SVB collapse: a direct hit to technology entrepreneurs

Last Friday, Silicon Valley Bank SVB was declared bankrupt after losing more than $1.8 billion directly and more than $11 billion in collateral damage.

Silicon Valley Bank (SVB) was known for serving the vast majority of customers residing in this popular region of California.

Within the technology industry it is well known that, in the American territory, Silicon Valley is home to the largest companies in the region; such as Apple, AMD, EBay, Google, Meta, Twitter, Ripple, Nvidia, Paypal, Oracle and many more.

From there, the perception is born that Silicon Valley is indeed the capital of technological development, the city where Silicon Valley Bank operated and where it served many of these companies.

In fact, we can highlight that there are technological giants that this situation may not have affected them due to their great hierarchy in the industry, but it is also true that for those who are entrepreneurs, or who are already in growth processes and had their funds in SVB, the impact is also strong.

Among those affected are: Ripple, Circle, Coinbase, Paxos, and Ava Labs.

Ripple stated in a tweet, “had some exposure to SVB: it was a banking partner and held part of our cash balance.” Despite this, Ripple CEO Garlinghouse stated that Ripple expects “no disruption to our day-to-day business” and that the company “remains in a strong financial position.”

Another of those who exposed having had money inside SVB was Circle, to the tune of 3 billion, or about 8.25% of its USDC reserves, which does not affect its operability.

There is a feeling of uncertainty among the small entrepreneur sector, as Silicon Valley Bank was known for supporting technology entrepreneurs, mainly in their first steps.

Only users who had no more than $250,000 USD will be insured 100% by the US government, the rest will only be insured up to this amount.

Finally, these will be days in which technology entrepreneurs will have to think very carefully about their moves, their investment potentials, which industry they should work with and the risks they should take to get ahead.

Share this article

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

November last year, Spain attracted the world’s attention by being one of the first…
In a historic collaboration, whiskey producer Jack Daniels and Yahoo Creative Studios joined forces…
A few months ago the bitcoin exchange announced its bankruptcy; however, John Ray III,…