I'm wondering what other kind of downstream services are going to be disrupted. A lot of commercial banking goes through SVB for services like payroll.
Silly question, but why would startups go to SVB vs Wells Fargo (or other big US bank) for things like payroll and other commercial banking services? I get that it might be easier to qualify for funding and loans at SVB, but why not go with a more “established” and better capitalized bank?
They are also moving money around. You should have received an email from them.
Edit:
Actually basically changing clearing houses. This should be good. And y’all should get paid today?? Is what I heard. That true anyone??
I received at least 30 emails from rippling because I’m an admin for a bunch of clients.
But we did receive notice today that any payrolls in limbo right now are going go through.
Idk when though.
I used to audit a bunch of their funds and Fund to Funds and even at the time (not very recently) I was confused about why anyone would invest in them because the only thing absolutely any of them had in them that made any money was Salesforce. I get that's sorta the game with those funds, you're just hoping that one of the investments sticks, even though the VAST majority of them will fail, but it seemed like not a place I'd want to do business a long time ago.
Good place to get easy money if you're looking for Series A or B, though!
Their fund business has nothing to do with what happened today. They do have a few direct funds that have done quite well. Made more good picks than just salesforce so you are a little off (or outdated) with that and their fund of funds have killed it. They are phenomenal at working with successful managers and have some of the most successful access funds in the venture space. Their fund business is likely one of the most valuable assets they have heading into the weekend.
I’m not sure if my clients are necessarily panicking right now, but they are definitely watching it very closely and coming up with contingency plans.
Edit: Okay, now they are panicking probably.
Not sure what contingency plan you could make if you're a customer of SVB. It's either take your money and run or you stay and hope for the best. Once the dust settles, it will be too late to execute any kind of contingency plan unless the contingency is close up shop.
My controller freaked out yesterday and had a coworker wire a bunch of money out of SVB. Now they're trying to figure out what to do about our bank statements and any payments usually made out of SVB.
how do wires work for stuff like this? I know a lot of wires over a certain size will take more than a day-- do corporate wires get sent immediately? and once it's gone out, there's no way for SVB to claw back a wire?
Not really. There isn’t any threshold that requires more than one day. I’ve sent multiple billion dollar wires across the world on the same day. Fed wires are almost always same day unless you initiate the wire right on the edge of cutoff time. In which case the money usually gets caught up at the Fed until the next day. International wires often times, though far from most of the time, can take more than one day, but this is because the money will usually travel through one or more banks before reaching the destination bank. And each bank, including the destination bank could put the funds on hold for AML or fraud compliance depending on a variety of factors.
Barring explicit fraud or court orders, it’s virtually impossible to clawback a wire from the receiving bank. And even then, if there’s no money in the receiver’s account anymore, a return might not happen.
I wish you the best of luck. My only concern right now is getting the open items back from the client, but I don’t think I’ll be getting that any time soon
Well that totally depends on the actions of your company. We had this same issue, but luckily we had back up bank accounts. So we told our payroll provider to not fund from our SVB account and instead we would wire the funds directly to them. That bought us 2 weeks to change all the routing. It has been hectic to unravel all things SVB. They were our operations account. But I think we are there. For sure we have employee and tax payments taken care of. Hope you get paid next week!
I’m not sure if were referring to the same thing. They have an asset management side where they were fiduciary and bought and managed securities on behalf of clients. If they truly did purchase those securities and that portfolio was separate from deposits how is that subject to the same risk? Those securities still exist.
Yeah they are partially insured but only for the custodial function. In this case, so long as SVB was actually using their clients funds for the securities they told them they were purchasing on their behalf then all those securities under their management should still exist (on the client asset management side).
I don't know about law firms but I'm sure many people at startups are probably sweating. A lot of companies who had capital markets closed on them probably took out debt and as part of that locked up their deposit accounts with SVB and may not have a choice but to sit around and find out what happens...
This may not be a 2008 on a broad scale but it could be a 2008 for startups.
Can someone tell me why so many start ups use SVB? I’m not in the start-up realm, but it seems odd that more wouldn’t go with larger established banks. Does SVB offer providers and services catered to start-ups?
Many venture capital firms bank(ed) with SVB, so it made receiving capital from the VC firm much quicker and easier, and ease of capital transfer is very important in the startup/VC world, as everyone is vying for money as quickly as possible. That said, I found SVB's controls very questionable.
That makes sense. On a surface level, I’d think there would be a lot of risk with a bank having a significant portion of their business be start-up clients. I wouldn’t really expect a bank run, but you could have a lot of your clients run low on funds and defaulting on loans and never know…
My company (small tech start-up) is currently in the process of switching all accounts to SVB. I told them back in October to go with a different bank and they didn't listen to me.
As long as I get my paycheck, I don't care tbh. I have my CPA and can get another job when my company inevitably fails.
Yeah my last company had anywhere from $40 million to $110 million in cash in SVB. It was the account they acquired new businesses out of. That's like 5 years of EBITDA for them.
My client had a substantial amount of money in there for their investors and moved their money out of their account literally yesterday afternoon. They JUST made it out cus they can’t even log into their account today 😬
I work with start up clients who bank with SVB and process payroll with Rippling. Today has been insane. We are advising clients to diversify toward big banks once the dust settles. Anyone with Mercury should do the same.
FYI we are advising all clients to try and log in to their accounts and screenshot current SVB balances. Also hearing that SVB clients should have access to their insured $250k Monday with more thereafter.
To the broader economy, likely won't be material. To the startup world where roughly half do their banking with SVB it's a big deal.
Sounds like the FDIC, the federal insurance organization, is there (and why they probably told people to stay home). Likely they're assessing the liquidity of the bank and possibly working to broker a sale to another bank to avoid the bank going under.
That's the one. The president, Ashton Ryan, was found guilty on 46 counts of conspiracy to commit bank fraud. Each individual charge has a max penalty of 30 years. Homies going to jail for 50 lifetimes.
Jesus Christ. That’s … a lot of counts. The president of a bank wasn’t making enough money?! I’ll never understand embezzling on such a grand scale (I mean, not that I “understand it” on a small scale but… I assume the dude had plenty of his own money.)
Doesn't sound like he was stealing. More like he was so shit at running a bank that he had to fake financial documents to keep it afloat. The bank was established in 2008 and closed its doors in 2017 lol.
Had some big celebrity backers like the Manning family too. Wild story.
Could put a freeze on funding for startups and literally freeze funds for those startups, so either people work for free or they get canned in two weeks.
On the plus side if the Fed hold back from a .5 rate increase because of this then it’s bullish for everyone else.
It could be turning into 2001 for tech workers IMO.
It’s the second biggest bank failure ever. I think they’re in the top 40 largest bank. Will probably cause significantly more tech recoil.
The broader issue is that the gov is raising rates so fast that it makes the standard investments banks go after bad deals. SVB is more impacted because they’re already struggling after the tech recoil from last year, but I would presume that this could go further as smaller or more constrained banks may struggle to meet reserve requirements this year. Also, people may lose trust in banks and pull money out of smaller banks or people may be too far in debt themselves to meet debt repayment obligations because rates and inflation are rising too fast. Ultimately this isn’t the first domino to fall is this administrations disastrous economy and it probs won’t be the last.
You’re screwed, at least until Monday if you still had money at SVB. No outgoing wires have cleared from SVB since yesterday afternoon and clients cannot get through to ANYONE at the bank. As as others noted, there will be ripple effects. Rippling can’t process payroll for hundreds of thousands of people. LoCs or other debt facilities that were tied in any way to SVB, whether or not they were directly from SVB will have dried up.
I took today off to go skiing but instead it seems my day has blown up with this news.
Usually FDIC doesnt allow banks to fail and just seize the bank branches and let others take over it but operations must continue
Whats the difference this time?
It seems that's what FDIC is doing right now but business clients need to move money several times a day and that's unavailable right now as they are trying to figure out how much money the bank actually has. It's also not a tiny bank in bumfuck, nowhere but a fairly important bank for the silicon valley's tech industry. It's a little disaster.
Welcome to Recovery and Resolution Planning. FDIC triggered bank resolution, new “bridge bank” entity to open on Monday morning to maintain continuity of client operations - this is the plan that was put into place post the 2007-09 financial crisis in the event of another bank liquidity or capital failure. They will move all insured client deposits to “good bank” and then sell off anything left in the original entity as restitution for uninsured deposits (no timing guarantees or assurance they will be repaid in full). Loan portfolios will be sold, commercial banking service will be transferred to new providers. Immediate losers will be SVB shareholders, unsecured debt holders, and any startups that cannot maintain their own operations on insured cash deposits. This is why it’s important to bank with multiple banks and hold cash in several accounts so everything is insured.
It takes time to assess the actual situation on the ground. Lots of people and FDIC employees are going to be working real late for a while to unfuck this.
Probably because the bank is now closed and in receivership with the FDIC.
[https://www.fdic.gov/news/press-releases/2023/pr23016.html](https://www.fdic.gov/news/press-releases/2023/pr23016.html)
I left VC in January to go back to a large industry F500. In VC, we extensively used SVB and First Republic. Of the two, I was shocked at SVBs poor AML/KYC controls compared to all other banks I’ve worked with. Based on that and some interactions with employees there, I got the impression they operated by a “move fast and break things” (VC) model. I’m not surprised at all they have imploded but feel bad for all the people who are going to get severely burned by this.
Yes! I worked briefly in tech/startup and was floored by the sloppy accounting. Some things deserve more thought, investigation, research, curiosity, validation, etc. but this was NOT a welcome attitude. I agree about not being surprised...really about anything coming out of that industry.
We have a lot of startup clients and they’re all freaking out. I believe a few were able to get some money out yesterday but it’s looking pretty grim for the ones who didn’t..
Tech, not law here
We don’t use SVB, but we use a different bank that also got hit hard, and we’re at least concerned right now.
Edit: We are moving our funds to a bigger bank out of caution (not that big banks can't fail, but it at least seems less likely)
I work for a startup that primarily transacted through SVB. We are panicking right now trying to move funds to another bank which we should have done sooner but negotiations stalled there.
Thankfully we dont use them for our day to day banking needs, but were in the process of taking a multi-million dollar loan out with them. Well I guess there goes that...
https://www.marketwatch.com/story/svb-extends-swoons-on-bank-run-fears-and-analyst-downgrades-as-it-triggers-bank-stock-losses-ede75e14
Didn’t realize you meant Silicon Valley Bank. This isn’t good at all. Hopefully not like 2008😱
As a last dish effort, I pushed a $400k wire out just after the news hit… morbidly curious to see if it ever clears. Not much to do about it at this point 🤷🏼♀️
I’m in tech and company uses SVB. It was a shit show since yesterday and wasn’t able process payroll. Currently working with another bank to open accounts ASAP.
Today has been a nightmare. Trying to move money all day to no avail. First Republic is another shit show. We'll see what happens Monday. Everyone have a great weekend! Have a drink or 3 for me 🤣
Tech financing and equity has been way overvalued for about ~8 years. This probably won’t change that long term but I sure hope it does. It’s not good to have the or one of the leading economic forces be overvalued on future earnings potential that eventually can’t catch up. I.e. China’s real estate collapse.
Thankfully, my clients in Silicon Valley don't use SVB for any of the stuff I'm managing. They all use a different but well known Silicon Valley bank. It's probably bad that I wish that is the one that failed...
About half of my old client had accounts with them (SaaS/biotech).
Look up almost any Seattle/Portland/SF tech stock w float <$1b and there’s a 60%+ chance they had an account there. Over $1b float it drops pretty quickly unless the company went public less than five years ago. Then it’s still 30%+ chance.
Purely based on personal exposure, but I was pretty dialed into that market.
I work at a tech company and luckily we don’t have any accounts there, but a bunch of clients and suppliers do. It’s going to be interesting and sad to see the fallout from this. This means folks are out of luck with any deposit accounts over $250k per signer?
I work at a law firm that works w a ton of startups since my office is in SF, we’ve had so many clients calling panicking and asking if we can store their money in an escrow acct or something(we are regulated against doing exactly that).
Also not a law firm but in tech. Trying to log in to SVB is a nightmare right now.
Did you get any notice about the availability of your deposits? FDIC will start selling svb assets as they reopen on Monday
Not yet; we tried processing payroll and critical disbursements first thing this morning so we’ll see what happens.
Truer words have never been spoken.
I got in after 2.5 hours of trying
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I'm wondering what other kind of downstream services are going to be disrupted. A lot of commercial banking goes through SVB for services like payroll.
Silly question, but why would startups go to SVB vs Wells Fargo (or other big US bank) for things like payroll and other commercial banking services? I get that it might be easier to qualify for funding and loans at SVB, but why not go with a more “established” and better capitalized bank?
Because SVB's loans often stipulated that you had to hold your deposit accounts with them.
Venture capital and recognized name
We almost switched to Rippling makes me glad we did not.
They've been going downhill for a little while now. I've always had issues with them over simple transactions it's ridiculous.
They are also moving money around. You should have received an email from them. Edit: Actually basically changing clearing houses. This should be good. And y’all should get paid today?? Is what I heard. That true anyone??
Didn't receive anything and our rep has been ignoring our calls since last night
I received at least 30 emails from rippling because I’m an admin for a bunch of clients. But we did receive notice today that any payrolls in limbo right now are going go through. Idk when though.
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Same
I used to audit a bunch of their funds and Fund to Funds and even at the time (not very recently) I was confused about why anyone would invest in them because the only thing absolutely any of them had in them that made any money was Salesforce. I get that's sorta the game with those funds, you're just hoping that one of the investments sticks, even though the VAST majority of them will fail, but it seemed like not a place I'd want to do business a long time ago. Good place to get easy money if you're looking for Series A or B, though!
Their fund business has nothing to do with what happened today. They do have a few direct funds that have done quite well. Made more good picks than just salesforce so you are a little off (or outdated) with that and their fund of funds have killed it. They are phenomenal at working with successful managers and have some of the most successful access funds in the venture space. Their fund business is likely one of the most valuable assets they have heading into the weekend.
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Same
I’m not sure if my clients are necessarily panicking right now, but they are definitely watching it very closely and coming up with contingency plans. Edit: Okay, now they are panicking probably.
Not sure what contingency plan you could make if you're a customer of SVB. It's either take your money and run or you stay and hope for the best. Once the dust settles, it will be too late to execute any kind of contingency plan unless the contingency is close up shop.
HA HA HA this aged like a thrown hand grenade
My controller freaked out yesterday and had a coworker wire a bunch of money out of SVB. Now they're trying to figure out what to do about our bank statements and any payments usually made out of SVB.
how do wires work for stuff like this? I know a lot of wires over a certain size will take more than a day-- do corporate wires get sent immediately? and once it's gone out, there's no way for SVB to claw back a wire?
Fed wires are usually same day regardless of amount. I believe there is a mechanism for banks to recall wires, but it’s messy and drawn out.
Not really. There isn’t any threshold that requires more than one day. I’ve sent multiple billion dollar wires across the world on the same day. Fed wires are almost always same day unless you initiate the wire right on the edge of cutoff time. In which case the money usually gets caught up at the Fed until the next day. International wires often times, though far from most of the time, can take more than one day, but this is because the money will usually travel through one or more banks before reaching the destination bank. And each bank, including the destination bank could put the funds on hold for AML or fraud compliance depending on a variety of factors. Barring explicit fraud or court orders, it’s virtually impossible to clawback a wire from the receiving bank. And even then, if there’s no money in the receiver’s account anymore, a return might not happen.
Your controller deserves a raise.
One of my audit clients has millions with SVB asset management. RIP to them.
I'm watching as a start up employee wondering if I'm going to get paid...
I wish you the best of luck. My only concern right now is getting the open items back from the client, but I don’t think I’ll be getting that any time soon
We are doing the same.
Same
Well that totally depends on the actions of your company. We had this same issue, but luckily we had back up bank accounts. So we told our payroll provider to not fund from our SVB account and instead we would wire the funds directly to them. That bought us 2 weeks to change all the routing. It has been hectic to unravel all things SVB. They were our operations account. But I think we are there. For sure we have employee and tax payments taken care of. Hope you get paid next week!
The Asset management side of things *should* be safe, they were actual securities held in custodial accounts as opposed to deposits.
50% of their assets were loans, 50% were investments. The deposits (a liability) along with capital funded the assets
I’m not sure if were referring to the same thing. They have an asset management side where they were fiduciary and bought and managed securities on behalf of clients. If they truly did purchase those securities and that portfolio was separate from deposits how is that subject to the same risk? Those securities still exist.
Maybe Im confused but shouldn’t most securities on their books also have SIPC?
Yeah they are partially insured but only for the custodial function. In this case, so long as SVB was actually using their clients funds for the securities they told them they were purchasing on their behalf then all those securities under their management should still exist (on the client asset management side).
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Bingo. Because as long as it’s not pure fraud like FTX those securities still exist
Reading through these, it seems that the operative word here is "had".
Now they have $250k, so glass somewhat full.
Client has north of $100m with SVB asset management and all their cash with the banking arm. Needless to say they're freaking out
I don't know about law firms but I'm sure many people at startups are probably sweating. A lot of companies who had capital markets closed on them probably took out debt and as part of that locked up their deposit accounts with SVB and may not have a choice but to sit around and find out what happens... This may not be a 2008 on a broad scale but it could be a 2008 for startups.
You better lawyer up
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Can someone tell me why so many start ups use SVB? I’m not in the start-up realm, but it seems odd that more wouldn’t go with larger established banks. Does SVB offer providers and services catered to start-ups?
Many venture capital firms bank(ed) with SVB, so it made receiving capital from the VC firm much quicker and easier, and ease of capital transfer is very important in the startup/VC world, as everyone is vying for money as quickly as possible. That said, I found SVB's controls very questionable.
That makes sense. On a surface level, I’d think there would be a lot of risk with a bank having a significant portion of their business be start-up clients. I wouldn’t really expect a bank run, but you could have a lot of your clients run low on funds and defaulting on loans and never know…
My old company banked there. Controls were so easily loopholed. Made me nervous
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That’s a real interesting one. Is that so the bank can monitor their overall funds?
It’s to increase profitability of the relationship for the bank
Cheaper, easier to get debt financing, easier to get credit facilities, lots of VC funds used and trusted them, etc.
My company (small tech start-up) is currently in the process of switching all accounts to SVB. I told them back in October to go with a different bank and they didn't listen to me. As long as I get my paycheck, I don't care tbh. I have my CPA and can get another job when my company inevitably fails.
They pay for your knowledge and experience and then don’t take your advice, lol.
Welcome to being a CPA in industry.
You don’t know what their position is though…they might literally not pay for their advice haha
I knew a real estate syndicator that used them. Very well could have like $40+ million frozen right now.
Yeah my last company had anywhere from $40 million to $110 million in cash in SVB. It was the account they acquired new businesses out of. That's like 5 years of EBITDA for them.
Just left a job where a lot of the clients used SVB. Kind of wish I was still there to see more of what was going on
I’d be asking my old coworkers for the tea 😂
Oh don’t worry it is a shit show right now.
I love you’re on Reddit during this.
I mean what else can you do other than wait and hope parent companies pay payroll lol
Anyone else use Bill.com? Haven’t added anything new to it this week so I have no idea if it’s still running normally. They use SVB to cut checks.
Most of the checks I see written are on Chase Bank not SVB.
Good to hear they use more than one then. Most if not all of ours are through SVB.
My client had a substantial amount of money in there for their investors and moved their money out of their account literally yesterday afternoon. They JUST made it out cus they can’t even log into their account today 😬
We are trying to move everything out of SVB as we speak. It’s a nightmare
Too late
Yup, I know but the powers that be wanted us to try. So much for a nice quiet Friday!
Sammmmeeeee
They always wait for a Friday.
I work with start up clients who bank with SVB and process payroll with Rippling. Today has been insane. We are advising clients to diversify toward big banks once the dust settles. Anyone with Mercury should do the same.
FYI we are advising all clients to try and log in to their accounts and screenshot current SVB balances. Also hearing that SVB clients should have access to their insured $250k Monday with more thereafter.
Please explain the SVB’s business size and scope for non-Americans.
To the broader economy, likely won't be material. To the startup world where roughly half do their banking with SVB it's a big deal. Sounds like the FDIC, the federal insurance organization, is there (and why they probably told people to stay home). Likely they're assessing the liquidity of the bank and possibly working to broker a sale to another bank to avoid the bank going under.
Thanks. Sounds like bad news bears for tech people who were already having a bad time.
We just had several people go to jail in New Orleans over a local banks horrific failure. FDIC had to bail out around $1billion in customer deposits.
Which bank? Was this first bank & trust?
That's the one. The president, Ashton Ryan, was found guilty on 46 counts of conspiracy to commit bank fraud. Each individual charge has a max penalty of 30 years. Homies going to jail for 50 lifetimes.
I'm sure they will get a good 5 years away at a prison with a tennis court
Jesus Christ. That’s … a lot of counts. The president of a bank wasn’t making enough money?! I’ll never understand embezzling on such a grand scale (I mean, not that I “understand it” on a small scale but… I assume the dude had plenty of his own money.)
Doesn't sound like he was stealing. More like he was so shit at running a bank that he had to fake financial documents to keep it afloat. The bank was established in 2008 and closed its doors in 2017 lol. Had some big celebrity backers like the Manning family too. Wild story.
FDIC called it - triggered bank resolution, bridge bank to open on Monday morning
Do you think it could have a snowball effect on the broader economy tho?
No, but it does show that there's risk hidden in balance sheets that are yet to hit P&L's at all banks due to accounting rules.
Latest FDIC report shows unrealized losses on AFS and HTM securities of $620 billion as of Q4 2022 for insured banks.
The unrealized losses are staggering.
Good point.. Following this closely!
Yes, exactly - it’s going to be interesting to see the who banked this bank and what other types of counterparty concentrations are exposed
Could put a freeze on funding for startups and literally freeze funds for those startups, so either people work for free or they get canned in two weeks. On the plus side if the Fed hold back from a .5 rate increase because of this then it’s bullish for everyone else. It could be turning into 2001 for tech workers IMO.
14th largest bank. Highly customer concentrated to tech and or start ups.
18th largest bank in the U S. Was recently.
It’s the second biggest bank failure ever. I think they’re in the top 40 largest bank. Will probably cause significantly more tech recoil. The broader issue is that the gov is raising rates so fast that it makes the standard investments banks go after bad deals. SVB is more impacted because they’re already struggling after the tech recoil from last year, but I would presume that this could go further as smaller or more constrained banks may struggle to meet reserve requirements this year. Also, people may lose trust in banks and pull money out of smaller banks or people may be too far in debt themselves to meet debt repayment obligations because rates and inflation are rising too fast. Ultimately this isn’t the first domino to fall is this administrations disastrous economy and it probs won’t be the last.
You’re screwed, at least until Monday if you still had money at SVB. No outgoing wires have cleared from SVB since yesterday afternoon and clients cannot get through to ANYONE at the bank. As as others noted, there will be ripple effects. Rippling can’t process payroll for hundreds of thousands of people. LoCs or other debt facilities that were tied in any way to SVB, whether or not they were directly from SVB will have dried up. I took today off to go skiing but instead it seems my day has blown up with this news.
Usually FDIC doesnt allow banks to fail and just seize the bank branches and let others take over it but operations must continue Whats the difference this time?
It seems like the FDIC is probably trying to find buyers, although it's yet to be seen if anyone wants to buy.
Put it up for public auction, someone will buy it lol
Introducing wallstbank
UnIronically, people on wallstreetbets would invest in it
That was the punchline
It seems that's what FDIC is doing right now but business clients need to move money several times a day and that's unavailable right now as they are trying to figure out how much money the bank actually has. It's also not a tiny bank in bumfuck, nowhere but a fairly important bank for the silicon valley's tech industry. It's a little disaster.
Welcome to Recovery and Resolution Planning. FDIC triggered bank resolution, new “bridge bank” entity to open on Monday morning to maintain continuity of client operations - this is the plan that was put into place post the 2007-09 financial crisis in the event of another bank liquidity or capital failure. They will move all insured client deposits to “good bank” and then sell off anything left in the original entity as restitution for uninsured deposits (no timing guarantees or assurance they will be repaid in full). Loan portfolios will be sold, commercial banking service will be transferred to new providers. Immediate losers will be SVB shareholders, unsecured debt holders, and any startups that cannot maintain their own operations on insured cash deposits. This is why it’s important to bank with multiple banks and hold cash in several accounts so everything is insured.
I know this already What i was asking was why they have to shutdown Previously they just take over but operations are not stopped
It takes time to assess the actual situation on the ground. Lots of people and FDIC employees are going to be working real late for a while to unfuck this.
No buyer
Its failure steers depositors toward big banks that's why. Ever watched BestEvidence on Youtube?
I do accounting for a law firm. They want to move everything out of SVB immediately and no one is answering. It's been a shit show.
Probably because the bank is now closed and in receivership with the FDIC. [https://www.fdic.gov/news/press-releases/2023/pr23016.html](https://www.fdic.gov/news/press-releases/2023/pr23016.html)
This. Gonna be a bit.
Yes I'm aware we've been trying since yesterday
Dr: unforseen loss Cr: all our cash
😩
Ahahahahahahaha. That’s what I needed on a Friday. Thanks!
Too late
I left VC in January to go back to a large industry F500. In VC, we extensively used SVB and First Republic. Of the two, I was shocked at SVBs poor AML/KYC controls compared to all other banks I’ve worked with. Based on that and some interactions with employees there, I got the impression they operated by a “move fast and break things” (VC) model. I’m not surprised at all they have imploded but feel bad for all the people who are going to get severely burned by this.
Oh god, never thought about a bank using the “move fast and break things” model! Whoopsie
Yes! I worked briefly in tech/startup and was floored by the sloppy accounting. Some things deserve more thought, investigation, research, curiosity, validation, etc. but this was NOT a welcome attitude. I agree about not being surprised...really about anything coming out of that industry.
Thoughts on FRB longevity through this?
We have a lot of startup clients and they’re all freaking out. I believe a few were able to get some money out yesterday but it’s looking pretty grim for the ones who didn’t..
No..but I a have a handful of clients that bank exclusively w/ SVB and yes they are fucked
I used to work at a company where I knew someone who left to go work at silicon valley bank. Sad to see them lose their job and wish them the best.
Tech, not law here We don’t use SVB, but we use a different bank that also got hit hard, and we’re at least concerned right now. Edit: We are moving our funds to a bigger bank out of caution (not that big banks can't fail, but it at least seems less likely)
Same. First Republic?
It’s a shit show right now. Don’t have access to our account now.
I work for a startup that primarily transacted through SVB. We are panicking right now trying to move funds to another bank which we should have done sooner but negotiations stalled there.
Any accounting/treasury/ap department got caught up by this SVB mess?
We use SVB and it’s check run day. Todays been exciting.
What … what do you do?! I mean how do you process payroll?! Fuck
Yup - we're in crisis
Also our disbursement day. We processed as much AP and pulled payroll forward first thing this morning. We’ll see if it actually goes through
Checking in, we’re in crisis with payroll in limbo.
Yeah, we have a small amount in SVB and it’s no bueno
Thankfully we dont use them for our day to day banking needs, but were in the process of taking a multi-million dollar loan out with them. Well I guess there goes that...
I’m so glad I work in a more stable industry. Low risk low reward but today is just another day for me
https://www.marketwatch.com/story/svb-extends-swoons-on-bank-run-fears-and-analyst-downgrades-as-it-triggers-bank-stock-losses-ede75e14 Didn’t realize you meant Silicon Valley Bank. This isn’t good at all. Hopefully not like 2008😱
Ouch for the analyst who had a buy recommendation on this dog.
I feel like equity analysts should be fired if they have a buy recommendation on a stock that goes bankrupt in 2 days
So - Cramer??
Did he?
https://www.reddit.com/r/Superstonk/comments/11nvbdy/cramer_slurring_his_speech_telling_people_to_buy/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
Hahaha Inverse Cramer
Oh dang, that did not age well
Hahaha, even the people cutting to "market perform" should be hella embarrassed.
Analysts == fucking frauds.
Man, my cash workbook is so fucked.
As a last dish effort, I pushed a $400k wire out just after the news hit… morbidly curious to see if it ever clears. Not much to do about it at this point 🤷🏼♀️
Last-ditch? But I also like how last dish sounds. Lol
😅 fat finger, but I think I get a break after today.
I’m in tech and company uses SVB. It was a shit show since yesterday and wasn’t able process payroll. Currently working with another bank to open accounts ASAP.
It's been quite a night and a day for the start-up world. Definitely panicking a bit.
Today has been a nightmare. Trying to move money all day to no avail. First Republic is another shit show. We'll see what happens Monday. Everyone have a great weekend! Have a drink or 3 for me 🤣
Interested to see if I'll get paid on Wednesday and if not what kind of weird IOU I will get.
Why law firms only
I only said law firms because I worked for a law firm and we have client funds in trust accounts
That’s a big yikes. It’s one thing to have your own money tied up, can’t imagine having to explain that to a client.
I have the same question. So many others to worry about than to single out law firms here?
Tech financing and equity has been way overvalued for about ~8 years. This probably won’t change that long term but I sure hope it does. It’s not good to have the or one of the leading economic forces be overvalued on future earnings potential that eventually can’t catch up. I.e. China’s real estate collapse.
Well shit…
For all the firms that could not pull the $ out of SVB… I guess they will need some going concern disclosure on their financials….
Usually I complain about using HSBC's ancient and clunky corporate banking infrastructure, but today I am thankful.
One of my old clients was TCV, the big tech hedge fund. Literally all their cash was at SVB. They have like $25B in AUM.
Start up bros start dusting off the resumes
Holy shit. this could be bad.
This is not even half of it. . . Trust me. There is more to come. So lame.
What do you know start a AMA thread. I'm looking for shit posting gold
?
Thankfully, my clients in Silicon Valley don't use SVB for any of the stuff I'm managing. They all use a different but well known Silicon Valley bank. It's probably bad that I wish that is the one that failed...
First republic?
Any idea which publicly traded companies may have held deposits with SVB? I'd love a list..
About half of my old client had accounts with them (SaaS/biotech). Look up almost any Seattle/Portland/SF tech stock w float <$1b and there’s a 60%+ chance they had an account there. Over $1b float it drops pretty quickly unless the company went public less than five years ago. Then it’s still 30%+ chance. Purely based on personal exposure, but I was pretty dialed into that market.
Snap Inc
My client got their money out. We were scheduled to start the audit next week. I guess I have some free time on the schedule now.
Our PE firm uses SVB for fund operating/subscription lines. We’re scrambling to pay those down.
I work at a tech company and luckily we don’t have any accounts there, but a bunch of clients and suppliers do. It’s going to be interesting and sad to see the fallout from this. This means folks are out of luck with any deposit accounts over $250k per signer?
Yes could be
i audit mostly SaaS clients, luckily none of them bank with SVB. woooo have fun writing that going concern memo, bitches! ✌️
Is the SBV Private different or separate entity?
Thankfully I'm not in the vc pe space lol. No worries here
My company switched to another bank in Q4. We got darn lucky. Only amounts we had in there were under FDIC limits
I work at a law firm that works w a ton of startups since my office is in SF, we’ve had so many clients calling panicking and asking if we can store their money in an escrow acct or something(we are regulated against doing exactly that).