SVB Seattle leader asks customers to return: ‘No safer institution to hold deposits’
Silicon Valley Bank Market Manager Minh Le. (GeekWire Photo / Todd Bishop)
Silicon Valley Bank wants you back.
The 40-year-old institution now supported by the U.S. government is making a plea to customers following its collapse last week.
“Please consider cancelling any outgoing wires this morning and send as many deposits as possible back to SVB today,” Minh Le, a longtime market manager for SVB’s Washington and Western Canada region, wrote in a LinkedIn post Wednesday morning. “If you moved funds seeking safety, there is now no safer institution to hold deposits at than SVB.”
He added: “If you’ve asked how you can support us, this is the best way to do it.”
CEOs and investors rushed to withdraw their funds from SVB amid a massive bank run that took down the 40-year-old institution used by a majority of Seattle-area startups.
Many breathed a sigh of relief over the weekend when regulators vowed to fully protect insured and uninsured SVB deposits after the bank collapsed.
“We are open for business and are hard at work bringing all systems and solutions back online to support you,” Tim Mayopoulos, CEO of Silicon Valley Bridge Bank, the newly established firm created by regulators to manage the bank, wrote in a memo Tuesday. “We are making new loans and fully honoring existing credit facilities.”
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Now some companies are returning to SVB.
Isaiah Deporto Plick, co-founder of pre-seed venture fund Fuerza Ventures, told GeekWire he already wired money back into an SVB account. Plick, a former corporate development manager at SVB, said the bank has been instrumental in supporting the innovation ecosystem, particularly in the venture debt market and promoting diversity.
Jason Stoffer, partner at Maveron, said some founders who thought their venture debt lines would go away are now thinking about re-establishing a relationship with SVB, which was the leading provider of venture debt.
But founders are “reflexively cautious” said James Newell, managing director at Voyager Capital, given the ongoing macroeconomic shakiness.
“SVB is making the case that they are technically the safest bank in the world given the Fed backstop,” he said. “This is probably true but tough for founders and boards to wrap their heads around.”
Others remain wary of SVB.
“Would I tell a portfolio company to prioritize exploring a loan with SVB over another bank at this moment? Absolutely not,” said Aviel Ginzburg, general partner at Seattle VC firm Founders’ Co-op.
Some founders are spreading their cash across multiple bank accounts to mitigate the risk of another bank failure, turning to giant institutions like JPMorgan Chase and Bank of America.
“We are not going back,” said JT Garwood, CEO of Seattle startup bttn. “All money is out and will stay out.”
In many respects, the future of SVB is still in flux, and the outcome will depend in part on which investors or institutions end up with the bank’s assets through an auction reportedly underway as part of the FDIC receivership.
“These founders have been whipsawed,” said Stoffer.
SVB’s Le thanked the bank’s venture capital and private equity partners in his post for encouraging their portfolio companies to maintain primary operating accounts and deposits with SVB.
A significant number of outgoing wire transfers were cancelled Tuesday morning and many deposits were expected to return in the afternoon, Le wrote.
Newell expects another entity to fill the void left by SVB.
“Perhaps it will even be the ‘old SVB’ team in some new form. We’re all rooting for them,” he said. “But in the intermediate term, I suspect that early-stage company formation just won’t be quite as efficient as it was when SVB was working hard to help their clients.”
GeekWire managing editor Taylor Soper contributed to this report.