NEW YORK, March 12 — Silicon Valley Bank’s stunning collapse has led to the freezing of tens of billions of dollars stored there by startups and their private equity backers, raising fears of a wider tech sector fallout.
“They helped us recruit people, helped with securing mortgages for transplants, gave financial advice to new executives... So their disappearance is a real loss,” he said. “The real victims of the SVB fallout are the depositors: startups with 10 to 100 employees, who cannot make payroll, and will have to furlough or shutdown workers as soon as Monday,” tweeted Garry Tan, head of the well-known incubator Y Combinator.
According to several US media reports, SVB had discussed on Thursday and Friday a possible buyout with several banks, but could not find a solution quickly enough. Beyond that, Adam Arrigo, boss of virtual gig platform Wave, warned his fellow tech entrepreneurs: “Whether or not you had money in SVB, you are not unaffected. This is going to materially impact everyone.”
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