Qubit: Startup Banking at SVB
The main concern for founders and VCs today was whether their cash in the bank will still be there tomorrow.
Reviewing SVB's mid-quarter update:
US VC investment activity will likely drop 15-20% this quarter
Startups' cash burn is 2x higher than pre-2021 levels
56% of their loans are capital call lines to PE/VC funds
9% of their loans are to startups (both early- and growth-stage)
None of this is new information for those speculating about SVB's financial health but, unfortunately, emotions do not care about data when "fear" takes hold.
Source:
Silicon Valley Bank - Q1 2023 Mid-Quarter Update
Tweets and Posts:
A lot of panic re: SVB (you should see my phone/emails!). A bank run driven by panic is the real risk here, not the action of selling LT securities at loss
I have no inside information as I left SVB in 2012, but know enough about banking to piece together.
Quick 🧵
1/ More in the VC community need to speak out publicly to quell the panic about @SVB_Financial ... I believe their CEO when he says they are solvent and not in violation of any banking ratios & goal was to raise & strengthen balance sheet
Silicon Valley Bank $SIVB is in trouble.
It sold off a $21 billion bond portfolio for a huge loss to shore up liquidity.
The market is worried and the stock is down 54% today.
Here’s what you should know 🧵
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