Impacts of SVB’s Crisis on Startups
Silicon Valley Bank (SVB) has been a pillar of support for startups in the tech industry, providing them with financial resources, guidance, and networking opportunities. However, the bank is currently facing a crisis that could have significant implications for startups such as legal tech startups in Silicon Valley and beyond.
What happened?
Startups had parked large deposits at the bank in recent years, but now had to liquidate them faster than expected in light of rising interest rates. To be able to continue to provide customers with money, the bank had to sell bonds which brought losses because of recent price drops on the bond market. Then, the bank wanted to raise liquid funds via an emergency capital raise. But the attempt to raise fresh money from investors by issuing new shares caused further uncertainty.
Mike Schuman 
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