More than 100 venture capital and investment firms have signed a statement supporting Silicon Valley Bank, part of an industry call to limit the bank’s fallout and avoid a possible “extinction-level event” for tech companies.
As of Saturday afternoon in San Francisco, about 125 venture firms including Sequoia Capital had signed the statement, led by venture firm General Catalyst, according to people familiar with the matter. First released on Friday by a smaller group of signatories, the statement called the events of the last two days “extremely disappointing and concerning,” and said investors would continue their relationship with the institution if it were bought by another entity.
Also on Saturday, startup incubator Y Combinator posted a signed petition hundreds of founders and chief executives to US Treasury Secretary Janet Yellen and other regulators, requesting “relief and attention to the immediate critical impact on small businesses, startups, and employees who are depositors in banks.” The petition calls for an end to small business deposits at Silicon Valley Bank, and for Congress to “restore stronger regulatory oversight and capital requirements for regional banks.”
On Friday, a group of investors for the high-profile company met on Zoom in a series of meetings, according to one person familiar with the discussions. General Catalyst Chief Executive Officer Hemant Taneja posted a statement on Twitter after the meeting, citing support from Kleiner Perkins, Khosla Ventures and others. Within hours, more than 100 other companies signed on, including Sequoia, said one of the people, who asked not to be identified because the discussions were private.
“Silicon Valley Bank has been a trusted and long-standing partner to the venture capital industry and our founders,” the statement read. “For four decades, it has been an important platform that has played an important role in serving the startup community and supporting the innovation economy in the US.”
General Catalyst’s Taneja told Bloomberg that it’s important for leaders in communications technology to agree on “a consistent approach that we want to maintain business continuity for our company.” He added: “Everyone knows we have a role to play in trying to calm the situation.”
Taneja also said that “the run on the bank was an unintended consequence of many investors trying to do the right thing for their own companies” and that “panic is not the way to deal with it.” He said he wants investors to guide companies to get three to six months of operating capital out of the bank, rather than recommending that they get all cash.
Many tech leaders have been in touch with lawmakers and regulators since the collapse of SVB, urging them to focus on companies and jobs at risk from the crisis.
For VCs and startups, the mood in Silicon Valley was dark heading into the weekend. On Saturday morning, investors, founders and executives in the technology industry canceled their weekend plans to try to contain the fallout from the collapse of Silicon Valley Bank for companies and companies.
Many investors took to Twitter and other channels to advocate support for SVB depositors. Y Combinator president Garry Tan on Friday called the bank’s collapse an “extinction-level event” for the company and tweeted calls for regulators to step in.
On Friday night, many investors and startup founders attended a webinar with US Congressman Ro Khanna, Democrat from Santa Clara, California, which lasted more than two and a half hours. One person involved said Khanna expressed frustration with the White House for remaining silent on the issue. A representative for Khanna said he took 70 questions, and that the meeting mostly focused on helping startups make payroll.
On Saturday, the congressman tweeted that he urged the White House and the Treasury Department to do “whatever is legally allowed” to support the bank.
– With help from Hannah Miller
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