As the 40-year-old banking institution, Silicon Valley Bank (SVB), winds down operation, numerous venture capitalists and investors joined hands and decided to cushion the impact in case the bank “were to be purchased and appropriately capitalized.” according to media reports.
Approximately 125 VCs and investors signed a statement supporting SVB as a way to limit the fallout of the bank’s collapse and subsequent extinction of tech companies. The venture firms included Sequoia Capital and General Catalyst.
Several VC leaders met today to discuss the aftermath of SVB’s downfall. This is a joint statement from all of us. @Accel @altcap @BCapitalGroup @generalcatalyst @eladgil @GreylockVC @khoslaventures @kleinerperkins @lightspeedvp @MayfieldFund @Redpoint @RibbitCapital @upfrontvc pic.twitter.com/7OtHq0zwT1
— Hemant Taneja (@htaneja) March 11, 2023
A group of investors for high-profile firms met over Zoom in a series of meetings, disclosed a media report. Hemant Taneja, the CEO of General Catalyst, initially revealed the joint statement from several VCs, showing support for the bank. It read:
“In the event that SVB were to be purchased and appropriately capitalized, we would be strongly supportive and encourage our portfolio companies to resume their banking relationships with them.”
In parallel, startup incubator Y Combinator, too, posted a petition demanding “depositors to be made whole, and for regulation to prevent this catastrophe.”
According to Y Combinator CEO Gary Tan, the petition — directed toward regulators including Secretary Janet Yellen and Chairman Martin Gruenberg — scored signatures from roughly 2800 founders and 180,000 employees at the time of writing.
“Everyone understands that we have a role to play in trying to calm the situation,” Taneja told Bloomberg. However, disputing this drive to save SVB, prominent Indian entrepreneur Ashneer Grover reminded Taneja that banks don’t get saved by passing bureaucratic, UN-type joint resolutions — taking a dig at the typical VC mindset of pouring money to fix a problem. “It requires intent and balls of steel!” he concluded.