The Final Breaths of Silicon Valley Bank
The bank that pampered startup founders was quickly unraveled by a bad bet on interest rates, a failed fundraising and an exodus of customers.
Silicon Valley Bank wasn't just a bank—it was a central artery in the venture capital circulatory system.
VC firms recruiting new partners would tell them SVB could set them up with a mortgage in a day. The bank wined and dined the industry in Napa. It sponsored numerous events across the Valley.
While other banks that routinely handled huge clients might barely give a startup founder the time of day, SVB showered them with attention.
“We have banked with SVB from the beginning of our founding in 2019,” said Tiffany Kelly, the founder of Curastory, a video advertising startup that has raised $6.3 million in total funding, in an interview on Thursday. “They have gone above and beyond to assist in those unique circumstances when we needed the support like no other bank would or could. They have a lifelong client in us.”
But Silicon Valley Bank failed Friday, when it crashed hard into the arms of the FDIC after a bad bet on interest rates, a run on the bank, a failed attempt to raise money and a short-lived endeavor to sell itself. SVB was insolvent, the California government said, with a negative cash balance of about $958 million. It was the second-largest bank failure in U.S. history behind that of Washington Mutual.