VC Firms Issue Statement of Support for Silicon Valley Bank

• More than 110 venture capital firms have signed a statement in support of Silicon Valley Bank.
• SVB was shut down by regulators on Friday after its losses on bond sales sparked a bank run.
• Some VCs at signatory firms have criticized investors who advised founders to pull funds from SVB.

Venture capital firms are expressing their support for the fallen Silicon Valley Bank, which US regulators shut down on Friday.

“Silicon Valley Bank has been a trusted and long-time partner to the venture capital industry and our founders,” a joint statement from more than 110 firms reads.

“In the event that SVB were to be purchased and appropriately capitalized, we would be strongly supportive and encourage our portfolio companies to resume their banking relationship with them,” it continues.

US regulators shut down SVB after a significant chunk of the bank’s customer base — including startups and venture capital firms — sought to withdraw funds in the wake of the bank’s plunging stock price, following its announcement that it had sold $21 billion in bond investments at a loss.

SVB served nearly half of all US venture-backed companies, according to its website, and its failure has had a resounding impact in the startup world. Some startups that held SVB accounts are now at risk of missing payroll for their employees.

Hemant Taneja, the CEO of the VC firm General Catalyst, which led the effort to organize support for SVB, tweeted the statement on Friday evening. Taneja said in his tweet that several VCs had met to discuss the effects of SVB’s failure on their industry. Alongside General Catalyst, 12 other firms signed the initial statement, including Accel, Greylock, Kleiner Perkins, Lightspeed Venture Partners, and Upfront Ventures.

“It is important to collaborate around a consistent approach that we hope can maintain business continuity for our companies and keep an important institution for the industry viable,” Taneja said in a statement to Insider. “Everyone understands that we have a role to play in trying to calm the situation. Panic wasn’t the way to handle it. It’s important to pause and think about all stakeholders before making decisions – this is core to our responsible innovation mindset.”

The number of signatories to the joint statement in support of SVB has grown to more than 110 firms, including Cowboy Ventures, Eniac Ventures, Floodgate, Khosla Ventures, Lux Capital, Primary, and SoftBank.

“Good to show strong cross firm support for the bank that has supported us for decades,” Nihal Mehta, the cofounder of Eniac Ventures, which signed the statement, told Insider.

The VC industry’s show of support for SVB is in marked contrast to the panic among investors and startups as SVB’s troubles became apparent. Some VC firms, including Founders Fund, Y Combinator, and Union Square Ventures, advised their portfolio companies to pull the bulk of their funds out of the bank.

Those reactions in turn drew rebukes from other VCs, especially following SVB’s implosion. Mark Suster, a partner at Upfront Ventures, and Brad Svrluga, the cofounder of Primary, whose firms signed the joint statement of support, publicly admonished their fellow investors.