After Bank Debacle, Silicon Valley Reckons With Its Image
Some tried to combat the anti-tech perception that was bubbling up on social media. Over the weekend, Garry Tan, the president of the start-up incubator Y Combinator, sent a message to hundreds of founders and entrepreneurs telling them to begin posting “tweetstorms” to humanize the impact that Silicon Valley Bank’s failure was having on them.
The idea was to show how innovation could be stifled if depositors were not made whole, with the added benefit that more of those types of narratives would prevent some of the more outspoken “tech bro” venture capitalists and founders from becoming Silicon Valley’s faces of the situation.
“By coming together as a community and showing our strength, we can have an impact on the future of start-ups,” Mr. Tan wrote in the letter, which was obtained by The New York Times. He later posted an online petition to the government asking them “to save innovation in the American economy,” which was signed by more than 5,000 chief executives representing nearly half a million employees.
More than 600 venture capital firms also banded together on Saturday and Sunday to sign a statement, organized by the firm General Catalyst, expressing support for Silicon Valley Bank and disappointment in its failure. They encouraged pledged to their portfolio companies to resume banking with Silicon Valley Bank if the bank was sold.
What we consider before using anonymous sources. Do the sources know the information? What’s their motivation for telling us? Have they proven reliable in the past? Can we corroborate the information? Even with these questions satisfied, The Times uses anonymous sources as a last resort. The reporter and at least one editor know the identity of the source.
Many tech start-ups are banked with Silicon Valley Bank because it specializes in lending money to risky young companies, something that few banks offer. By its own admission, the bank provided banking services to nearly half of all venture-backed technology and life-science companies in the United States and was also a bank to more than 2,500 venture capital firms.
That gave it an outsize footprint in the start-up industry. In a letter to investors over the weekend, which was seen by The Times, Andreessen Horowitz, one of the highest-profile venture firms, said that roughly half of the start-ups it had invested in had banking relationships with Silicon Valley Bank. A spokeswoman for the firm declined to comment.
Mr. Fonseka, the venture capital investor, predicted the weekend’s events would create a permanent change in the way start-ups managed their money. Some tech companies were even looking at building a tech product that helped businesses manage money across multiple bank accounts, he said.