More than 100 venture capital and investment firms have signed a statement supporting Bank of Silicon Valleyamid growing industry calls to limit the fallout from the bank’s meltdown and avert a potential “extinction level event” for tech companies.
Saturday afternoon in San Francisco, about 125 venture capitalists, including Capital Sequoia had signed the statement, led by venture capital firm General Catalyst, according to a person familiar with the matter. First issued on Friday by a small group of signatories, the statement called the events of the past two days “deeply disappointing and concerning”, and said investors would continue their relationship with the institution if it were taken over by a other entity.
Also on Saturday, startup incubator Y Combinator posted a petition signed by hundreds of founders and CEOs to US Treasury Secretary Janet Yellen and other regulators, asking for “relief and attention to an immediate critical impact on small businesses, startups and their employees who are depositors in the bank.” The petition called for small businesses that had deposited funds at Silicon Valley Bank to be reinstated and for Congress to “reinstate stricter regulatory oversight and capital requirements for regional banks.”
On Friday, a group of investors for leading companies convened on Zoom in a series of meetings, according to a person familiar with the discussions. General Catalyst CEO Hemant Taneja posted the resulting statement on Twitter after the meetings, indicating support from Kleiner Perkins, Khosla Ventures and others. Within hours, more than 100 other companies signed up, including Sequoia, said one of the people, who asked not to be identified because the discussions were private.
“Silicon Valley Bank is a long-standing and trusted partner to the venture capital industry and our founders,” the statement said. “For forty years, it has been an important platform that has played a central role in serving the startup community and supporting the innovation economy in the United States.”
General Catalyst’s Taneja told Bloomberg that it’s important for technology leaders to communicate and agree on a “coherent approach that we hope can maintain business continuity for our businesses.” He added: “Everyone understands that we have a role to play in trying to calm the situation.”
Taneja also said that “the run on the bank was an unintended consequence of many investors trying to do the right thing for their own businesses” and that “panic was not the way to handle it.” He said he wished investors had guided companies to withdraw three to six months of operating capital from the bank, rather than advising them to withdraw all their money.
Many tech leaders have been in touch with lawmakers and regulators since SVB’s collapse, encouraging them to focus on businesses and jobs threatened by the crisis.
For VCs and startups, the mood in Silicon Valley heading into the weekend was grim. On Saturday morning, investors, founders and tech industry executives scrapped weekend plans to try to contain the fallout from the Silicon Valley Bank collapse for their companies and businesses.
Many investors have taken to Twitter and other channels to make the case for supporting SVB depositors. Y Combinator Chairman Garry Tan on Friday called the bank’s collapse an “extinction-level event” for businesses and tweeted a call for regulators to intervene.
On Friday night, many investors and startup founders attended a webinar with US Congressman Ro Khanna, a Democrat from Santa Clara, Calif., that lasted more than two and a half hours. A person present said Khanna had expressed frustration with the White House for remaining silent on the matter. A representative for Khanna said he answered 70 questions and the meeting mostly focused on helping startups with payroll.
On Saturday, the congressman tweeted that he was urging the White House and the Treasury Department to do “everything legally allowed” to support the bank.
— With help from Hannah Miller
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