Silicon Valley Bank’s collapse puts pressure on young firm
Josh Butler, chief executive of workplace safety analytics startup CompScience, said he couldn’t get his company’s money out of the bank before the bank collapsed on Thursday or Friday. He said the last day was nerve-wracking.
“From my investors to my employees to my own mother, everyone reached out and asked what happened,” Mr Butler said. “The big question is how soon will we get the remaining funds, and how much if at all? It’s absolutely dire.”
CompScience is suspending spending on marketing, sales and recruiting until it can address more pressing issues, such as payroll. Mr Butler said he was bracing for a big crisis, given the doom and gloom across the industry.
But “did I expect it to be Silicon Valley Bank?” he said. “no way.”
Camp, a startup that sells gifts and experiences for kids, added a banner to its website on Friday that read: “Our banks just closed — so everything is on sale!”
The site offers a 40 percent discount with the promo code “bankrun,” along with a meme that includes words like “I never liked the Bay Area” and “how could this happen.” A representative for Camp said the sale was related to the collapse of Silicon Valley Bank and declined further comment.
Better Tomorrow Ventures investor Sheel Mohnot said his venture capital firm on Thursday advised its start-ups to move money into Treasuries and open other bank accounts out of an abundance of caution.
“Once a bank run starts, it’s very difficult to stop,” he said.
Some of the start-ups Mr Monott’s firm invested in chose not to move the money, while others were unable to act in time before the banks collapsed, he said. Right now, their biggest concern is getting paid, followed by figuring out how to pay their bills, he said.