Silicon Valley Bank: A US (California)-based tech-focused lender witnessed a downfall of around 60% on Friday. The collapse took place after their parent firm went public about the loss of $1.8 billion on the sale of $21 billion of its securities. Silicon Valley Bank became the largest US bank to collapse since the financial crisis of 2008. In a globalised world when such a fiasco takes place in one part of the world, it is bound to affect even the distant corner. The same is the case with the downfall of Silicon Valley Bank.
Repercussions of SVB’s collapse on startups
The crashing of SVB has been a nightmare for its clients. The SVB was intensively engaged with tech startups. An American startup booster indulged in backing thousands of startups including hundreds from India has sent a letter to the US Treasury Secretary Janet Yellen and others. They have expressed their concerns regarding the layoffs of more than 1,00,000 workers in it. The letter further requests the US Treasury Secretary to take steps in order to prevent such a catastrophe.
A petition is also being circulated widely to save hundreds of startups and thousands of jobs in this regard. The petition was initiated by Garry Tan, who is the CEO and President of Y Combinator. So far it has received a positive response and support from approx. 1,200 CEO currently acting as the representatives of thousands of employees.
What does the petition include?
As per the information from the National Venture Capital Association (NVCA), the California-based Silicon Valley Bank has over 37,000 small firms with deposits totalling more than $250,000. The petition further mentions that “These balances are now unavailable to them, and without further intervention, according to the FDIC website, may be inaccessible for months to years.”
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