What is Going on at SVB?

I have a unique perspective as a tech entrepreneur

So what is going on at SVB? There have been plenty of explanations of the financial mechanics and what triggered their sudden downfall, but let me explain practically what's happening. I raised venture money for my new startup and it's stored in SVB. I don't personally bank with them.

Here is what I know so far with some key information/ facts/ implications for you.

I spoke to about 50 Founders/GPs of funds/employees in the industry over the past 24 hours. I'm also on a group with 500 other Founders who appear to have been affected.

This is widespread. Roblox had 150M with SVB, Roku had 450M plus with SVB, and the list just goes on and on. I mention this because the notion that this is somehow contained to 'rich VCs' and 'Silicon Valley tech workers' is grossly mistaken and a terrible take. The name of the bank will politicize this issue somehow, but small startups running payroll to contractors who live all over the world will be unable to make more than one payroll at this point. Workers will be affected. At least 3 employers I know of missed payroll. Another Founder couldn't accept the venture money he raised because the VC couldn't wire it over....

The current belief on what is going to happen. The FDIC insured portion of the money will be available on Monday to everyone. This is good for small startups like mine with low burn because we can operate for months while it sorts itself out. Not so good for later stage startups with large cash burn who have to live week-to-week. A portion of the funds beyond the uninsured portion will be paid out as a dividend mid-next week.

Then what happens next...The broad-based belief at this point is that all the depositor money will be returned - it's a question of how . Either a buyer takes out SVB's assets over the weekend (they'd do that because they want to have access to the coveted startup/VC ecosystem). Or, the FDIC winds it down and sells it off for parts.

They will give back 100 percent because otherwise confidence could be lost in the banking system. Every small bank in America would have massive withdrawals if Washington doesn't have a plan ASAP. With outflows pouring into JP Morgan Chase and other large banks to retreat to safety. Systemic risk.

This to me is a bigger deal than '08 because of the interconnectedness of banking. Financial systems now all run on APIs. Your payroll is connected to your bank account which is also connected to all your invoicing systems. Stuff is breaking left and right. This will affect most Americans, and that's only going to become clear this coming week.... until there is a quick resolution.

Is this a bailout of the rich? No. Workers are affected. And the likely scenario of an asset purchase would require no 'bailout' beyond FDIC insured money.

I remain optimistic. I am not worried for my own business, and I am remaining calm/confident that we'll figure out something that works. that's a hallmark of being American.