The tech bank collapse of 2023 – The Verge

Silicon Valley Bank went broke, but not because it was woke

2023-03-17T08:00:00-04:00

Passing the buck is an all-American sport | Illustration by Hugo Herrera / The Verge

The culture war has come for the banks, and friends, it is stupid.

There are a wide variety of proposed explanations for the fall of Silicon Valley Bank. For instance, The Wall Street Journal's editorial page has suggested SVB's board "may have been distracted by diversity demands" as I guess it had too many women, too many Black people (one), too many queer people (again, one), and too many veterans (???).

Meanwhile, in The Financial Times, the problem is that Silicon Valley Bank let people work from home. "It is harder to have a challenging call over Zoom. It makes it harder to challenge management," according to Nicholas Bloom, a profe …

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The Silicon Valley Bank fallout is just beginning

2023-03-15T19:00:35-04:00

The girls are fightinggggggg. | Illustration by Hugo Herrera / The Verge

Following the collapse of Silicon Valley Bank last week, a lot of companies and entrepreneurs have been making the flight to - at least perceived - safety. That means the biggest banks have been getting more deposits: JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo.

"Everyone is asking, 'Where should we bank? Where is it safe to bank?'" Ryan Gilbert, founder of Launchpad Capital, told Silicon Valley Business Journal. "When you think you bank with the safest bank in your ecosystem, and they disappeared overnight, you realize it's impossible to predict an earthquake." He moved his account to Chase.

"Where should we bank? Where is …

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The tech industry moved fast and broke its most prestigious bank

2023-03-13T17:37:52-04:00

On the last night of its existence, Silicon Valley Bank was hosting VC Bill Reichert of Pegasus Tech Ventures, who was giving a presentation on "How to Pitch Your WOW! to Investors" to about 45 or 50 people. Mike McEvoy, the CEO of OmniLayers, recounted the scene for me. "It was eerie over there," he said. He saw a number of people exiting the building during the event, looking subdued.

Roger Sanford, the CEO of Hcare Health and a self-described "professional Silicon Valley gadfly," was also there. "Everyone was in denial," he told me. "The band played on."

The next day, the emblematic bank of the tech industry was shut down by regulators …

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Signature Bank is closed by regulators, the third US bank failure in a week

2023-03-12T18:58:53-04:00

Signature Bank, one of the two big US destinations for crypto companies, has been closed by New York regulators. "All depositors of this institution will be made whole," the Treasury, Federal Reserve and Federal Deposit Insurance Corporation said in a joint statement.

This is the third major bank that has fallen in the space of a week, and investors are spooked. The joint announcement that depositors will be protected above the $250,000 guaranteed by the FDIC appears to be meant to reassure banking customers that their money will not be frozen. Signature had $88.59 billion in deposits as of December 31, 2022. The New York Department of Fina …

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Etsy is delaying seller payouts following Silicon Valley Bank’s collapse

2023-03-12T15:55:53-04:00

Etsy says some sellers won't receive their payments on time due to the sudden collapse of Silicon Valley Bank. In an email sent out to impacted shop owners, the company says it used the shuttered institution to send out deposits to "some sellers" and that they may not get their scheduled payments as a result, leaving shop owners worried about the future of their stores.

Etsy started notifying sellers about the potential delays on Friday, the same day the Federal Deposit Insurance Corporation and California regulators shut down Silicon Valley Bank. The bank served as a staple in the venture capital and startup industries, with companies like …

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Silicon Valley Bank has failed

2023-03-10T12:44:43-05:00

Within hours of reports that Silicon Valley Bank was considering a sale after it failed to raise enough money to keep going, state and federal banking regulators shut it down. In an announcement from the Federal Deposit Insurance Corporation (FDIC), the agency said, "All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023."

Silicon Valley Bank is important for venture capital firms and startups. But as the economy has changed, VC-funded companies burned through their available cash. Simultaneously, VC funding dried up. So Silicon Valley Bank's deposits dropped faster than the bank …

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Another tech bank is in deep trouble — but not because of crypto

2023-03-10T11:04:49-05:00

(Update 12:12PM ET: Federal and state regulators stepped in and shut down Silicon Valley Bank to protect insured deposits.)

Two days after Silvergate Bank announced its shutdown in a collapse with deep ties to problems with some of its crypto customers, Silicon Valley Bank is also struggling. Its stock price plunged more than 60 percent before trading was halted on Friday morning. It may sell itself - CNBC reports it's now in talks to sell itself, and Reuters says that it's "exploring options, including a sale."

Silicon Valley Bank is known for serving venture capital firms and the local tech startups those firms invested in. On Wednesday, …

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