SVB receives support from more than 100 venture firms and investors
(Bloomberg) — More than 100 venture capital and investment firms have signed a statement in support of Silicon Valley Bank, part of mounting industry calls to limit the fallout from the bank’s collapse and avoid a possible “extinction event” for tech companies.
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About 125 venture firms, including Sequoia Capital, had signed the statement, led by venture firm General Catalyst, as of Saturday afternoon in San Francisco, according to a person familiar with the matter. The statement, first released on Friday by a smaller group of signatories, called the events of the past two days “deeply disappointing and worrying” and said investors would continue ties with the institution if it bought it from another company would.
Also on Saturday, startup incubator Y Combinator released a petition signed by hundreds of founders and CEOs to US Treasury Secretary Janet Yellen and other regulators, asking for “relief and attention to immediate critical impacts on small businesses, startups and their employees.” asked depositors are at the bank.” The petition called for the restoration of small businesses that deposited funds with Silicon Valley Bank and called on Congress to “restore stronger regulatory oversight and capital requirements for regional banks.”
On Friday, a group of investors for high-profile companies met via Zoom for a series of meetings, according to a person familiar with the discussions. General Catalyst chief executive officer Hemant Taneja released the resulting statement on Twitter after the meetings, noting the support of Kleiner Perkins, Khosla Ventures and others. In the hours that followed, more than 100 other companies signed up, including Sequoia, said one of the people, who asked not to be named because the calls were private.
“Silicon Valley Bank is a trusted and long-standing partner to the venture capital industry and our founders,” the statement said. “For forty years it has been an important platform that has played a pivotal role in supporting the startup community and supporting the innovation economy in the United States.”
General Catalyst’s Taneja told Bloomberg that it’s important for technology leaders to communicate and agree on a “consistent approach that we hope can maintain the business continuity of our companies.” He added: “Everyone understands that we have a role to play to calm the situation.”
Taneja also said that “the bank run was an unintended consequence of many investors trying to do the right thing for their own companies” and that “panic wasn’t the way to deal with it.” He said he wishes investors had guided companies to take three to six months of working capital out of the bank, rather than advising them to withdraw all their money.
Many technology leaders have been in touch with lawmakers and regulators since the collapse of the SVB, encouraging them to focus on the businesses and jobs at risk from the crisis.
For VCs and startups, the mood in Silicon Valley was grim heading into the weekend. On Saturday morning, investors, founders and executives from across the tech industry canceled weekend plans to try to contain the fallout from the Silicon Valley bank collapse on their businesses and firms.
Many investors took to Twitter and other channels to campaign in support of SVB depositors. Y Combinator President Garry Tan called the bank’s collapse on Friday a “extinction-level event” for companies and called on regulators to step in.
On Friday night, many investors and startup founders attended a webinar with US Congressman Ro Khanna, a Democrat from Santa Clara, California, that lasted more than two and a half hours. A person present said Khanna was frustrated that the White House remained silent on the issue. A Khanna representative said he asked 70 questions and the meeting focused primarily on helping startups with payroll.
On Saturday, the congressman tweeted that he was urging the White House and Treasury Department to “do whatever is legally permissible” to support the bank.
– With support from Hannah Miller.
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