A eulogy for Silicon Valley Bank, a business partner to tech for 40 years, which offered services when established banks would not and was undone by its loyalty
Regardless of the reasons behind the bank's collapse, it leaves a huge hole for the start-up scene — The writer is a partner at Sequoia Capital
Financial TimesMichael Moritz
Context & Ripple Effects
The eulogy closes out a week that began with Silicon Valley Bank's collapse from interest-rate exposure and undiversified depositors — a failure the bank's own history foreshadowed when its 2015 surge into startup lending was already flagged as rising-risk concentration (risky-loan warnings). The FT piece, written by a Sequoia partner, frames the bank not just as a casualty but as a service provider that did what established banks refused: banking startups nobody else would touch.
Startups lose their dedicated banking counterparty overnight — the venture-debt lines, founder-friendly services, and payroll rails established banks never offered them, forcing an immediate migration of deposits to generalist banks.
Second-order effects
Big universal banks inherit the startup-banking niche SVB built, but the crisis also re-ranked VC reputations: solo investors and small firms stepped up during the freeze while many large firms visibly disappointed, shifting founders' trust at the margin.
Third-order effects
SVB demonstrates specialist-absorption risk: a bank serving one concentrated industry absorbed that industry's correlated fate, so if the pattern holds, startup finance consolidates inside diversified giants — trading sector empathy for balance-sheet durability.
The trend: Specialist financial infrastructure for tech is being absorbed by generalist institutions, as single-industry banks prove unable to survive their own clients' herd behavior.
This is the new culture war the techies will be fighting now “But the reality is that if S.V.B. was just a small regional bank that did not have ties to loud, politically connected venture capitalists and the tech community, it might have been allowed to die — and its... https://…
Essential reading from @huwsteenis on the failure of Silicon Valley Bank and the lessons of Paul Volcker and Continental Illinois. The big difference between now and 1984 is that by that time Volcker had won the fight against inflation. https://twitter.com/...
Leave to Mike Moritz to make the MPS example (he has a house in Tuscany so he knows the region well) SVB provided for tech when everyone else ignored us https://www.ft.com/...
This seems .... hmmm. In the first place, are we really meant to believe that JP Morgan refused to open bank accounts for start-up companies? In the second place, if the tech companies loved it so much and had such a great relationship why did they run? https://www.ft.com/...
Manager of venture capital firm that bankrolled Sam Bankman Fried's FTX and other crypto players now praises Silicon Valley Bank as an institution close to its roots and customers and laments its collapse https://www.ft.com/... https://twitter.com/...
“Small west coast technology companies were incomprehensible or insignificant to the large east coast banks whose customers included international airlines, heavy industry and nationwide retailers.” https://www.ft.com/...
Sequoia's Michael Moritz does a good job explaining how it was that a small community bank — not JPMorgan or Goldman Sachs — came to dominate one of the wealthiest corners on earth. https://www.ft.com/...
Some perspective. It certainly is going to impact the tech community. Access to capital is so important. SVB provided for tech when everyone else ignored us https://www.ft.com/...