As tech founders and enterprise capitalists grapple with the news that the bank that hundreds of startups have relied on – Silicon Valley Bank – has collapsed, some fear it could also spell the tip of an era of innovation.
“The collapse of Silicon Valley Bank will leave an enormous hole to fill in the case of supporting start-ups, raising fears that nobody else will provide the form of support for start-ups that comes from the bank,” a technology insider with funds at SVB told The Post.
“In my view, it changes the very course of American innovation.”
The SVB would take risks with start-ups that other banks wouldn’t be willing to take, the people explained.
The bank even allowed founders to borrow against their firms—a profit that helped many San Francisco Bay residents afford their lifestyle.
“SVB was unique in fostering innovation…that is why it was built,” adds the source.
The source added that, especially after the bank’s dramatic collapse, other institutions are prone to be too timid to take that risk.
While many mourn the demise of an establishment that has supported the tech industry for many years, others note that the economic pain appears to be consistent with what the Federal Reserve desired to inflict on the economy.
“Jerome Powell got his wish,” one source said. “He destroyed the economy.”