Welcome to Startups Weekly, an in-depth look at this week’s startup news and trends by the Chief Stock Correspondent and co-host. Natasha Mascarenhas. To get this in your inbox, subscribe here.
Writer’s note: We deviated from our usual format this week because there was a one-in-a-generation crash for one of the largest banks in the country. Today’s space is set aside for our coverage of this, but we’ll be back to broader programming next week.
On Friday, I wrote about the how-to Silicon Valley Bank has been shut down by regulators, which is now responsible for bank deposits. The bank is set to reopen on Monday, which means we’re in – and I do mean that in a collective sense – in for a weekend of downtime, fear, and more questions. This is not the story of the week. It is the story of the coming weeks and months. As Y Combinator CEO Gary Tan said, This could set startups and innovation back 10 years.
After spending hours talking to founders and venture capitalists about SVB, it’s clear that explaining the bank’s business case or strengths won’t necessarily stop. The panic we see. Panic seeps into fluctuations in other banks. Even those who were positioned to take advantage of the SVB’s bankruptcy just hours earlier.
The story is fast and ever-changing, so I won’t throw you a half-baked take. What I know so far is that despite a rational analysis of the actual business fundamentals, the SVB meltdown is a human story. Here are the stories We wrote about the accident Until now:
How the Founders React to the Silicon Valley Bank Collapse
TechCrunch spoke to more than a dozen founders about how the bank’s collapse affected their businesses. In this article, we highlight some of the stories, from advertising concerns that they couldn’t make up payroll to putting together a discount code at the right time and blowing it up as a Hail Mary.
With SVB closed, how will startups pay for things?
My colleague Alex Wilhelm posed one of the biggest questions out loud so that founders don’t have to: How will startups pay for things if SVB is still closed? In his TC+ analysis, he makes the point that entrepreneurs should think about more than setting up payroll. How will they pay cloud vendors or process refunds? (I told you it was a human story).
For startup competition, SVB’s nightmare is win-win and daring
This piece seeks to dismantle the notion that SVB’s downfall is a net positive for its competitors. Mary Ann Azevedo and I speak to a few startups that are seeing an influx of demand: some are being wary; Some are excited. The question remains: Are startups that have been spoiled by a traditional bank now in danger of turning into a private tech startup to keep their money? Where do you go when reminded of the dangers?
Investment project companies advise portfolio companies to move funds from the SVB
For our third point of view, let’s talk about venture capitalists. On Thursday, a number of VC firms — including but not limited to USV, Founders Fund, Hustle Fund, Inspired Capital, and Valor Equity — advised startups to withdraw funds from SVB. Some advised diversification.
If you want more, we definitely have more, including notes on Trading stoppedAbstract about How did this happen so quickly And “collywobbles” elsewhere.
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