Alum and MC Community –

The collapse of SVB on Friday and its after-effects are significant and will continue to be revealed over the coming days, weeks, and even months. We have tremendous respect and compassion for our friends and colleagues at SVB and empathy for organizations and individuals that have been impacted in ways direct and indirect:

• Direct impact. For the significant number of organizations directly and immediately impacted by SVB’s collapse, access to cash to support payroll and asset recovery is an urgent and existential priority. This includes many of our startup alums but also many of our nonprofit community partners. We applaud the government’s action to backstop depositors at SVB and to make funds available today. We are not alone in hoping this reduces the immediate “apocalypse” predicated within the startup ecosystem.

• Indirect impact. SVB’s collapse has sent swift ripples across the banking sector. Fear breeds fear and contributes to the risk of contagion, specifically for regional banks. This has and will continue to create acute uncertainty and the drive to take action to reduce risk and exposure. It has been a harrowing weekend for many as we navigate options for diversifying risk and prepare for the worst without contributing to the swirl.

• Long-term Impact: SVB has been a critical accelerant within the startup ecosystem – enabling community, banking startups, and supporting the flow of capital. While the startup and venture ecosystem is undoubtedly larger than one organization, it is hard to imagine that the disappearance of SVB will not exacerbate the pullback of funding and resources we have experienced over the last 12 months. This is worrying. 

It is also important to emphasize how crises like this shine a bright light on the importance of access to success much less survival – access to experts, advisors, alternative forms of capital, senior bankers, and experienced peers. Did you get funds out of SVB in time? Did you get an alternative line of credit in place? Should you move cash to T-bills or a sweep account to reduce the risk of loss? For first-time founders, for founders who don’t have a personal MBA network or haven’t raised capital and don’t have an experienced VC to call – getting information, much less good advice, to make financially material decisions in hours is hard to impossible. As we aspire to democratize access to entrepreneurship, moments like these matter. And the mobilization of resources, knowledge, support to provide access at scale is necessary and does make a difference.

Alongside our peers across the startup ecosystem, we have mobilized over the weekend to connect with our alums, aggregate and update resources, and share information rapidly. Please reach out to us for available resources or to speak with someone at MassChallenge. Myself and our team are available as we all continue to navigate what comes next.

Update: SVB is back in business and ready to serve the startup community again as a new entity called Silicon Valley Bank N.A. with a new experienced CEO and management team in place.