When Silicon Valley Bank collapsed before our eyes on Thursday, one founder told me it was like the world felt when the teeth of COVID-19 first appeared. I scoffed at his analogy at first: are we really using an ongoing and devastating pandemic to describe the collapse of a well-known bank? But then I realized, we are indeed witnessing the crumbling of something sacred.
Today, I see parallels between the heady days of COVID and the surreality of last weekend — even among the collective relief that echoed in Silicon Valley as regulators said deposit funds would be fully available starting Monday. For the past four days, wI reported on a Twitter-induced bank run, SVB was seized by regulators, the result of the venture to help startups and resulting scramble of entrepreneurs to survive. While Tech Twitter wfrom shock to anger to dread to relief, everyone has fear resting on both shoulders.
Some investors spoke up, others pointed fingers, and even though Twitter was full of hot takes and out-of-date jokes, my DMs had never been more active with raw, real how-to stories. the collapse of the SVB affects people on the frontier of change. Today my DMS is full of people celebrating, pouring one, and appreciating a moment of outright relief as if the lockdown is over.
But while it sounds like the happy ending of a nightmare, here’s the irrevocable: people have been slapped in the face by the interconnectedness of technology and overdependence on certain institutions and voices. I think we are all reminded that a financial story is inherently a human story; and that failure of this magnitude affects more than just the “tech elite” and whatever your definition of Silicon Valley is. And, I would add, I wish there had been a realization that we should all stop trying to be banking experts (just as we should all stop trying to be epidemiologists).
I don’t see the tech working the same after what has been said, seen and pushed so hard over the past few weeks. Founders are more aware of which of their investors truly add value. VCs, usually friendly with the public, draw the lines and choose the teams I’m sure we’ll see act together in the future. And normal people have had their eyes opened to how the often insular world of ventures and startups (how messy) works.
Silicon Valley let out a collective sigh of relief at the news that depositors would be covered by regulators. There are still many questions that must be settled before the rebuilding begins. But the big future story is still being written, both in better understanding what’s broken and what’s broken in the broader Silicon Valley tank.
