Venture capitalists are blaming each other for triggering the disastrous collaps...
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Venture capitalists are blaming each other for triggering the disastrous collapse of Silicon Valley Bank
The collapse of Silicon Valley Bank has sent shockwaves through the tech industry.
In the fallout, a blame game has ensued among venture capitalists.
While some call out social media frenzy, others place responsibility squarely on the shoulders of SVB execs.
The venture capital community has resorted to finger-pointing in the fallout of Silicon Valley Bank's implosion that jolted the tech industry.
The failure of Silicon Valley Bank sent startup founders reeling on Friday as many lost access to their funds. A bank run of $42 billion in withdrawals — roughly 25% of the bank's $161 billion in deposits — meant regulators had to shut down Silicon Valley's once beloved bank.
Some say SVB executives are on the hook for its fall, after spending the last few years in an "exposed position," Jamie Montgomery, co-founder and managing partner of March Capital, told Insider on Friday. However, others are placing the blame elsewhere.
In the wake of the abrupt collapse, venture capitalists are blaming each other for playing a role in the largest bank failure since the 2008 financial crisis. Many say their fellow VCs incited unnecessary panic online that ended SVB's decades-long run.
Although SVB CEO Greg Becker tried to calm top venture capitalists in a Thursday phone call, he conceded that the bank would only be in trouble if "everyone is telling each other SVB is in trouble." Ultimately, that's exactly what happened, Mark Suster, a manager partner at Upfront Ventures, told Insider on Friday.
"If you are in a movie theater and it's not on fire and you yell fire, and then you congratulate yourself for being out first while other people are laying on the floor, do you sleep well tonight?" Suster asked.
"The problem is that we're in a state of social media where everyone is hearing at the same time, 'Oh my God, this bank's going down," he told Insider.
The whispers of "liquidity issues" reportedly began in December 2022 as founders started quietly switching banks, and panic only continued to rise online in the months leading up to SVB's collapse.
FortuneSilicon Valley Bank’s collapse is already causing collateral damage that’s sinking stablecoin values and delaying paychecks
The tech ecosystem has been tossed into turmoil as , one of the nation’s largest banks for startups, collapsed Friday following a run on deposits. Now, with the bank’s assets frozen and under the control of the Federal Deposit Insurance Corporation, SVB’s customers, employees, and investors are grappling with a mountain of questions. Customers will […]
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