The collapse of the Silicon Valley Bank puts a strain on young companies
Josh Butler, the chief executive of CompScience, a start-up workplace safety analytics company, said he was unable to get his company’s money out of the bank on Thursday or before the bank collapsed on Friday. The last day, he said, was nerve-wracking.
“Everyone from my investors to employees to my own mother is reaching out to me to ask what’s going on,” Mr. Butler said. “The big question is how quickly can we get access to the rest of the funds, how much, if any? This is absolutely scary.”
CompScience paused spending on marketing, sales and hiring until more pressing issues like payroll were resolved. Mr Butler said he was prepared for a major crisis given the doom and darkness swirling around the industry.
But “did I expect it to be Silicon Valley Bank?” he said. “Never.”
Camp, a start-up that sells gifts and experiences for children, added a banner to its website on Friday that read, “OUR BANK JUST CLOSED – SO EVERYTHING IS ON SALE!”
The site offered a 40 percent discount with the promo code “Bankrun” along with a meme that included the words “I never liked the Bay Area” and “How did this happen.” A Camp official said the sale was related to the collapse of Silicon Valley Bank and declined to comment further.
Sheel Mohnot, an investor at Better Tomorrow Ventures, said his venture firm on Thursday advised its startups to prudently wire money into government bonds and open other bank accounts.
“Once a bank run starts, it’s hard to stop,” he said.
Some of the start-ups Mr Mohnot’s firm has invested in chose not to move their money, while others could not act in time before the bank collapsed, he said. Now their biggest concern is payroll, followed by how to pay their bills, he said.
https://www.nytimes.com/2023/03/10/technology/silicon-valley-bank-fallout.html The collapse of the Silicon Valley Bank puts a strain on young companies