Silicon Valley Bank failed on Friday after it couldn't find a buyer, with the Federal Deposit Insurance Corp. taking over its assets and liabilities, sending shivers through the startup world.
The failure came after a tense period during which many of SVB's customers fled as the bank frantically tried to raise capital to remain solvent, but failed. Bankers tried to orchestrate a potential sale of SVB, according to a person familiar with the matter, though it was a longshot for a suitor to emerge to buy a troubled institution whose shareholders and customers were heading for the exits. The process quickly unraveled.
SVB's failure leaves many questions across Silicon Valley unanswered, ranging from what happens at startups who banked with SVB to what bank or banks might pick up the pieces. “How do I cover payroll?” one startup founder asked an FDIC representative outside an SVB branch in Palo Alto.
