Silicon Valley Bank collapse and its impact on America’s tech industry
What are the repercussions of Silicon Valley Bank collapse on startups and tech industry? What can we learn from the facts known until now?
Silicon Valley Bank suffered a “Bank Stampede”, which resulted on an intervention by the government to protect savers and avoid financial system crisis around America. This bank was created around 40 years ago by a group led by a Stanford professor who identified the students’ difficulties, to finance their business ideas. He specialized in financing innovative companies, for which he had a client portfolio focused on startups.
The Silicon Valley crumble down denotes important challenges for startups, not only on immediate operative matters due to the access restriction to the funds (that probably will be recovered in a good measure after the government intervention), but for what it entails to entrepreneurs losing a specialized ally that understand the entrepreneurship business model and who provides them with financial support according to their needs.
Hemant Taneja, CEO & Managing Director of General Catalyst, a firm of venture capital (risk quality investment), declared that this bank understood the ecosystem and had the entrepreneurs and venture capital firms’ trust.
There is no doubt that besides the bank crisis that may or may not develop by this episode, the startup ecosystem has suffered a significant loss after the bank’s fall. Every entrepreneurship must be prepared to adapt against possible changes, as much as the market participants as in the regulations that may originate from the crisis.
If you own an entrepreneurship and you see your capacity to raise capital affected, we recommend you adapt your model as much as possible to the traditional banking. Especially if you already have operations, your best ally will be having an accounting system such as QuickBooks, FreshBooks or Xero, that will allow you to organize your information, that way you can be able to opt for financial solutions.
At Smartkeep we have accompanied hundreds of entrepreneurs and companies, during the process of organizing their information, implementing accounting systems, and generating reports when needed, to look for allies in matters of loans as much as in matter of investments. On that note, we are one call away to accompany you during this process.