The sudden collapse of Silicon Valley Bank on Friday sent shockwaves through the startup community, which has come to view the lender as a source of reliable capital, particularly for some of tech’s biggest moonshots.
The bank has been central to the formation of many early stage companies due to its reputation for taking bets on startups that may have had little chance of survival otherwise and for which larger banks may find far too risky.
Dean Nelson, CEO of Cato Digital, was on a line outside of SVB's Santa Clara headquarters, hoping to get answers. He said he was worried about the company's ability to pay employees and cover expenses. "Access to the cash is the biggest problem for the majority of the companies here. If you’re a startup, cash is king. The cash and the workflow, to be able to have the runway is critical.
Tyrner was thwarted when she discovered the bank’s website wasn’t working. "My heart stopped," she said. As of Friday, FarmboxRx’s funds were still tied up with Silicon Valley Bank.The fate of Silicon Valley Bank cast new doubts on the funding environment just as some bright spots were emerging, particularly artificial intelligence, amid the grim fallout of 2022 that led many technology companies to trim jobs and pare back spending on riskier projects.
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