SVB collapse made me 'physically ill' says entrepreneur
Tech entrepreneurs from both sides of the Atlantic have spoken out about the stress they've been under...
following the collapse of Silicon Valley Bank - a key lender in the start-up community - and New York's Signature Bank.
"In the moment it definitely it was making me physically ill just, you know, trying to get through it."
Doktor Gurson is the CEO and co-founder of Rad AI - a radiology start-up helping to improve patient care.
"I mean, not knowing whether or not the company you've spent five years building was going to go away overnight as a result of something, as I think, sort of unpredictable as a collapse of a bank was really hard."
Gurson says his company employs 65 people and has been growing 200% year on year,
but the crisis left him worrying about how he would make payroll.
"..that's the other crazy thing: the company could not be doing better, but somehow this was going to effectively put us out of business overnight."
He ended up reaching out to Sam Altman - the CEO of Open AI - who agreed to bail him out, out of his own pocket.
"I thought I'd just e-mail him and just say, "Hey, here's how much we're short on payroll. If there's anything you could do to help, you know, we'd greatly appreciate it. And you know, I was, I was very touched. He just emailed back within a few hours and said, you know, kind of, ‘Happy to help. Just pay me back when the funds free up.’
Across the pond.... entrepreneur Toby Mather feared his education platform, Lingumi, would not survive the crisis.
Up to 85% of its capital is tied up in Silicon Valley Bank.
"..When you're a small start-up, especially early on, you don't have the team resources to balance your cash across multiple banking products and the one part of a start-up that you expect not to go wrong is a bank. We take a lot of risks as entrepreneurs, but we expect our banks to be stable."
A deal has been struck for HSBC to acquire the UK arm of SVB...
following a weekend of crisis talks with the Bank of England and government ministers.
Mather is relieved not just for him, but for the industry as a whole.
"If they hadn't stepped in, there would have been a first order effect on hundreds of UK start ups and possibly US start-ups immediately collapsing, unable to pay their wage bills and their suppliers. But there also would have been a critical second order effect, which is that, you know, the next ARM, the next Deliveroo, the next start up using AI to try and cure cancer would have lost access to the money that they rely on for research and development."
Friday's collapse of Silicon Valley Bank was the largest banking failure since the 2008 financial crisis.