article seeks to debunk the idea that SVB’s decline is a net positive for its competitors. Mary Ann Azevedo and I spoke to a few startups that are experiencing a surge in demand: Some are cautious; Some are excited. The question remains: Will startups now saddled by a traditional bank risk turning to a private tech startup to hold their funds? Where do you go when you are reminded of risk?
Venture firms are advising portfolio companies to withdraw money from SVB
For our third vantage point, let’s talk about venture capitalists. On Thursday, several VC firms — including but not limited to USV, Founders Fund, Hustle Fund, Inspired Capital and Valor Equity — advised startups to pull money out of SVB. Some advised diversification.
If you want more, we certainly have more, including notes on stalled trading, how it happened so fast and a recap on the “colliwobbles” elsewhere.
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etc etc.
spotted on techcrunch
The long goodbye at Salesforce continues with more layoffs reported today
How the FBI Proved That the Remote Admin Tool Was Actually Malware
Meta is working on a decentralized social app
Elon Musk apologizes after publicly mocking disabled Twitter employee
spotted on techcrunch+
Uncertainty Remains Around Billions Of USDC Empire As Issuer Circle Holds Reserves At Silicon Valley Bank
Everything you know about computer vision may soon be wrong
It turns out burn reduction at startups is more aspiration than reality
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