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Well, here on earth. You say that is a sweet land.
This weekend was a busy one for a certain Silicon Valley bank. You couldn’t go anywhere this weekend without hearing dozens of speeches and finding out that everyone in San Francisco is an FDIC and National Bank loan expert, so that’s good (?) news (??).
In Friday’s special edition of Daily Crunch, we recapped what happened so far, but a lot has gone down since then (literally, spiritually, and figuratively), so here’s my best attempt to keep you Sanguinely, Vitally Briefed.
Natasha M He summed it up nicely: It was an off day. And BeccaAn examination of what SVB’s failure means for Venture Capital (TC+) is also worth reading.
– came
TCSB
Take a deep breath, because there’s a lot of information going down this firehose right now. It’s a great place to start. Alex And Natasha Trying to unpack the whole situation on today’s Equity Podcast.
What will you do next? Picture CEO Brett Adcock wrote the best playbook for TC+ founders at Silicon Valley Bank Accounts.
The extensive TechCrunch team has tons of news, analysis, and context. Here’s what happened over the past few days:
- The dominoes wanderFirst Republic Bank’s shares went into free fall after the demise of SVB, while Mercury halted trading after expanding FDIC insurance on its new Vault product to $3 million. Regulators have also shut down a crypto-friendly signature bank. Although the wheels are coming off, regulators have asked SVB workers to stay on for the next 45 days to fix the problem.
- But we’re okay, right? right?The Federal Reserve has announced that Silicon Valley bank depositors will be fully protected, though it’s unclear whether the Fed can move fast enough in a fast-paced, startup world that wants to pay wages every hour. Treasury Secretary Janet Yellen said on Sunday that the US government will not bail out Silicon Valley Bank. Y Combinator, in turn, asked Congress to act on the failure of SVB.
- So about “adding value”Venture capital is big enough to talk about adding value – and a lot of it is sitting on cash reserves. This seems like their chance to shine. Sam Altman, Vinod Khosla and other top VCs say they personally lend money to startups to cover salaries and other expenses. In other parts of the value chain, the ecosystem is also emerging. Dell, for example, is offering more than $120 million to support its customers, and Brax’s CEO has jumped into action to raise more than $1 billion in bridging loans to get startups up and running.
- Acceptance is what we do.The startup ecosystem may rely on banks, but it has been slow on its feet in responding to the crisis. Etsy has begun processing seller payments through alternative partners, and some major players in the ecosystem, such as Life360, Sezzle, Unity, and AppLovin, have announced their exposure to SVB in new disclosures. Roku, Roblox, and others have announced their exposure.
- Fire sale: The wreckage of the bank appears to be burning, SVB Financial is reportedly looking for a buyer for SVB Securities and SVB Capital VC divisions, and an FDIC auction of SVB’s assets is said to be underway.
- International disorders: It’s not just in Silicon Valley that it’s reverberating. The general controversy is causing panic in China’s startup industry, and in a historic last-minute deal, HSBC Bank has bought Silicon Valley Bank UK, assuring customers that all their deposits are safe. The reaction from the UK’s tech ecosystem shows just how serious the bank’s failure is, reaching overseas. Global regulators have frozen SVB’s assets at its global subsidiaries in Canada and Germany, and the fallout is affecting many Indian startups.
- SVB flamed out, BTC fired: We were so angry at the hot poll that “if everything was on crypto, this could be removed”, but crypto doesn’t give two craps about our noise, and we jumped 18% during the SVB crisis, Jacqueline He reported.
- It could have been avoided.Investor Mark Suster says a “handful” of bad actors in VC ruined Silicon Valley Bank.
The SVB collapse is covered in more context and analysis in our other newsletters. For example, see this week’s fintech newsletter The Interchange.
Startups and VCs
In non-banking news:
Building a PLG movement on usage-based pricing
Image Credits: Miguelangelortega (Opens in a new window) / Getty Images
Last July, Puneet Gupta, former AWS CEO and now CEO and co-founder of Amberflo.io, wrote a TC+ article explaining how SaaS startups are adopting a usage-based business model.
In a follow-up published today, he shares four methods teams can use to collect, analyze and use customer data to take the guesswork out of pricing decisions.
“When it comes time to make decisions about product packaging and pricing, the first place to go should be a benchmark for historical usage data,” he wrote.
Three more from the TC+ team:
TechCrunch+ Our membership program helps founders and startup teams stay ahead of the pack. You can register here.. Use code “DC” for 15% off annual subscription!
Big Tech Inc.
Block monitoring firm PeckShield sent an obnoxious tweet directly at crypto lending platform Euler Financial saying, “Hi, you might want to take a look.” Lorenzo Reports. A series of transactions indicated an ongoing hack at Uller.
A few others to keep you busy:
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