In 2016, I started a New York-based creative agency that specialized in branded content. Among creative agencies, the trend at the time was for names that sounded like punk bands and I unfortunately chose The Insurrection. As of last week the only thing that aged worse than the name was my choice of bank: Silicon Valley Bank, which has now become the most spectacular example of a bank failure since the 2008 financial crisis. (I briefly lost access to our company’s funds, but I’m fine; my deposits were low enough to be covered by F.D.I.C. guarantees.)
There’s plenty to say about how the bank brought this about — making risky investments, issuing communications that did more to alarm than explain. But as I hit refresh on my account balance Monday morning, I was thinking of the high-prestige venture capitalists who herded start-ups like mine to S.V.B. They’re the reason the bank was so overloaded with risky clients, and they’re also the ones who panicked at the first rumors of trouble — and advised their portfolio companies to flee, initiating the bank run that brought the whole thing tumbling down.
On Saturday, an entrepreneur named Alexander Torrenegra, who was an S.B.V. depositor for two companies as well as his own personal accounts, explained what happened on Twitter. “Thursday, 9 AM: in one chat with 200+ tech founders (most in the Bay Area), questions about SVB start to show up.” he wrote. “10 AM: some suggest getting the money out of SVB for safety. Only upside. No downside.”