"They were the gold standard, it almost seemed weird if you were in tech and didn't have a Silicon Valley Bank account, Stefan Kalb, CEO of Seattle startup Shelf Engine, said during an interview as he started the process of transferring millions of dollars to other banks.
The Biden administration's move guaranteeing all Silicon Valley Bank's deposits above the insured limit of $250,000 per account resulted in a "palpable sigh of relief" in Israel, where its booming tech sector is "connected with an umbilical cord to Silicon Valley," said Jon Medved, founder of the Israeli venture capital crowdfunding platform OurCrowd.
But the gratitude for the deposit guarantees that will allow thousands of tech startups to continue to pay their workers and other bills was mixed with moments of reflection among entrepreneurs and venture capital partners rattled by Silicon Valley Bank's downfall.
The crisis "has forced every company to reassess their banking arrangements and the companies that they work with," said Rajeeb Dey, CEO of London-based startup Learnerbly, a platform for workplace learning.
Entrepreneurs who had deposited all their startups' money in Silicon Valley Bank are now realizing it makes more sense to spread their funds across several institutions, with the biggest banks considered safer harbors.
Kalb started off Monday by opening an account at the largest bank in the U.S., JP Morgan Chase, which has about $2.4 trillion in deposits. That's 13 times more than the deposits at Silicon Valley Bank, the 16th largest in the U.S.
Bank of America is getting some of the money that Electric Era had deposited at Silicon Valley Bank, and the Seattle startup's CEO, Quincy Lee, expects having no difficulty finding other candidates to keep the rest of his company's money as part of its diversification plan.
"Any bank is happy to take a startup's money, Lee said.
This story is from the March 16, 2023 edition of AppleMagazine.
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This story is from the March 16, 2023 edition of AppleMagazine.
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