Welcome to Startups Weekly. A nuanced take on his news and trends in this week’s startup from Senior Reporter and Equity co-host. Natasha Mascarenhas. Subscribe to receive this in your inbox here.
AUTHOR’S NOTE: This week marks a departure from the usual format due to the once-in-a-generation failure of one of the country’s largest banks. Today’s space has been devoted to our coverage of this issue, but we’ll be back next week with broader programming.
On Friday I wrote about how Silicon Valley banks were shut down by regulators. The regulator is now in charge of bank deposits. Banks are expected to reopen on Monday. That means we, in the most collective sense, have a weekend of pauses, fears, and more questions. That’s weeks and months ahead. Y Combinator CEO Garry Tan said: This could delay startups and innovation by a decade.
After hours of talking to founders and venture capitalists about SVB, it’s clear that explaining the state of the bank’s business and its strengths doesn’t necessarily stop the panic we’re seeing. Panic permeates other banks’ volatility. Even a company that stands to benefit from the bankruptcy of SVB just hours ago.
The story changes rapidly, so I don’t talk half-heartedly. What I do know so far is that the collapse of SVB is a human story, despite a reasonable analysis of real business fundamentals. Here are the stories I’ve written about crashes so far:
Founders React to Silicon Valley Bank Failure
TechCrunch spoke to a dozen founders about how bank failures are impacting their businesses. This article highlights a few stories, from announcing fears of not being able to make payroll to bundling timely discount codes and blowing them up as a Hail Mary.
With SVB locked, how will startups pay?
My colleague Alex Wilhelm asked one of the biggest questions out loud so founders don’t have to: How are startups going to pay if SVB is still locked up? His TC+ analysis explains that entrepreneurs should think beyond payroll.? Cloud How does he handle vendor payments and refunds? (He said this is a human story.)
For startup competition, SVB’s nightmare is victory and challenge
This article attempts to dismantle the idea that falling SVB is good for competitors. Mary Ann Azevedo and I spoke to several startups experiencing an influx of demand. Some are excited. The question remains: Will startups that have been duped by traditional banks risk turning to private tech startups to hold on to their funding? Where do you go when you are reminded of the risks?
Venture firms advise investee companies to move funds out of SVB
As a third perspective, 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 money from SVB. Some recommend diversification.
If you want more, here’s a note on the stalled deal, a rundown of how this happened so quickly, and “collywobbles” elsewhere, and much more.
As always you can follow me twitter Or continue the conversation on Instagram. natasha.m@techcrunch.com or +1 925 271 0912 traffic light.
etc
Saw it on TechCrunch
The long farewell to Salesforce continues, with even more layoffs reported today
How the FBI Proved Remote Administration Tools Are Actually Malware
Meta is working on a decentralized social app
Elon Musk apologizes after openly mocking disabled Twitter employee
Seen on TechCrunch+
Uncertainty around multi-billion dollar USDC empire as issuer Circle holds reserves in Silicon Valley banks
What You Know About Computer Vision Could Be Wrong Right Away
Burn reduction at startups turns out to be more aspiration than reality
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