Silicon Valley Bank Failure: What it means for the startup community.

As a former wealth manager and someone who has been a part of the startup community for a number of years now as a founder of Buildily and now co-founder of adaine, the news that Silicon Valley Bank had filed for bankruptcy shocked me. For those who don't know, the US government closed SVB in what is being referred to as the worst collapse of a financial organisation since the 2008 financial crisis. SVB's fall is a historic event that cannot be ignored by anybody in the startup world, since it had $209 billion in assets and $175.4 billion in deposits at the time of its bankruptcy.

Several of the venture capital-backed businesses are anticipated to be damaged by this closure because the bank was a crucial source of financing for them. I know how important it is for entrepreneurs to have access to reliable financial institutions that can support their growth and help them to flourish. Its sudden death is stunning since SVB was a go-to for many tech companies.

While it's natural to experience worry and concern in the aftermath of this news, it's crucial to realise that this is not the same scenario as the 2008 financial catastrophe. Large banks have enough capital to prevent a comparable catastrophe, and there is little risk of spillover effects in the financial industry, as there was in the months preceding up to the recession more than a decade ago. But, this does not mean that the startup community is immune to the effects of this shutdown.

The fact is that many companies rely on institutions like SVB for assistance, and the bank's unexpected shutdown is likely to have a severe impact on the industry. For example, financing for startups, particularly those in the tech industry, may be reduced. Furthermore, it is probable that the sorts of financial institutions to whom entrepreneurs would turn for assistance may change. With SVB out of the picture, companies may need to look into other possibilities, resulting in a less diversified variety of financial institutions in the startup environment.

Of course, it's crucial to recognise that the closing of SVB will not affect all startups equally. Those with significant financial support and a proven track record of accomplishment may be less affected than smaller, younger businesses. This is not to say that we should be complacent or dismissive of the possible impact of this event on the startup community as a whole.

Being excited about the startup sector and the potential impact it may have on our culture and economy, I have high hopes that we will be able to weather this storm and emerge stronger on the other side. In spite of the fact that SVB's closure is shocking and undoubtedly a major setback, I believe it also offers the startup community a chance to come together and look into other possibilities for advancement.

I have faith that we'll find a way to go forward and continue to thrive, whether that means investigating alternative financing sources, establishing fresh partnerships with financial institutions, or just redoubling our commitment to innovation and resilience.

From a personal perspective, my thoughts go out to the many individuals working throughout SVB and to the startups at this time impacted by this event and I send my best regards and well wishes that they too will continue to thrive and weather this storm.

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