The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch 20VC: SVB: What Happened? What Happens Now? Will Depositors Have Deposits Guaranteed? How Long Will It Take? Will There Be a Buyer? Who is the Most Likely Buyer? What is the Best and Worst Outcome?
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Mar 12, 2023 In this discussion, Jackie Reses, CEO of Lead Bank, and Kris Dickson, CFO of Lead Bank and former Lehman Brothers CFO, unpack the rapid downfall of Silicon Valley Bank. They explore the critical role of venture capitalists, social media, and management missteps in the crisis. The duo also examines the implications for depositors, discussing potential guarantees and the viability of neo-banks. With insights into possible buyers for SVB and strategies for restoring depositor confidence, their conversation sheds light on navigating turbulent financial waters.
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SVB Failure Cause
- SVB's failure stemmed from a concentration in the VC/tech ecosystem and a bet on long-dated securities.
- This bet backfired when interest rates rose and tech funding slowed, leading to a deposit shrink and a capital hole.
SVB PR Missteps
- Jackie Reses explains SVB's PR missteps worsened the crisis.
- Announcing a capital raise while facing solvency rumors sparked panic and a bank run.
VCs and SVB
- While VCs pulling funds contributed, blaming them solely is unfair, argues Jackie Reses.
- Fiduciary duty requires them to protect their companies, especially during potential bank failures.