The biggest bank run in U.S. history, which dismantled the tech startup-focused Silicon Valley Bank in just 48 hours, isn’t over yet. But the debate in the venture capital community is already heating up, with investors choosing one side or the other.
On Friday, a group of more than 20 venture capital firms issued a joint statement in support of Silicon Valley Bank. This statement was not before, but especially after, the regulators of the Federal Deposit Insurance Corporation closed the banks and took control.
And the show of posthumous support continues to grow. By noon Saturday, more than 100 venture companies had added their names to the joint statement. The list also has a few notable omissions, including a16z, Founders Fund, Sequoia Capital, and Y Combinator.
Hemant Taneja, managing director at General Catalyst, wrote in a LinkedIn post on Friday that several venture capital leaders met to discuss the aftermath of the Silicon Valley Bank collapse. Dozens of venture capital’s most prominent firms have released a joint statement expressing their support and disappointment.
The first group included Accel, AltCap, B Capital, General Catalyst, Elad Gil, Greylock, Khosla Ventures, Kleiner Perkins, Lightspeed Venture Partners, Mayfield Fund, Redpoint Ventures, Ribbit Capital, and Upfront Ventures.
The statement read:
Silicon Valley Bank is a long-standing trusted partner to the venture capital industry and founders. For 40 years, it has been a vital platform serving the startup community and playing a pivotal role in supporting the US innovation economy.
The events that have unfolded over the past 48 hours are both deeply regrettable and concerning. If SVB is acquired and properly capitalized, we strongly support and encourage portfolio companies to resume banking relationships with SVB.
In particular, the group is asking portfolio companies not to be too content with which financial institution they have moved their assets to, and to be prepared to transfer their capital back to the SVB should the SVB be purchased and fully funded. increase. Over the past two days, a number of companies have admitted to moving assets from his SVB to traditional and digital banks such as JPMorgan Chase and Mercury. Several startups also share with TechCrunch that demand and relocation are on the rise.
While many expressed support for the move, others noted in the comments under the LinkedIn post that the effort was either too little or too late.
Sanjay Gosalia, Head of Product at SVB, commented in a LinkedIn post: “Not only are they very likely now missing valuable banking partners who have served them unconditionally during difficult times, they will also be underserved in their new banking relationships. They fundamentally betrayed their partners and definitely shot themselves in the leg.”
