The dust has yet to settle on the biggest bank in US history, a collapse that decimated the tech startup-focused Silicon Valley bank in just 48 hours. But there is already a debate raging in the venture capital community and investors are taking sides.
On Friday, a group of more than two dozen venture capital firms issued a joint statement backing the Silicon Valley bank. The statement was specifically after — and not before — Federal Deposit Insurance Corporation regulators closed the bank and took control.
And the posthumous show of support continues to grow. As of Saturday afternoon, more than 100 venture firms had added their names to the joint statement. There are also some notable absences from the list, including a16z, Founders Fund, Sequoia Capital, and Y Combinator.
General Catalyst and Managing Director Hemant Taneja wrote in a post on LinkedIn on Friday that several venture capital leaders met to discuss the aftermath of the Silicon Valley Bank collapse. A dozen of some of the best-known names in venture capital released a joint statement that expressed support as well as dismay.
The initial group included Accel, AltCap, B Capital, General Catalyst, Elad Gil, Greylock, Khosla Ventures, Kleiner Perkins, Lightspeed Venture Partners, Mayfield Fund, Redpoint Ventures, Ribbit Capital and Upfront Ventures.
The statement reads:
Silicon Valley Bank has been a trusted and long-standing partner to the venture capital industry and our founders. For forty years, it has been an important platform that has played a vital role in serving the startup community and supporting the innovation economy in America.
The events unfolding in the last 48 hours are extremely disappointing and worrying. In the event that SVB is bought out and properly capitalised, we will strongly support and encourage our portfolio companies to resume their banking relationships with them.
In particular, the group is urging its portfolio companies not to get too comfortable with whichever financial institution they have transferred their assets to and to be prepared to move their capital back to SVB if it is bought out. and is adequately funded. Over the past two days, several companies have acknowledged that they have pulled their assets out of SVB and into other banks – traditional and digital – such as JPMorgan Chase and Mercury. And, several startups have shared with TechCrunch that they have seen an increase in demand and migration.
While many expressed support for the move, others said in the comments below the LinkedIn post that the effort was too little, too late.
Sanjay Gosaliya, head of product at SVB, commented on a LinkedIn post, “I wish these same VCs would have put the ban together and put their deposits in SVB, their PortCo deposits and keep calm.” “He has now not only lost a valuable bank partner who served him unconditionally in difficult times, but will be less well served in new bank relationships. He fundamentally betrayed his partner and has undoubtedly shot himself in the foot.” Took.