March 9, 2023, will be remembered as a sad day in Silicon Valley’s history. We have been through crises before—the Japan Inc. fears of the 1980s; the dot-com bubble during which my firm, General Catalyst, was founded; the global financial crisis of the late 2000s; the Covid-19 crisis we’re still getting over. But throughout all of these, we have never cannibalized our own quite like we did last week.
It’s hard to overstate the importance of Silicon Valley Bank to the tech and venture ecosystem. It was foundational in every possible way, making early and well-funded strategic bets on the next generational founders and entrepreneurs that would define the era of innovation most of us have lived in. At the time of its collapse, according to its own website, SVB banked around half of all U.S. venture-backed startups. Given the value those companies have created in terms of job and wealth creation, that is a stupefying statistic. SVB was the go-to resource for nascent businesses when more conservative banks were reluctant to work with them.