Hundreds of tech startups may have to lay off employees or close down completely as Silicon Valley Bank collapses, with the amount of depositors' money to be returned remaining uncertain.
Stefan Kalb was in the middle of a meeting around 1 p.m. on Thursday when a fellow company executive sent him a panicked Slack message:"Do you know what's happening at SVB?"
While he declined to provide the exact amount, he noted that Shelf Engine has raised more than $60 million from investors."It was a very large sum of money," he said of the transfer. While critics consider the idea of the government recusing the bank a bailout for the tech and venture capital world, Tan argues that such a move would save depositors, many of which are small businesses in the tech sector.in 1983, Silicon Valley Bank became the go-to lender for tech startups that appeared too risky in the eyes of larger, more traditional banks. Eventually, Silicon Valley Bank would come to do business with nearly half of all U.S. tech startups backed by venture capitalists.
Tan, with Y Combinator, which helped launch startups including Airbnb, Reddit and Instacart, said the biggest threat right now is not to the Rokus of the world, but rather to the scrappy startups that were already fighting to stay alive amid a challenging fundraising environment. And when the FDIC sells the assets of Silicon Valley Bank, those with certificates will receive payments — but how long that will take, and what amount of money will be paid back, remains unclear.
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