The collapse of Silicon Valley Bank (SVB) in March left the startup world reeling.
The biggest lender to fail since the 2008 financial crisis, SVB had become the preferred funder of the startup, tech, and venture capital worlds. Its quick and sudden fall, as higher interest rates hit its investments and triggered a run on deposits, gave pause to startup investors and also holds lessons for founders going forward.
Harvard Business School faculty suggest some key takeaways for the startup ecosystem as the dust settles and as they look for future growth. Although the banking system has somewhat stabilized, First Republic’s weakness, which prompted a hasty sale to JPMorgan Chase, portends continued headwinds for startups seeking investors.
[This article was provided with permission from Harvard Business School Working Knowledge.]