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Spotify Among Clients: Who Was Funded By The Bankrupt Silicon Valley Bank And What Happened To That Money



The bank was created 40 years ago. Silicon Valley banks were willing to take risks that other traditional banks were unwilling to take. This has allowed thousands of startups to get funding and become incredible success stories.

bankruptcy of Silicon Valley Bank (SVB) It rocked the tech industry.

The failure of this innovation-focused California bank may have sparked a string of bankruptcies in the sector.

However, on the afternoon of March 12, the US Supreme Authority announced that all deposits were finally protected. put an end to the nightmare 35,000 customers Mostly startup founders who come from banking.

They haven’t been able to withdraw a single dollar from their bank account since Friday. They urgently need the money as they have to pay their mid-March paycheck this week.

Many of them feared losing more. All of the capital they raised to finance their development was foolishly left in their favorite bank accounts.

The venture capital funds that support them are also bank customers, so there is some lightness in managing capital flows. But Janet Yellen’s all-deposit protection announced on March 12 put customers at ease.

Why did startups trust this bank so much?

Because it was made for them 40 years ago. Silicon Valley banks were willing to take risks other traditional banks were unwilling to take.

This has allowed thousands of startups to get funding and become incredible success stories.

Spotify streaming platforms, and Beyond Meat is one of the pioneers and loyal customers of meat substitutes. Half of new American companies have accounts with SVB.

Banks therefore play a key role in financing innovation in the United States. Also in the UK he has been operating for 18 years.

How will the technology be funded?

The bank can take over all the activities and customers of the auctioned SVB. But would he be willing to take the same risk if this savior proclaimed it?

Another open question is whether other innovation banks suffer similar problems to SVB.

On March 12, Signature Bank was declared insolvent and placed under the control of the Federal Deposit Guarantee Agency. These issues undermine trust and thus the entire funding structure. A new challenge after a turbulent year.

30% less investment in new businesses in 2022 In a sector where money used to flow freely.

The technical chief asked the administration for help

And the administration, which they love to denounce for regulatory overreach, is trying to answer their call.Treasury Secretary Janet Yellen Yesterday it denied a public bailout of the bank.

but at night announced that all customer deposits at Silicon Valley Banks and Signature Banks will be insured. decisions made at the top of government in consultation with Joe Biden .

Avoiding a repeat of the 2008 financial crisis was paramount in Washington, not technology, and it was desperate to reassure customers and all economic agents before the stock market reopened. .

Federal Deposit Guarantee Agency Only refunds up to $250,000 are allowed to the insured account. This only affects 4% of SVB deposits.

As such, government agencies will go far beyond their powers to save technology, banks, and possibly the global economy from collapse.

Source: Biobiochile

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