It was called Silicon Valley Bank, but its collapse is causing shockwaves around the world.
Across the Atlantic, startup companies woke up Saturday to find SVB’s U.K. business will stop making payments or accepting deposits. The Bank of England said late Friday that it will put Silicon Valley Bank UK in its insolvency procedure, which will pay out eligible depositors up to 170,000 British pounds for joint accounts “as quickly as possible.”
It’s not just startups feeling the pain. The bank’s collapse is having an effect on another important California industry: fine wines. It’s been an influential lender to vineyards since the 1990s.Article content“This is a huge disappointment,” said winemaker Jasmine Hirsch, the general manager of Hirsch Vineyards in California’s Sonoma County.
In Seattle, Shelf Engine CEO Stefan Kalb found himself immersed in emergency meetings devoted to figuring how to meet payroll instead of focusing on his startup company’s business of helping grocers manage their food orders.Article content Fung said her firm chose the bank as a partner because it is the “gold standard for tech firms and banking partnerships,” and she was upset that some people seemed to be gloating about its failure and unfairly tying it to doubts about cryptocurrency ventures.
“I think a lot of founders were sharing the logic that, you know, there’s no downside to pulling up the money to be safe,” Murray said. “And so we all did that, hence the bank run.”Article content But other companies have high percentages of their cash in Silicon Valley Bank, and they need access to more than the amount protected by the FDIC.
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