As the 40-year-old banking institution, Silicon Valley Bank (SVB), winds down operation, numerous venture capitalists and investors joined hands and decided to cushion the impact in case the bank “were to be purchased and appropriately capitalized.”
Approximately 125 VCs and investors signed a statement supporting SVB as a way to limit the fallout of the bank’s collapse and subsequent extinction of tech companies. The venture firms included Sequoia Capital and General Catalyst.
A group of investors for high-profile firms met over Zoom in a series of meetings, disclosed a Bloomberg report. Hemant Taneja, the CEO of General Catalyst, initially revealed the joint statement from several VCs, showing support for the bank. It read:
“In the event that SVB were to be purchased and appropriately capitalized, we would be strongly supportive and encourage our portfolio companies to resume their banking relationships with them.”
In parallel, startup incubator Y Combinator, too, posted a petition demanding “depositors to be made whole, and for regulation to prevent this catastrophe.”
According to Y Combinator CEO Gary Tan, the petition — directed toward regulators including Secretary Janet Yellen and Chairman Martin Gruenberg — scored signatures from roughly 2800 founders and 180,000 employees at the time of writing.
“Everyone understands that we have a role to play in trying to calm the situation,” Taneja told Bloomberg. However, disputing this drive to save SVB, prominent Indian entrepreneur Ashneer Grover reminded Taneja that banks don’t get saved by passing bureaucratic, UN-type joint resolutions — taking a dig at the typical VC mindset of pouring money to fix a problem. “It requires intent and balls of steel!” he concluded.
Related: Silicon Valley Bank’s UK branch shut down by Bank of England
Hours after USD Coin (USDC) lost its peg to the US dollar, unconfirmed reports about a resolution momentarily brought back the token’s prices to nearly $1.
Although the reports are currently unverified, multiple sources confirm that many different tracks to resolution are being worked on and that depositors will get back “at least 50% of their deposits” in the coming week.