Silicon Valley Bank (SVB for short) went bankrupt overnight, and the cloud of technology investors and entrepreneurs shrouded. "Unexpectedly, when I woke up, I unexpectedly caught up with the bank bankruptcy and my life was complete." Andy (alias), the founder of China's medical start-up, sent a WeChat circle of friends at noon on March 11. Most of his company's US dollar assets are deposited in Silicon Valley Bank, mainly used for the salary payment of American office staff. Another insider told reporters about the negative impact of the Silicon Valley banking incident that some start-ups lost hundreds of millions of yuan. The CEO of Y Combinator, a famous American startup incubator, called the consequences of Silicon Valley Bank "the extinction of start-ups". He said that more than 1000 start-ups in 1/3 of YC's projects had all their money in Silicon Valley Bank, and could not even pay wages and rent next week, while the upper limit for insurance companies to settle claims was $250000. Zhuang Minghao, an Internet investor, said that if we can say that in the past 20 years, the explosion of Internet+VC complementing each other has created Silicon Valley, this effect has also created SVB, a special "bank". Today, the grand narrative of the entire Internet has gone, and the so-called Internet plus+Silicon Valley rich myth has begun to become history. A wave of venture capital and start-up companies were affected. "I didn't expect that even SVB would encounter a financial credit crisis, which is the preferred bank of deposit for most investment institutions and start-up companies." An entrepreneur in the field of technology sighed. Silicon Valley Bank, founded in the United States in 1983, was once regarded as the "gold owner" and "lifeblood" of start-up companies. At the time of the rapid development of Silicon Valley's high-tech industry, it quickly opened up a flexible development path by virtue of low-interest fund-raising and targeting small and medium-sized enterprises that big banks have not yet attached importance to, and successfully helped star enterprises such as Facebook and Twitter. Zhan Yijian, a partner of appWorks and with many years of fundraising experience, concluded that the key reason why Silicon Valley Bank can hold nearly half of the market share of start-ups is that its core product, risk bonds, can help entrepreneurs reduce equity dilution and help investors reduce cash flow risk. As long as the company's growth and profitability are higher than the cost of capital, it can actually achieve a win-win situation for investors, start-ups and risk bond issuers. In order to enable the invested companies to obtain the risk debt limit, Zhan Yijian said that many venture capital institutions would require the invested companies to open accounts at SVB as soon as possible, accumulate transaction records and financial information, and deposit the investment funds in this account, reducing the exchange costs and processing time. Since then, with the trust and dependence of established or large startups on SVB, almost all startups that want to obtain investment in Silicon Valley or have been invested in have SVB accounts. "We use Silicon Valley Bank because of its good service and convenience," Andy told the First Financial News. However, such characteristics make Silicon Valley banks particularly sensitive to the boom and bust cycles of the industry. Today, an old story that Meituan had exposed more than 60 million dollars in bank deposits in Silicon Valley was brought up again. It is said that Wang Xing, the founder of Meituan, has responded today that "we have many
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：YiCai Net
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