Technology start-ups are scrambling to deal with tighter regulation and the influence of larger banks that are set to replace the informal financial relationships and close personal connections that have characterised Silicon Valley Bank’s dealings with the sector.
Young tech companies, which account for a large part of SVB’s deposits, were making plans to take cash out of the bank this week, despite moves late on Sunday to protect depositors and keep at least some of its operations going. HSBC agreed to take over the bank’s UK arm and regulators in Washington were making a renewed effort to find a buyer for the US operations.
As entrepreneurs assessed the damage caused to the tech scene by the collapse of SVB over recent days, a first step was a rush to move cash and avoid being reliant on a single bank again.