the fall of Silicon Valley Bank (SVB) struck hard at a sector that, because of the high interest rates He was already beaten by not being able to access financing. What sowed a new shock in the world of tech startups that they had entrusted the lender with their funds.
The SVB played An important paper in US tech investing, where one investor described it as “like a left ventricle” for the financial scene of Silicon Valley. As he wrote in the last few hours Michael Moritzof the venture capital firm Sequoia Capital, the SVB intervened when everyone else was ignorant of the sector and its collapse leaves a gaping hole in the scene of las startups.
He Silicon Valley Bank was an integral part of the venture capital and tech startup community for decades, until early March, Where did the distrust originate? when some 40 CFOs from various technology groups gathered in Utah to participate in the “annual snow summit” which was organized by the SVB itself.
US authorities investigate Silicon Valley Bank executives
According to him Financial TimesJust a week after the event, last Thursday morning, several of those same CFOs they started exchanging messages franticallyabout whether they should continue to keep their money in the bank.
In short, the sale made by the SVB for US$ 20,000 million in securities to mitigate a sharp drop in deposits caught the attention of investors, who were filled with doubts when wondering on the vulnerabilities of the entity’s balance sheet.
Firsthand: how three Argentine entrepreneurs experienced it
Forget itan Argentinian startup based in Miami had about US$250,000 in funds in the SVB. Your CEO, Rodrigo Irarrazavalquoted by bloomberg line, recounted how those hours of uncertainty and tension were. It should be noted that the firm has already recovered the funds.
“It looked like it was going to be a combination of the 2001 crisis with the fall of Lehman Brothers, although luckily the result was different. It all started on Thursday at 2 in the afternoon with a message from my lawyer. At 3:30 p.m., one of our investors who lives in the United States sends us a message so that we get the money from the SVB”, he commented to the aforementioned Irarrazaval medium.
In those first hours, he had to notify his investors that they had funds in the compromised lender and that they were trying to do what they could to recover the money. “ANDalmost 80% of our operating funds”, he detailed.
something similar lived Franco LacrampetteCEO and co-founder of Choice, a 100% online Argentine platform for medical care, prescription, delivery and replacement of health treatments. The fall of the SBV, he maintains, could have affected him despite the quick reaction they had within the firm to move the funds.
“That Thursday, just when we were about to start that meeting, messages began to arrive saying that the bank had liquidity problems. And like good Argentineswe thought ‘let’s not be the last, because those are the ones who are left with nothing,’ he estimated.
“In that same meeting we transferred 85% of our funds and we continue to workeither”. But as the hours passed, he received a new message advising him to withdraw all the money because the bank could go bankrupt. “In the afternoon we transfer the remaining 15% of our funds“, he pointed.
However, on Friday morning he detected that there was a problem with the two transfers. “The first shipment had not been credited, and for the remaining 15%, the transfer appeared as rejected and without reason”. In this context, early on Friday, they learned that the bank “had melted”.
Why Silicon Valley Bank fell and what the Federal Reserve can do
According to what he told bloomberg lineThey thought about surviving with the contingency insurance that lasted three months. On Sunday and after the intervention of the Federal Reserve everything calmed downbecause they guaranteed their deposit.
Another testimony is that of Martin Butco-founder and CEO of Nulinga, an e-learning platform that offers language learning solutions to corporate clients.
In this case, yes he was able to withdraw the funds from the SVB, but as he explains, it was not an easy decision. “When we opened the sale, something that cost us, we were very happy. It was like a synonym for status”.
However, he says that after seeing the message from the CEO of the SVB asking for calm, they became convinced that something bad was happening and if it did “it would have a tremendous impact”.
They immediately withdrew all the funds from the entity and distributed them in other entities to diversify. One part went to Brazil, another to Argentina, another to a custodian broker, and the last to a personal account of one of the partners. “We communicate all of this, in a completely transparent manner, to our investors,” he explained.
SE / LR
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