More than 110 venture capitalists have signed a statement of support for Silicon Valley Bank. SVB was shut down by regulators on Friday after its losses on bond sales sparked a bank run. Some VCs of signatory companies have criticized investors who advised founders to withdraw funds from SVB. Something is loading.
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Venture capitalists are voicing support for the deposed Silicon Valley Bank, which U.S. regulators shuttered on Friday.
“Silicon Valley Bank is a long-standing and trusted partner to the venture capital industry and our founders,” read a joint statement from more than 110 companies.
“In the event that SVB were to be acquired and appropriately capitalized, we would strongly support and encourage our portfolio companies to resume their banking relationship with them,” he continues.
US regulators shut down SVB after a significant portion of the bank’s client base – including startups and venture capitalists – sought to withdraw funds following the plunge in the company’s share price. the bank, following its announcement that it had sold $21 billion of bond investments at a loss.
SVB has served nearly half of all venture capital-backed companies in the United States, according to its website, and its failure has had a resounding impact in the startup world. Some startups that held SVB accounts are now at risk of missing payroll for their employees.
Hemant Taneja, CEO of venture capital firm General Catalyst, which led the effort to organize support for SVB, tweeted the statement on Friday evening. Taneja said in his tweet that several VCs had met to discuss the effects of SVB’s failure on their industry. Along with General Catalyst, 12 other companies signed the initial statement, including Accel, Greylock, Kleiner Perkins, Lightspeed Venture Partners and Upfront Ventures.
“It is important to collaborate around a cohesive approach that we hope can maintain the business continuity of our businesses and maintain the viability of an institution important to the industry,” Taneja said in a statement to Insider. “Everyone understands that we have a role to play in trying to calm the situation. Panic was not the right way to handle the situation. It is important to pause and reflect on all stakeholders before proceeding. making decisions – this is at the heart of our responsible innovation mindset.”
The number of signatories to the joint statement in favor of SVB has grown to more than 110 companies, including Cowboy Ventures, Eniac Ventures, Floodgate, Khosla Ventures, Lux Capital, Primary and SoftBank.
“It’s good to show strong cross-company support for the bank that has backed us for decades,” Nihal Mehta, co-founder of Eniac Ventures, who signed the statement, told Insider.
The venture capital industry’s show of support for SVB stands in stark contrast to the panic among investors and startups when SVB’s problems became apparent. Some venture capitalists, including Founders Fund, Y Combinator and Union Square Ventures, have advised their portfolio companies to withdraw most of their funds from the bank.
These reactions in turn prompted rebuke from other VCs, especially after the implosion of SVB. Upfront Ventures partner Mark Suster and Primary co-founder Brad Svrluga, whose companies signed the joint statement of support, have publicly berated their fellow investors.