FarmboxRx CEO Ashley Tyrner warned that the bank’s closure will have more far-reaching impacts on the startup world.
Innovation in the startup world is bleeding today, and it’s hurt, Tyrner said on The Big Money Show” Friday. “And everybody is trying to figure out what is Monday going to bring. Is it only going to be [$250,000]? When can we access the rest of our capital? And that’s what leads me to believe that something, some type of a bailout has to happen because the world’s innovation of technology is at a hold right now.
Tyrner described SVB as “the hub to innovation for startups and explained that the economy “as a whole” has created a more difficult climate for startups to find funding.
It’s the economy as a whole,” Tyrner said. “It’s not just that they made investments that went the wrong way. It’s also that VCs are not writing checks to startups and deposits are not coming into the bank. So that’s the bigger piece here than just that they made a bad investment. They’re not getting deposits because venture capital is not funding startups like they were two years ago.”
The Federal Deposit Insurance Corporation seized control of SVB after it was closed by the California Department of Financial Protection and Innovation on Friday, which in turn appointed FDIC as the receiver of all insured deposits of the bank.
The FDIC, which covers accounts up to $250,000, said insured SVB depositors would regain access to their accounts no later than Monday morning, and uninsured depositors will receive “an advance dividend within the next week.
Tyrner shared that while the FDIC covers accounts to the $250,000 threshold, she has had little communication with SVB about her remaining millions.
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“The bank is not telling us anything, so we have no idea if [$250,000] our entire balance will be available on Monday. We’re very fortunate that we’ve diversified our accounts, and we have plenty of money to keep the business afloat in other banks. But SVB will not tell us anything.”
While her company has diversified assets, there are some with SVB accounts whose businesses are now threatened by the collapse.
Innovation in the startup world is bleeding today.
I’ve talked to three founders that have all of their funds in SVB. They’re beside themselves. They don’t know what they’re going to do because they don’t have money anywhere els,” Tyrner explained. “So many people are in this [thinking] what are we going to do? What is this going to do for us? And they won’t talk to anyone. And you cannot get through on their customer service number.”
As of the end of last year, SVB had roughly $209 billion in total assets with around $175.4 billion in total deposits, the FDIC disclosed. But the amount of deposits above insurance limits as of Friday has still not been determined.News Source: Fox Business