SVB teaches tech startups a crucial lesson about cash

By Parmy Olson

15 Mar 2023 · 3 min read

Editor's Note

Bloomberg's Parmy Olson notes how factors that led to SVB's success among startups also led to its downfall and why diversifying cash portfolio over multiple banks is crucial.

If you were the founder of a tech startup in the United States or Europe, you may have gone to bed on Friday with the onset of an ulcer and woke up on Monday in a state of pure relief.

Over the weekend, banks, regulators and governments swooped in to contain the fallout from the collapse of Silicon Valley Bank, a lender of choice for technology startups in the U.S., U.K. and parts of Europe. Unable to access funds, many depositors feared they'd be unable pay invoices or even their own staff in the coming weeks. On top of the ongoing tech rout and increased scrutiny venture capital firms have been giving to startups, this was going to be the mother of all curve balls.

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