More than a dozen local firms are among those who have pulled money from Silicon Valley Bank, with the New York-listed group’s abrupt capital raise sparking a crisis of confidence that spread to Australia’s share market.
More than a dozen local start-ups are among those who have pulled money from Silicon Valley Bank, with the New York-listed group’s abrupt capital raise sparking a crisis of confidence that spread to Australia’s share market.
Square Peg Capital’s Paul Bassat says it’s unclear how deep the crisis of confidence in Silicon Valley Bank is.Silicon Valley Bank was forced to raise $US1.8 billion to plug losses as resulting in a fire sale of it bond portfolio. As the bank’s start-up customers failed to raise new funding or slow their cash burn, the depletion of its deposit base forced it to liquidate $US21 billion safe assets at a loss.
But Australia’s largest venture capital funds, Blackbird Ventures, Square Peg and AirTree spent Friday calming start-up founders who were questioning whether debt facilities would be honoured later this year and how long federal insurers would take to pay cash out if the bank did collapse. “If you’re wondering when your next VC cheque is coming from given all the macro clouds, then you’re definitely going to be protective of what you have in there,” one founder told“This is all downside risk. The upside is keep your money, downside is lose it, get it back but you’re not sure when.”
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