Startup founders fire up a weakened Silicon Valley bank

  • Twitter exploded on Thursday afternoon with concerns about legendary institution Silicon Valley Bank.
  • Some investors are begging their startups to get their money out of the bank.
  • SVB CEO Gregory Becker told customers on a call Thursday to stay calm.

Thursday afternoon, the tweets started coming in. Silicon Valley is losing confidence in its reference bank SVB Financial.

“OK, I hear dozens of founders telling me what to do at SVB. It’s a rock-and-roll race,” said founder Howard Lerman. writing.

“Every company I know is scrambling to get their cash balances below 250,000 and the rest of the cash off-platform or into large bank funds as soon as possible,” tweeted founder Alex Miller.

“All the VCs sending panic DMs to get money out of SVB means there’s likely to be a good ol’ run on tech’s biggest blue chip bank. liquidity. Not good for technology”, writing another founder.

SVB saw its stock price drop 60% on Thursday. It came after the bank made a $21 billion fire sale of its bond portfolio, which resulted in a loss of $1.8 billion, thanks to higher interest rates and other factors. Due to this loss, SVB said it would raise approximately $2 billion from investors by selling shares and issuing related securities. This has caused some VCs and founders to worry about the financial strength of their banking institution.

The SVB lends money to startups and keeps their cash deposits, so they can pay for staff and other expenses. If startups are worried that the bank can’t give them all the money in their bank accounts, they might withdraw their accounts. Essentially, a bank rush – in Silicon Valley.

A source close to Red Beard Ventures told Insider that they are transferring their accounts out of SVB and have asked the founders of the startup in their portfolio to do the same. This person said keeping the money at the SVB was not worth the risk.

SVB shares plunged another 18% to $87 in after-hours trading on Thursday. A year ago, the stock was trading above $500.

SVB’s media relations and investor relations departments did not return an email seeking comment on Thursday. SVB CEO Gregory Becker told customers on a call Thursday to stay calm and there was no need to worry, according to a report by The Information. He added that the bank has “ample liquidity to support our customers with one exception: if everyone thinks SVB is in trouble, that would be a challenge”.

Some founders who do business with SVB say they’re not worried – yet.

“For what it’s worth: LOOP matters with SVB – and will stay with SVB. End of story,” co-founder and CEO John Henry wrote on Twitter. The auto insurance startup founder told Insider in an interview that he took calls from his more “weighted” investors worried about the bank’s predicament, but decided to time to stay put.

“We spent some time today with our VP of finance assessing the real risk here, thinking about it, and charting out paths forward,” he said. “We looked at their actual track record, and it looks like in the event of a big run they could be vulnerable. But I think it’s important that SVB have been a very big player in the venture capital world.”

Do you have information about SVB? Are you a client or customer? Contact Samantha Stokes ( and encrypted messaging at 646-389-7866). Ben Bergman is at

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