Although the Federal Deposit Insurance Company (FDIC) sold Silicon Valley Bank‘s fortune and already making some of its customers’ uninsured deposits available on Monday, startups remain concerned about their future and are hoping a buyer will emerge for the bank by then.
SVB has backed nearly half of US venture-backed startups, according to the bank. And because significant funds are currently tied up, many startups are worried about payroll in the coming days.
Nikita Beerwho founded the social media app gasfor example, took to Twitter on Friday to share his distress.
in a (n interview Tan further revealed to the Wall Street Journal that a survey of Y Combinator’s approximately 3,000 active companies found that nearly 400 had a relationship with SVB and were uncovered. Over 100 of those companies said they were concerned they wouldn’t be doing payroll in the next 30 days without a quick resolution to the SVB situation.
Some start-ups indirectly linked to SVB were also hit by its collapse.
healthtech startup flow healthuses a payroll provider, for example lapping, which has ties to the SVB. “We literally have no way of paying employees right now,” said Flow Health CEO Alex Meshkin told Insider.
toy store camp similarly put, it is distressed because its funds are frozen at the SVB.
“All of our cash has been with SVB and we’re trying to build our bankroll with Chase,” said Camp CEO and co-founder Ben Kaufman insiders said.
If SVB can’t find a buyer, the FDIC may have to liquidate the bank and sell its assets to bring depositors like Camp back to health.
“The FDIC will love to have the bank bought out of their hands and I’m sure they’ll be working furiously over the weekend to arrange a shotgun wedding.” Sandeep Dahiyaassociate professor of finance at Georgetown University’s McDonough School of Business, according to Insider.
SVB, a…
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