BUSINESS + ECONOMY
Local start ups experience ‘whiplash’ of emotions with SVB collapse
Mar 13, 2023, 3:22 PM | Updated: Mar 15, 2023, 8:20 am
A Silicon Valley Bank sign is shown at the company's headquarters in Santa Clara, Calif., Friday, March 10, 2023. The Federal Deposit Insurance Corporation is seizing the assets of Silicon Valley Bank, marking the largest bank failure since Washington Mutual during the height of the 2008 financial crisis. The FDIC ordered the closure of Silicon Valley Bank and immediately took position of all deposits at the bank Friday. (AP Photo/Jeff Chiu)
(AP Photo/Jeff Chiu)
SALT LAKE CITY — Local tech companies have had a wild weekend dealing with the uncertainties of the Silicon Valley Bank collapse fallout.
The founder of one Utah early-stage start-up spent the weekend brainstorming how to keep her company afloat.
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“I felt betrayed, I felt angry, I felt sad, I felt devastated,” Donde CEO and co-founder Rilee Buttars said upon learning of SVB’s collapse. “It was this moment of like what emotion to I pick.”
Buttars said she went from thinking her company may not survive, to making contingency plans, to now feeling okay after the news that the Treasury Department, Federal Reserve and FDIC were going to make SVB depositors “100%” whole.
Donde is an early-stage start-up that offers travel as a benefit to companies. They had almost all their capital in SVB.
“[It’s been] oh my gosh whiplash,” Buttars said.
Local tech calls on federal delegation
Meanwhile, another local founder spent the weekend pushing Utah’s federal delegation to act quickly.
Utah-based start-up Artifact‘s founder, Nate Sanders rallied dozens of other Utah tech company leaders to send a letter to Utah’s federal delegation urging them to make depositors whole beyond their insured amount.
Sanders tweeted that beyond their operating costs, their company’s employees who have mortgages, car payments and childcare expenses were at risk of not getting paid.
Today, dozens of Utah founders worked to send a letter to our senators and congress members. It urges our elected officials to urgently move around policy that will ensure that SVB depositors receive 100% of their funds, and explained the severe impact that settling with only… https://t.co/MqfySz5jYH pic.twitter.com/Wa9DJIuBb3
— Nate Sanders 🍋🧤 (@nlsanders) March 12, 2023
Buttars credited those leaders Monday, specifically, Utah’s senators and Gov.Spencer Cox for speaking out and not making the issue political. She believed they were “for standing up and advocating for the small businesses that this hurt.”
Buttars said she’s also seen a lot of finger-pointing online. She said that for her company, it didn’t make sense to diversify their deposits, as some online have suggested companies should have done to protect themselves.
“I think people are naive to said ‘oh you should have known.’ No. No one did that. Diversification wasn’t common, especially with a bank like SVB. They had been around for 40 years, they were standard in the industry,” she said.
Though Buttars did said she will make some changes moving forward. Namely, making sure her deposits don’t exceed the amount of her FDIC insurance amount.
“Absolutely now we will now prepare.”
