‘I am personally sticking with SVB.’ Prominent tech figures pledge support for bank
After a rollercoaster week for Silicon Valley Bank’s customers, some prominent voices in the tech world are now publicly saying they will keep their money with the embattled lender – and they’re urging others to do the same.
“As venture capitalists and customers of SVB, we are recommending our portfolio companies to keep or return 50% of their total capital with SVB,” read a joint statement this week from a coalition of major VC firms that included Lightspeed Venture Partners, Mayfield Fund, and Upfront Ventures. “We believe SVB is now one of the safest and most secure banks in the country.”
The public show of support follows the bank’s sudden collapse on Friday, a heart-pounding weekend for startup executives unsure if they’d be able to make payroll, and then the federal government’s announcement Sunday that it would step in to guarantee that all depositors will be made whole. It also comes after the regional bank’s saga sent shockwaves across global financial markets.
Villi Iltchev, a partner at Two Sigma Ventures tweeted Tuesday that he’d spoken with an executive who planned to move his money back to the bank because “it is now the safest bank in the U.S.” Iltchev added: “I am personally sticking with SVB as my primary bank where I receive my direct deposit.”
The public support comes after some venture capitalists were previously accused of helping fuel the original online panic that sparked a run on the bank and brought about its collapse. The push to continue doing business with Silicon Valley also highlights the unique relationship between the tech lender and the startup community, and their mutual dependence on each other.
The bank has worked with nearly half of all US venture-backed tech and health care companies. Its collapse only risked adding to a challenging season for the tech industry, as venture funding falls, interest rates rise, and broader macroeconomic uncertainty has meant less funding for the ambitious, money-losing projects that have come out of Silicon Valley over the past decade.
But not everyone shares the desire to stay loyal to the bank after its implosion. In response to the joint statement from the group of venture capitalist firms urging people to continue banking with Silicon Valley Bank, one startup CEO responded on Twitter, “Honest question: Why would I do that after they made me go through one of the worse 48 hours of my life?”
A handful of America’s biggest banks, including Bank of America, Wells Fargo and Citigroup, have all experienced a significant increase in deposits since Silicon Valley Bank ran into trouble last week, people familiar with the matter have told CNN. And multiple company leaders have already told CNN that they have scrambled to set up bank accounts elsewhere after the past week’s events, with one saying, “I don’t want to do this again.”
Still, the statements of support from venture capitalists echo some of the bank’s own messaging.
“The number one thing you can do to support the future of this institution is to help us rebuild our deposit base, both by leaving deposits with Silicon Valley Bridge Bank and transferring back deposits that left over the last several days,” Silicon Valley Bank’s newly-appointed CEO Tim Mayopoulos wrote in a memo to clients Tuesday.
Mayopoulos also stressed that the Biden administration’s announcement that all deposits are fully protected by the Federal Deposit Insurance Corporation, “effectively means that deposits held with SVB are among the safest of any bank or institution in the country.”