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☆ Tech leaders remain oblivious to the true lessons of Silicon Valley Bank
▼ + stars: | 2023-03-19 | by ( Matt Turner | Dave Smith | ) www.businessinsider.com time to read: +4 min

On the agenda today:But first: Insider's Madeline Renbarger shares what happened at the SXSW Festival in Texas as tech founders and entrepreneurs learned about the implosion of Silicon Valley Bank. The festival began just as the FDIC announced it was taking control of Silicon Valley Bank to stop the catastrophic, social media-instigated bank run that was in full swing. Silicon Valley's blame gameiStock; Rebecca Zisser/InsiderIn the wake of Silicon Valley Bank's collapse, there's been plenty of finger-pointing but little self-reflection on the part of Silicon Valley, writes Insider's Linette Lopez. But in recent weeks, as companies like Meta and Twitter braced for tougher times ahead, the assault on middle managers has picked up new steam. But middle managers move the needle on a company's overall performance far more than senior executives do — and make a bigger difference to the bottom line.

Employees have been working around the clock to onboard as many startups as possible in the wake of the implosion of Silicon Valley Bank. Silicon Valley Bank, which had more than $175 billion in deposits and served nearly half of US VC-backed startups, was taken over by US regulators on March 10. "That said, I am worried that this bias towards a Big Four bank is a double-edged sword," Shekar added. "SVB did not think like a big bank. They could understand your operating plan when a big bank would balk at it," Ashley Tyrner, CEO and founder of FarmBoxRX, told Insider.

☆ Where is Silicon Valley's J. Pierpont Morgan?
▼ + stars: | 2023-03-17 | by ( Anita Ramaswamy | ) www.reuters.com time to read: +3 min

After withdrawals lashed the banking system in 1907, financier J. Pierpont Morgan corraled his peers into using their own money to calm the crisis. The contrast with Silicon Valley – which is also embroiled in the ongoing firestorm – couldn’t be more stark. Startup and technology firms’ cash crunch precipitated the fall of Silicon Valley Bank and its parent SVB Financial (SIVB.O), which in turn sparked panic in the financial system. Silicon Valley is fragmented and built on an individualistic ethos. Real, toothsome regulation might force Silicon Valley’s great minds to realize how interconnected their ecosystem is.

☆ Banks borrowed a record $153 billion from the Fed as SVB's collapse rocked Wall Street
▼ + stars: | 2023-03-17 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +2 min

Banks rushed to borrow unprecedented amounts from the Federal Reserve's traditional backstop following SVB's collapse, new data shows. Lenders took up $153 billion from the Fed's discount window in the week to March 15, topping a previous high of $111 billion. Banks also borrowed $11.9 billion from the Fed's new emergency loan tool launched following SVB's downfall. The global banking system has come under pressure in the wake of Silicon Valley Bank's demise. The move followed a turbulent few days for the regional lender as fears of depositors pulling funds sparked a selloff in its share price following SVB's implosion.

WASHINGTON, March 16 (Reuters) - The U.S. banking system remains sound and Americans can feel confident that their deposits are safe, Treasury Secretary Janet Yellen said on Thursday, but she denied that emergency actions after two large bank failures mean that a blanket government guarantee now existed for all deposits. "I can reassure the members of the committee that our banking system is sound, and that Americans can feel confident that their deposits will be there when they need them," Yellen said. More than $9.2 trillion of U.S. bank deposits were uninsured at the end of last year, accounting for more than 40% of all deposits, according to U.S. central bank data. Those uninsured deposits are not distributed evenly across the country, FDIC data shows. She also noted the high level of uninsured deposits at Silicon Valley as an aggravating factor.

Greg Becker, who was the longtime CEO of Silicon Valley Bank, pictured last year. "Looks like Silicon Valley Bank is in some deep shit," Uncommon Capital general partner Jamie Quint tweeted. Startup founders scrambled to get their funds out of Silicon Valley Bank after its collapse. Andreessen Horowitz announced this week that it will continue banking with Silicon Valley Bank "for the foreseeable future" but is crafting a longer-term plan to diversify. Even so, he added, "I think we'd be supportive, as they stabilize, for them to be one of many partners that our founders bank with."

☆ 'Big Short' investor Danny Moses says the SVB crisis is speeding up the US economic slowdown
▼ + stars: | 2023-03-15 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +2 min

Danny Moses sees trouble ahead for the US economy following the shocking collapse of Silicon Valley Bank. "It just accelerated that slowdown because banks have to really to pull back in their activities," the "Big Short" investor said. Moses also called out regulators for bailing out SVB, saying that should make people "nervous." Higher rates encourage saving over spending, which typically pulls down asset prices, saps demand, and increases the risk of an economic slowdown. But according to Moses, regulators don't have a clue of what's in front of them.

Three days into his tenure as Silicon Valley Bank 's government-appointed CEO, Tim Mayopoulos has a message for his high-powered venture capital and startup clients: Bring your money back. "There is no safer place in the U.S. banking system to put your deposits," Mayopoulos said on the call, which CNBC attended and was first to report. SVB's former CEO and CFO are no longer employed by the bank, Mayopoulos said on the call. Customer feedback will be critical in determining the future of the bank, Mayopoulos said on the call. "There are other places that do venture debt, but Silicon Valley Bank was the 1,000-pound gorilla in the room," said Ami Kassar, CEO of the business lending consultant Multifunding.

☆ Leaked email: VC giant Andreessen Horowitz says it's sticking with SVB for now — but is setting up accounts at another bank too
▼ + stars: | 2023-03-15 | by ( Kali Hays | ) www.businessinsider.com time to read: +4 min

a16z said in an email it intends to keep banking with SVB, as the bank is "fully operational." The VC firm noted it is working on a "general diversification plan" and will find anther bank in the future. "We have been working closely with the new leadership at SVB (alongside our existing relationship managers) and are pleased to report that the bank is now fully operational," Andreessen Horowitz, commonly referred to as a16z, wrote. The regional bank was taken over by the government on Friday after a bank run. Most of that is not in cash stored in bank accounts but in other investments.

☆ The collapse of Silicon Valley Bank foreshadows a bigger reckoning for the tech industry
▼ + stars: | 2023-03-15 | by ( Linette Lopez | ) www.businessinsider.com time to read: +12 min

In the days since the stunning collapse of Silicon Valley Bank, I've seen the tech world point a lot of fingers. Silicon Valley Bank imploded in part because it was a repository for the riskiest behaviors of the industry it serviced. In spite of this reality, there has been little self-reflection on the part of the industry that was so closely tied to Silicon Valley Bank. Silicon Valley Bank thrived on these trends. But to grow at the breakneck speed of its clients, Silicon Valley Bank executives had to change things in Washington.

☆ AI Tech Like ChaptGPT, Bing, Bard Is a Bigger Threat Than Social Media
▼ + stars: | 2023-03-14 | by ( Hasan Chowdhury | ) www.businessinsider.com time to read: +13 min

Nowadays, the promise of social media as a unifying force for good has all but collapsed, and Zuckerberg is slashing thousands of jobs after his company's rocky pivot to the metaverse. Much like social media in 2012, the AI industry is standing on the precipice of immense change. And as Altman and his cohort charge ahead, AI could fundamentally reshape our economy and lives even more than social media. If social media helped expose the worst impulses of humanity on a mass scale, generative AI could be a turbocharger that accelerates the spread of our faults. Social media amplified society's issues, as Wooldridge puts it.

☆ When Silicon Valley Bank imploded it took a $70 billion loan portfolio with it. Competitors are already stepping in to fill the gap.
▼ + stars: | 2023-03-14 | by ( Darius Rafieyan | ) www.businessinsider.com time to read: +7 min

Silicon Valley Bank had more than $70 billion in credit lines on its books when it failed. He's one of many who now stand to benefit from the sudden disappearance of one of Silicon Valley's most reliable lenders. Venture debt, like a typical venture-capital investment, involves betting big on fledgling startups that may be far off from profitability. Another person in SVB's venture debt business said that employees are working hard to maintain "business as usual" so as to make SVB's loan portfolio more attractive to a potential buyer. An opportunity for the competitionNone of this has stopped other lenders from stepping up to try to win some of SVB's debt business.

☆ Biden vows new bank rules after SVB collapse, cites Trump rollback
▼ + stars: | 2023-03-13 | by ( Trevor Hunnicutt | ) www.reuters.com time to read: +4 min

"Americans can have confidence that the banking system is safe. The managers of the banks will be fired, Biden noted, and investors will lose money. Biden also promised new regulation after the biggest U.S. bank failure since the 2008 financial crisis. The U.S. Federal Deposit Insurance Corporation on Monday said it had transferred all Silicon Valley Bank (SIVB.O) deposits to a newly created bridge bank and that all depositors would have access to their money beginning Monday morning. Silicon Valley bank had $209 billion in assets at the end of last year.

☆ Factbox: Key elements of Fed's new US bank funding program
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +4 min

The Bank Term Funding Program (BTFP) will offer loans with maturities of up to a year to banks, savings associations, credit unions and other eligible depository institutions. Here are some key elements of the Fed's program:STRESS RELIEFThe Fed has raised rates from near zero a year ago to between 4.50-4.75% now to combat inflation that hit a 40-year high last year. The same collateral terms will also be available for loans drawn from the Fed's "discount window," its traditional lender-of-last-resort facility. Ordinarily, loan amounts were governed by the market value of the pledged collateral. In fact, the Fed loans are made with "recourse beyond the pledged collateral," which takes into account the fact that the collateral may be impaired.

☆ Silicon Valley's 'greed and avarice' have 'finally come home to roost' in SVB collapse, trader says
▼ + stars: | 2023-03-13 | by ( Natasha Turak | ) www.cnbc.com time to read: +2 min

That news sent its stock price plunging and triggered a panic-induced wave of withdrawals from VCs and other depositors. Within a day, SVB stock had tanked 60% and led to a loss of more than $80 billion in bank shares globally. Some argue that the bank's downfall was due to its leaders' greed for yield: its holdings were disproportionately exposed to long-term interest rates, which are at a 15-year high in an effort to bring down inflation. The increased rates hit the value of SVB's securities, which subsequently damaged depositors' confidence. So, to me, it's the system that's broken, or at least needs to be seriously reviewed here."

Friday's dramatic failure of the bank, which focuses on tech startups, was the biggest since the 2008 financial crisis. Even small startups are getting in on the action to help others. Aleem Mawani, founder of Streak, a company with about 30 employees, tweeted Friday he would lend his personal cash free of any terms to other small startups worried about paying staff. Some, including Lowercarbon Capital, have offered loans to portfolio companies that have funds stuck at SVB. Gurson estimated "conservatively" that Altman has given more than $1 million to support other startups in similar need.

☆ Venture capitalists are blaming each other for triggering the disastrous collapse of Silicon Valley Bank
▼ + stars: | 2023-03-11 | by ( Jordan Hart | ) www.businessinsider.com time to read: +3 min

The collapse of Silicon Valley Bank has sent shockwaves through the tech industry. The failure of Silicon Valley Bank sent startup founders reeling on Friday as many lost access to their funds. In the wake of the abrupt collapse, venture capitalists are blaming each other for playing a role in the largest bank failure since the 2008 financial crisis. Ultimately, that's exactly what happened, Mark Suster, a manager partner at Upfront Ventures, told Insider on Friday. "This emergency was not helped by investors going into a frenzy and orchestrating a bank run," she told Insider.

After a bank run of $42 billion in withdrawals, Silicon Valley Bank was shut down by regulators on Friday. The founders were banking at Silicon Valley Bank and wanted to switch banks immediately after being told by their venture investors that the bank was suffering from "liquidity issues." The go-to bank of Silicon ValleySilicon Valley Bank has been a pillar of the startup of ecosystem for four decades, acting as the go-to financial institution for VC fundraising and building strong ties with founders and investors alike. This helped bolster SVB's reputation as the go-to bank of Silicon Valley in the good times, but exacerbated the crisis when it hit Thursday and Friday. "If you're given responsibility to run this iconic Silicon Valley company, you need some humility."

☆ The implosion of Silicon Valley's largest bank has investors worried worse is to come: 'There might be some kind of crack in the financial system'
▼ + stars: | 2023-03-10 | by ( Hasan Chowdhury | James Dean | ) www.businessinsider.com time to read: +5 min

The implosion of the California lenders Silicon Valley Bank and Silvergate has investors worried. Christopher Whalen, the chairman of Whalen Global Advisors, a financial consultancy, said Silicon Valley Bank was "just the tip of the iceberg." He added that the situation at Silicon Valley Bank was "a reminder that many institutions are sitting on large unrealized losses" on bond holdings. Mould said the "fire sale" of Silicon Valley Bank's bond portfolio raised broader concerns. Silicon Valley Bank CEO Greg Becker on Thursday implored customers to "stay calm" in an apparent bid to stave off further mass withdrawals and avert collapse.

☆ Elon Musk's dream of producing 20 million Teslas per year hangs on whether or not it can pull off a major shift in battery tech
▼ + stars: | 2023-03-08 | by ( Hasan Chowdhury | Asia Martin | ) www.businessinsider.com time to read: +7 min

Tesla wants to make lower cost electric vehicles, as a key part of its plan to fend off challenger. Still, given Tesla's delivery of roughly 1.3 million vehicles last year, it clearly has a long way to go to hit Musk's goal. The growing portion of Tesla's LFP vehicles have, in part, been the result of a deal it struck with Chinese battery supplier CATL in 2020. Tesla and the rush for lithiumA lack of supply chain controls hinders efforts to produce low-cost EVs. The company started to take steps towards taking control of lithium supply into its own hands.

☆ How two high schoolers from Denmark built an NFT marketplace and secured funding through a DAO backed by Bessemer Venture Partners
▼ + stars: | 2023-02-22 | by ( April Joyner | ) www.businessinsider.com time to read: +4 min

Bessemer Venture Partners has invested in the NFT marketplace OWND, which it found through its DAO. Better yet, this DAO had the backing of one of Silicon Valley's blue-chip venture firms, Bessemer Venture Partners. Bach Ryhl read all the crypto-related articles he could find on Medium and took a Web3 course on Udemy. Lunau Liechti, in particular, had been following the efforts of brands such as Nike and LVMH to launch NFT versions of their physical products. "We want to make it as easy to buy a Nike NFT as it is to buy a Nike sneaker online," Lunau Liechti said.

☆ Meta's and Twitter's subscription plans show they care more about money than free speech
▼ + stars: | 2023-02-20 | by ( Hasan Chowdhury | ) www.businessinsider.com time to read: +6 min

On Sunday, Mark Zuckerberg – still stinging from his botched metaverse launch – unveiled Meta Verified, a new subscription service costing $12 on web and $15 on iOS and Android. The timing of the launches of Meta's and Twitter's subscription services seems to be no coincidence, then: They're introducing paid-for services at a time when they're being squeezed of digital ad revenue. Meta says its new subscription service is primarily for content creators, but this feels disingenuous because everyone on its service is, in effect, a "content creator." Charging for it illustrates a clear misunderstanding Zuckerberg has of Facebook and its users: Facebook is responsible for vetting who gets access to its platform, not users themselves. Just 0.2% of Twitter users in the US had signed up for Twitter Blue, Musk's subscription service, by the end of January.

☆ Salesforce, activist investor Elliott may soon reach deal - sources
▼ + stars: | 2023-02-17 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +2 min

Feb 17 (Reuters) - Cloud-based software firm Salesforce Inc (CRM.N) and activist investor Elliott Management Corp are in discussions to reach an agreement that may end a possible board challenge, according to two people familiar with the matter. The battle at Salesforce has pitted Elliott as well as other activist investors against Marc Benioff, one of Silicon Valley's most iconic chief executives. Salesforce's growth has slowed dramatically in recent quarters and last month the company said it would cut 10% of jobs to address its performance. Representatives for Salesforce and Elliott declined to comment. Elliott too has long invested in technology companies and in the past reached settlements for board seats with companies including Pinterest (PINS.N), Twitter and eBay (EBAY.O).

☆ Sam Altman is tech’s next household name — if we survive the killer robots
▼ + stars: | 2023-02-17 | by ( David Ingram | ) www.cnbc.com time to read: +11 min

Sam Altman, CEO of OpenAI, walks from lunch during the Allen & Company Sun Valley Conference on July 6, 2022, in Sun Valley, Idaho. Sam Altman may be tech's next household name, but many Americans probably haven't heard of him. To anyone outside San Francisco, Altman would probably seem like just another young tech CEO. That worldview flared up into controversy in 2017 when Altman wrote a blog post criticizing political correctness, saying tech entrepreneurs were leaving San Francisco over it. "I realized I felt more comfortable discussing controversial ideas in Beijing than in San Francisco," he wrote.

☆ Microsoft and Google will duke it out over Silicon Valley's true financial driver: ads
▼ + stars: | 2023-02-09 | by ( Hasan Chowdhury | ) www.businessinsider.com time to read: +5 min

Google search dominated, but Microsoft's AI-powered Bing is emerging as a credible challenger. Google has dominated search and the search ad market for the almost 25 years since its inception. The company has around 90% of the search market, according to data firm Stat Counter. Microsoft's share of the search ad market is small: it made nearly $18 billion in ad revenue last year, far smaller than the $224 billion Google made in gross ad revenue last year, the analysts wrote. Declining ads market will spark fiercer competitionThe fight coincides with a slump in ad sales, upping the pressure on Google is the dominant player.

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