Unease is spreading across the financial world as concerns about the stability of
The turmoil followed a surprise announcement from Santa Clara, California-based SVB that it was issuing $2.25 billion of shares to bolster its capital position after a significant loss on its investment portfolio. The stock plunged 63% in premarket trading in New York on Friday before trading in the bank’s parent was halted with news pending. They declined 60% the day before. Its bonds posted record declines, igniting a broad selloff in bank shares around the world.
In the US, Thursday was the worst day for the KBW Bank Index since June 2020, as its members shed more than $90 billion of value. The biggest banks in Europe lost more than
Becker held the roughly 10-minute call with investors at about 11:30 a.m. San Francisco time. He asked the bank’s clients, including venture capital investors, to support the bank the way it has supported its customers over the past 40 years, the person said.
Representatives for Founders Fund, Coatue and Union Square Ventures declined to comment. Representatives for Silicon Valley Bank, Canaan and Founder Collective didn’t immediately respond to requests for comment.
In its note to companies, Founder Collective said: “Over the long term, we don’t believe that deposits are likely at risk, but the shorter term is hard to predict.”
“Anytime you hear problems of solvency in any bank, and it can be deemed credible, you should take it seriously and prioritize the interests of your startup by not exposing yourself ,” Tan wrote in a post viewed by Bloomberg News.
A representative for Y Combinator declined to comment.
Another firm, Activant Capital, sent emails and texts to its portfolio company CEOs encouraging them to transfer their SVB balances to other lenders, and is helping some move capital to First Republic Bank, CEO
In an email Thursday morning signed by
Becker’s call was reported earlier by the Information.
“This is a classic bank run, and when the bank run starts you don’t want to be the last guy there,” Ava Labs President John Wu said in an interview with Bloomberg Television. Wu said that his company had “already diversified” away from its reliance on Silicon Valley Bank.
A startup CEO who asked not to be identified said that his firm tried unsuccessfully throughout Thursday to withdraw millions of dollars from Silicon Valley Bank. Several other clients of the bank told Bloomberg that they were able to take out cash on Thursday without significant issues, though at one point during the day one of them couldn’t access the SVB website.
Some VCs said they were standing by the bank. “It is truly unfortunate that several GPs and companies are making a tough situation for SVB worse by pressing the panic button,” said G Squared founder
One prominent investor,
An email thread of more than 1,000 founders from Andreessen Horowitz was abuzz with the news Thursday, with many encouraging each other to pull cash from the bank. At one point on the thread, General Partner
“What do we know about banks you would switch to? Are they in better or worse shape?” he said he advised. “It is a pain to switch, but it is more of a pain if the bank fails.”
(Updates with trading halted in second paragraph.)
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