Bust bank rattles startup eco system

US Silicon Valley Bank's collapse will hurt young venture-capital based tech cos

With the collapse of the Silicon Valley Bank in the US, which served mostly technology workers and venture capital-backed companies, including some of the industry’s best known brands, there is a scramble among young companies to get their money out of the bank, which was central to the start-up industry in US and abroad.

As the news of the demise spread, global markets fell sharply with bank shares being hit the hardest.

According to a report in New York Times, the fallout was felt across the start-up ecosystem “as entrepreneurs raced to get loans to make payroll because their money was frozen at the bank. Investors doled out and asked for advice in memos and on emergency conference calls. Lines formed outside the bank’s branches. Many in the tech industry were glued to Twitter, where the collapse of a linchpin financial partner played out in real time”.