"It makes me disappointed in our ecosystem," the startup CEO said. Still, the collapse of SVB left a poor taste in the mouth of the executive, who said the bank's collapse feels like "unnecessary hysteria." One AI startup executive said the company's chief financial officer was quick to handle the situation and it had enough money to pay employees on time. Several venture capitalists quickly told their portfolio companies to move money out of Silicon Valley Bank to other banks, including Merrill Lynch, First Republic and JP Morgan, so they could pay their employees on time next week. When asked for comment, a representative from SVB referred CNBC back to the FDIC announcement, adding, "The FDIC will share additional information when it is available." 'A Twitter-led bank run' Everybody at that moment now has to try and imagine what everybody else is going to do." However, one tech CEO was sympathetic to the bank's plight, asking, "What message would ever reassure you that your money is safe when other people are telling you that there's a fraud happening? There's no message, because it's not a messaging thing. It added toward the end of the email, "Moreover, we have a 40 year history navigating bear and bull markets and have developed leading risk mitigation capabilities to ensure our long term financial health."Īnother venture capitalist said that a representative from SVB called their firm on Thursday to assuage their fears but that the firm's CFO "didn't feel that it was reassuring, to say the least." "It is business as usual at SVB," the bank said in the email to startups. SVB attempted to quell fears that it was financially unsound as late as Thursday evening. "So, unfortunately, they repeated mistakes in history, and anyone who lived through that period said, 'Hey, maybe they're not fine we were told that last time,'" the VC said. One VC said that SVB announcing that it's raising money while at the same time essentially saying that everything is "fine" seemed to trigger people's memories of Lehman Brothers, who they remember acted similarly at the time. The general sentiment is that SVB did a poor job communicating to clients when it announced Wednesday that it would be raising $500 million from venture firm General Atlantic while also unloading holdings worth roughly $21 billion at a loss of $1.8 billion. Many of the investors and execs requested anonymity as they were discussing matters that might affect their firms and employees. Numerous venture investors and technology executives expressed shock to CNBC, some comparing SVB's debacle to that of Lehman Brothers, which filed for bankruptcy in 2008. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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