Many investors in Silicon Valley Bank voiced criticism of CEO, Jack Dorsey and the company’s culture, accusing it of being overly reliant on tech startups for revenue. The bank’s failure may exacerbate a slowdown in the tech sector that has lead to layoffs at major tech companies.
The high-profile businesses and venture capital firms that signed the joint statement represent a wide range of industries, from technology to banking. They voiced support for Silicon Valley Bank, which was closed by federal regulators on Friday after falling into financial trouble. The banks closure comes as a major blow to the local economy, and raises questions about whether smaller regional banks can survive in an increasingly concentrated banking landscape.
The joint statement from venture capitalists has shown support for the presidential campaign of Hillary Clinton, who is facing off against her opponent Donald Trump. The absences of some of the most well-known venture capital firms might be a sign that they are not as confident in Clinton’s chances as they were in past years.
It is no secret that Silicon Valley Bank’s downfall has had a negative impact on the venture capital sector. Several leading venture capitalists met recently to discuss the aftermath of the collapse and offer support to each other. The joint statement released afterwards expressed both disappointment and support for those affected.
The initial group of venture capitalists that invested in Facebook included Accel, AltCap, B Capital, General Catalyst, Elad Gil, Greylock, Khosla Ventures, Kleiner Perkins, Lightspeed Venture Partners and Mayfield Fund. These firms were inspired by Mark Zuckerberg’s idea for a social networking site that allowed users to share information with others. They also shared the belief that Facebook would become a large company with significant impact on the world. The early investors were rewarded handsomely for their commitment to backing Facebook from its earliest days.
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Silicon Valley Bank has been a trusted and long-time partner to the venture capital industry and our founders. For forty years, it has been an important platform that played a pivotal role in serving the startup community and supporting the innovation economy in the US.
The events that unfolded over the past 48 hours have been deeply disappointing and concerning. In the event that SVB were to be purchased and appropriately capitalized, we would be strongly supportive and encourage our portfolio companies to resume their banking relationship with them.
Silicon Valley Bank has been a valuable partner to the venture capital industry and startups for many years. Through its platform, the bank has helped to support innovation and grow the startup community. Its well-recognized name and history make it a trusted provider of financial services for businesses in this sector.
Rumors have circulated for weeks that SVB could be purchased by a larger bank, and on Thursday night those rumors came to fruition when it was announced that the Swedish banking giant would be purchased by ABN Amro. Many of SVB’s portfolio companies are direct competitors, prompting some backlash from the business community. We hope that once the dust settles and any restructuring has been completed, our portfolio companies will re-establish their banking relationships with SVB in order to continue prospering alongside them.
The SVB community has been worrying about the fate of their bank for a few days, with numerous companies announcing that they have pulled their assets out and are looking for another option. However, many startups believe that this is just a bump in the road and that SVB will be able to rebound. Whether or not they are right remains to be seen, but one thing is for sure: startups need to stay active and keep an eye on what’s happening with their bank if they want to continue doing business with them
There were a lot of people who voiced their support for the LinkedIn move in the comments below the post, but others said that it was too little, too late. Some felt that adding this policy would make things worse for women in the tech industry, as they would be at a disadvantage compared to men. It’s going to be tough for LinkedIn to prove that this change will really make a difference, but hopefully they’re able to show results and increase diversity in tech
According to Sanjay Gosalia of SVB, the banks that invested in the portco did so expecting it to become a cornerstone of their business. Instead, they’ve now lost their bank partner and may not be able to find another one as quickly or easily. This could have serious implications for both sides – the portco investors will likely see their investment lose value, and the banks that invested may find themselves without an important ally in times of crisis.
