Rising interest rates by Fed meant staying put with your cash in SVB was worse than government bonds.
Collapsing an institution down takes hours - not days. Startup founders moved at internet speed to force the run.
In retrospect, I ask could we have moved faster? should we have diversified our banking partners. Hindsight is always 2020. For those without a pre-existing account and not in US at that time, the best they could do was initiate a wire - but to where? We got the be aware of something being amiss when someone shared this in a startup founders group we were a part of.
Thursday [It starts] 9PM IST
There was no clear line of action or advice at that point in time. A large number of cross-border startups (Indo-US corridor SaaS) happen to bank with SVB. SVB’s own books don’t seem to be very worrisome as per their public filings - showing liquidity is there. Asks by early stage founders - should we look for alternatives at this point in time for our bank?
Larger teams with more capital and dedicated in-house CFO’s already seemed to bank with larger banks like Chase / MS and park capital. But so far nothing significant in the newswire to say we should act now.
[10:30 PM IST] Remember this time, it’s cutoff time for wires for the day. This will come back later
Friday
[Update] 1:15 AM IST - Webinar by SVB - update
Confidence seems low, bank still seems to be in process of raising.
Founders are now thinking of moving from SVB → wells / others. For folks with loans / debt move is unlikely because of pre-conditions.
[Update] 4:55 AM IST - $300mn withdrawn via checks in person. Do you have someone in the US who can visit a branch in person? This could be a way to get out.
[Update] 10:15 PM IST - FDIC announces take over. None of the wires which were done past cut-off from previous day were processed.