has left the US tech scene in shock, wondering how one of its most valued institutions could vanish so suddenly, shunned by the companies that used it most.
"If you did the right thing, and kept your money at SVB, you're being f'ed," she said, using an abbreviated expletive. "Before SVB sprang to life, it was difficult, if not impossible, for a start-up to secure a relationship with a large, established bank," wrote Michael Moritz, a partner at Sequoia Capital, a VC powerhouse, in the Financial Times.
Instead, SVB's implosion followed a far more classic pattern, reminiscent of scenes from the Great Depression nearly a hundred years ago, when distressed depositors lined up at failed US banks desperately hoping to get their hands on money that was already lost.In this case, the depositors were tech entrepreneurs, who were responding to frantic warnings from colleagues or backers to clear out their accounts quickly.
"I think when the forensics on this are done, you're going to find out that maybe as few as 20 people ... decided on Wednesday or Thursday morning to go into a war room mentality," said New York University business professor Scott Galloway, who also works with startups. But the collapse of FTX was similarly fast and precipitated the implosion of other cryptocurrency firms and runs at two other banks, Signature and Silvergate, that had recentered their own businesses on alternative currencies.
The sudden shot up in US interest rates caused the Asian Financial Crisis of 1997 and the Global Financial Crisis of 2008. Why would it be any difference this time ? Janet, Jerome and Biden must account.
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