Tech Brew Ride Home Mon. 03/13 – Crisis Averted?
Mar 13, 2023
A significant tech crisis involving Silicon Valley Bank raises questions about the future of trust in the tech sector as regulators intervene to protect depositors. Apple faces internal strife as Tim Cook pushes forward with a controversial mixed-reality headset design. Meanwhile, the high costs of developing generative AI spark discussions on financing and partnerships, and the rapid commoditization of AI models brings to light essential concerns about privacy and safety in this evolving landscape.
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Portfolio Company Experiences
- One Ride Home portfolio company withdrew $3 million from SVB before the bank run.
- Another portfolio company with $13 million locked up in SVB UK could only access £200,000, jeopardizing a $2 million acquisition.
Startup Payroll Concerns
- A six-person portfolio company with $600,000 in SVB faced payroll issues amidst the bank run.
- They considered layoffs or halting founder salaries while awaiting access to FDIC-insured funds.
Wider Economic Concerns
- While the SVB crisis seems averted, all banking stocks, especially regional banks, are declining.
- This could cause wider economic problems beyond tech.