As the 40-year-old banking institution, Silicon Valley Bank (SVB), winds down operations, numerous venture capitalists (VCs) and investors joined hands and decided to cushion the impact in case the bank “were to be purchased and appropriately capitalized.”
Approximately 125 VCs and investors signed a statement supporting SVB to limit the fallout of the bank’s collapse and the subsequent impact on tech companies. The venture firms included Sequoia Capital and General Catalyst.
Several VC leaders met today to discuss the aftermath of SVB’s downfall. This is a joint statement from all of us. @Accel @altcap @BCapitalGroup @generalcatalyst @eladgil @GreylockVC @khoslaventures @kleinerperkins @lightspeedvp @MayfieldFund @Redpoint @RibbitCapital @upfrontvc pic.twitter.com/7OtHq0zwT1
— Hemant Taneja (@htaneja) March 11, 2023
A group of investors for high-profile firms met over Zoom in a series of meetings, disclosed a Bloomberg report. Hemant Taneja, the CEO of General Catalyst, initially revealed the joint statement from several VCs, showing support for the bank. It read:
“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 relationships with them.”
In parallel, startup incubator Y Combinator posted a petition demanding “depositors to be made whole, and for regulation to prevent this catastrophe.”
Now about 2800 founders who have over 180,000 employees have signed.
About 44% of them are based outside of California.
— Garry Tan 陈嘉兴 (@garrytan) March 12, 2023
According to Y Combinator CEO Gary Tan, the petition — directed toward regulators including United States Treasury Secretary Janet Yellen and Federal Deposit Insurance Corporation chairman Martin Gruenberg — scored signatures from roughly 2,800 founders and 180,000 employees at the time of writing.
“Everyone understands that we have a role to play in trying to calm the situation,” Taneja told Bloomberg. However, disputing this drive to save SVB, prominent Indian entrepreneur Ashneer Grover reminded Taneja that banks don’t get saved by passing bureaucratic, United Nations-type joint resolutions — taking a dig at the mindset of pouring money on a problem in the hopes of fixing it. “It requires intent and balls of steel!” he concluded.
Hours after USD Coin (USDC) lost its peg to the U.S. dollar, unconfirmed reports about a resolution momentarily brought back the token’s prices to nearly $1.
Although the reports are currently unverified, multiple sources confirm that many different paths to resolution are in the works and that depositors will get back “at least 50% of their deposits” in the coming week.