Silicon Valley Bank's abrupt shutdown leaves venture capitalists and founders scrambling

Share on Facebook Share on Twitter Share on Linkedin Investors told Forbes they are now focusing on damage control, such as ensuring portfolio startups can make payroll with the bank's now-frozen uninsured deposits .

On Friday, Silicon Valley Bank's storied 40-year history came to an abrupt and ignominious end when regulators closed the bank and appointed the Federal Deposit Insurance Corporation as receiver. And for the startups and investors that SVB has funded and served as a bank - spanning the entire VC-backed ecosystem - it has raised new questions about when deposits and funding will be returned, if applicable.

For the US startup ecosystem, the news is an end-of-life moment that follows days of frantic communications and speculation that unfolded on Twitter, from corporate emails to founders and panel discussions of investors and entrepreneurs. In talks with more than 10 venture capitalists on Thursday and Friday, Forbes heard of a chaotic scene over the past few days since SVB revealed financial concerns and offered a plan action on Wednesday that scared many in the industry. (A call from SVB CEO Greg Becker to some companies on Thursday telling them to “keep calm,” meanwhile reportedly had the opposite effect.) Some companies, and their investors, have begun urging start-ups...