• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

Short and Funny Sayings for a Happy Summer with Friends

May 9, 2025

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Friday, May 9
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025

    Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

    May 7, 2025

    ‘Wait Them Out’: John Kennedy Tells Larry Kudlow One Lie He Suspects China’s Telling US

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Finance»VCs urge startups to withdraw funds from Silicon Valley Bank
Finance

VCs urge startups to withdraw funds from Silicon Valley Bank

March 11, 2023No Comments4 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
VCs urge startups to withdraw funds from Silicon Valley Bank
Share
Facebook Twitter LinkedIn Pinterest Email

In this photo illustration of the TradingView stock market chart of SVB Financial Group seen displayed on a smartphone with the SVB Financial Group logo in the background. 

Igor Golovniov | Lightrocket | Getty Images

Venture capital firms on both sides of the Atlantic have been urging their portfolio companies to move money out of embattled lender Silicon Valley Bank, deepening fears of a run on the tech-focused bank.

Silicon Valley Bank shares plunged 60% Thursday after disclosing that it needed to shore up its capital with a $2.25 billion equity raise from investors including General Atlantic. The company’s stock was down another 60% in premarket trading Friday.

SVB is a major bank in the technology startup space, having developed relationships with the VC community over its four decade existence. Providing traditional banking services while also funding tech projects, it is considered a backbone of the venture capital industry in the U.S.

The venture capital community basically created a run on SVB, says Unlimited CEO Bob Elliott

Numerous VC funds, including major players like Founders Fund, Union Square Ventures and Coatue Management, have advised companies in their portfolios to move their funds out of SVB to avoid the risk of being caught up in the potential failure of the bank. Having funds frozen at SVB could be deadly for a money-burning startup, according to founders with accounts at the bank who spoke to CNBC on the condition of anonymity.

Pear VC, an early-stage VC firm based in San Francisco, urged its portfolio network to withdraw funds from SVB on Thursday. Pear’s portfolio includes the open-source database Edge DB and payroll management platform Gusto. A spokesperson for Gusto said the company “does not use Silicon Valley Bank to fund customer payroll services and operations” and that therefore it clients are unaffected.

See also  Italian Insurer Buttresses Russian Gas Investment in Uzbekistan

“In light of the situation with Silicon Valley Bank that we are sure all of you are watching unfold, we wanted to reach out and recommend that you move any cash deposits you may have with SVB to another banking platform,” said Anna Nitschke, Pear’s chief financial officer, in an email to founders obtained by CNBC.

“In this market, a larger money center bank (think Citi Bank, JP Morgan Chase, Bank of America) is best suited, but in the interest of time, you might be able to open interim accounts faster with smaller banking platforms such as PacWest, Mercury, or First Republic Bank.”

Pear was not immediately available to comment when contacted by CNBC.

SVB didn’t immediately respond when asked by CNBC whether it had enough assets on hand to process withdrawals from startups.

Silicon Valley Bank meltdown: Here's how it happened in real-time

The wind-down of crypto-centric Silvergate Bank and pressure on Silicon Valley Bank this week reminded some founders of the 2008 financial crisis, in which banks toppled during the mortgage bust.

SVB is grappling with a difficult technology funding environment as the IPO market remains chilly and VCs remain cautious against the backdrop of a weaker macroeconomic situation and rising interest rates.

In the tech heydays of 2020 and 2021, ultra low interest rates meant that it was much easier for startups to raise capital.

As rates have risen, company valuations have seen something of a reset, and venture-backed firms are feeling the pinch as VC funding market experiences a slowdown. Even with funding rounds slowing, startups have had to keep burning through cash raised from earlier rounds to cover their overheads.

See also  ISRG Stock Crumbles As Weight-Loss Drugs Take A Bite Out Of Bariatric Surgery

That’s bad news for SVB, as it means companies have had to drain deposits from the bank at a time when it is losing money on excess cash invested in U.S. debt securities, which have now fallen in price after the Fed’s rate hikes.

Hoxton Ventures, a London-based VC firm, is advising founders to withdraw two months’ worth of “burn,” or venture capital they would use to finance overhead, from SVB.

In a note to founders Thursday, Hussein Kanji, Hoxton’s founder partner, said: “We have seen some funds passing on a view that they remain confident in SVB. We are seeing other funds encouraging companies to withdraw their funds from SVB. It remains to be seen how this will all play out.

“If the self-fulfilling prophecy occurs, the risks to you are asymmetric.”

Speaking separately to CNBC, Kanji said: “The big danger for startups is that their accounts will be frozen while the mess is being sorted.”

Kanji believes SVB may either be bailed out by the U.S. Federal Reserve or acquired by another firm.

The company has hired advisors to explore a potential sale after attempts by the bank to raise capital failed, sources told CNBC’s David Faber Friday.

Bank funds Silicon startups urge Valley VCs withdraw
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Ending China’s De Minimis Exception Brings 3 Benefits for Americans

April 17, 2025

The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

April 17, 2025

Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

April 17, 2025

How China’s Companies Are Responding to the US Trade War

April 16, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

Tesla Shareholders Vote To Reapprove Elon Musk’s Massive Pay — But Courts May Thwart Him From Raking In The Dough

June 13, 2024

Russia Issues Local Militia With Hunting Rifles to Defend Against Ukraine

August 6, 2023

Elon Musk Talks Twitter, Censorship on ‘Real Time With Bill Maher’

April 29, 2023

Biden DOJ Overlooking ‘Biggest Campaign Finance Scandal in a Generation’ By Not Charging Sam Bankman-Fried

January 3, 2024
Don't Miss

Short and Funny Sayings for a Happy Summer with Friends

Lifestyle May 9, 2025

I love the beach. Just looking at the calming sea to relax. Having fun in…

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,110)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,627)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

J.K. Rowling Rips Johns Hopkins University for Labelling Lesbians as ‘A Non-Man Attracted to Non-Men’

June 16, 2023

America Lost An Hour Of Sleep Switching To Daylight Saving Time—Here’s How Sleep Loss Affects Your Health

March 14, 2023

Global experts call for ten urgent actions to address declining male fertility

October 12, 2023
Popular Posts

Short and Funny Sayings for a Happy Summer with Friends

May 9, 2025

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.