Many Silicon Valley Bank customers are struggling to transfer funds out of their bank accounts due to the current banking crisis. The issue is compounded by the fact that bank account information is frequently shared between different banks, making it difficult for customers to move money between accounts.
The attempted withdrawals and the share price fall might be seen as a sign of panic from investors, given that the bank has stated it is struggling financially owing to high interest rates and losing money on investment. However, some analysts are interpreting the situation somewhat differently, suggesting that this could be an attempt by insiders to take advantage of the turmoil in order to sell their shares at a discount before they are revealed as part of any forthcoming “bad news”: something which may not happen for some time.
Meanwhile, some independent VCs argue that founders need to at least diversify where they hold their capital in light of the volatility Silvergate is facing. However, others warn that the panic may be coming too early – perhaps due to earlier news this week that another bank, Silvergate, is shutting down. In any case, SVB’s deposit volatility from a subset of its users is clearly affecting some investors.
Amidst the chaos and uncertainty regarding what is happening with SVB bank, it appears that some parts of their website and phone support are down, as well as one of their client support phones. This has resulted in a number of entrepreneurs feeling panicked and frustrated, as they are unable to move capital or access account controls. While it is still unclear what exactly is happening at this time, we can only hope for the best until more information becomes available.
A founder of a successful Silicon Valley startup was frustrated when trying to contact customer service for their SVB account. They had been dealing with issues for months and could not seem to get through. Finally, they called a local representative who told them that the website was experiencing high volumes and that the transaction should go through tomorrow morning. This founder is relieved that they will be able to fix their issue soon, and grateful for the support of First Republic Bank which facilitated the transaction.
As the founder of a small business, they knew that if their bank went under, their company would follow suit. Still, they were hesitant to transfer funds out of fear that it could trigger an attempt by other banks to devalue their assets – an event known as a “bank run”. Ultimately, they transferred funds and hoped for the best.
While some SVB employees were worried about the bank’s stability in the wake of a downturn in the credit market, other founders say that they have not seen any negative effects and are instead taking a wait-and-see approach.
Bank of SVB is not in trouble, but it may have some difficulties supporting its clients if everyone believes that the bank is in trouble. VCs are advised to stay calm and support Bank of SVB’s clients as usual.
As the venture world evolves, so too do the ways in which information is shared and traduced. With advances in technology and an ever-growing interest by firms in outside capital, there is an increased demand for reliable sources of information.
One such outlet is Natasha Mascarenhas’ column on Inc.’s website, which provides a wealth of insider information on startups and venture capitalists throughout the country. Recently, Mascarenhas published a report that detailed some key happenings within Silicon Valley’s top venture firms.
