What the SVB Events Taught Startups, VCs and Treasurers
The disruption around SVB sent ripples through the tech and venture ecosystem, forcing founders, investors and finance teams to rethink how they manage cash, banking relationships and liquidity risk. Beyond headlines, there are practical lessons that any organization holding meaningful balances should apply to reduce exposure and improve resilience.
Why the risk mattered
SVB’s situation highlighted two common vulnerabilities: concentration of uninsured deposits and interest-rate exposure from long-duration investments.
Many startups and funds kept most cash at a single institution and were unaware of how quickly withdrawals could cascade into solvency stress when a bank faces a liquidity crunch.
Meanwhile, banks that invest heavily in longer-term securities are sensitive to rising rates, because those holdings lose market value and become harder to liquidate without crystallizing losses.
Actionable steps for startups and small businesses
– Diversify deposit exposure: Spread operational balances across multiple banks and account types to stay within deposit insurance limits as much as possible. Consider using sweep accounts or multi-bank cash-management platforms that distribute funds automatically.
– Maintain liquid runway: Keep at least several months of payroll and operating expenses in highly liquid, low-risk instruments — instant-access accounts, ultra-short money market funds or Treasury bills via a trusted broker.
– Use cash-management tools: Treasury platforms, fintech cash hubs and brokered CDs can help allocate large balances while preserving accessibility.
Evaluate fees, counterparty risk and settlement timelines.
– Establish a treasury playbook: Define who can move funds, how approvals are handled during stressed conditions, and where emergency liquidity will be sourced. Conduct tabletop exercises so the team can act quickly under pressure.
– Monitor bank health beyond FDIC: Regularly review your bank partner’s public financials and analyst commentary, and maintain an open line to your relationship manager. Don’t assume deposits are automatically safe, especially above insured thresholds.
What VCs and accelerators should do
Venture firms often play the role of financial advisor to their portfolio companies.
Encourage portfolio treasurers to diversify deposits, and provide templated guidance for emergency banking transitions. Consider offering a list of multiple reputable banking partners and vetted cash-management vendors to reduce single-institution concentration across the portfolio.
What banks and regulators are focusing on
Regulators and bank boards have sharpened focus on liquidity planning, interest-rate risk management and stress testing. Expect continued emphasis on robust governance, more transparent communication during market stress, and prudential measures designed to improve resilience in the banking system. For customers, this should translate into clearer disclosures and more proactive guidance from banking partners.
Communication matters
One clear takeaway is the power of timely, transparent communication. When institutions, regulators and bank partners communicate clearly, it reduces panic and supports orderly resolution. For customers, documenting communication channels and escalation paths with banks ensures quicker responses when issues arise.
A practical mindset going forward
Market uncertainty will always exist, but exposures can be managed. Prioritize liquidity, diversify counterparties, adopt simple treasury safeguards, and rehearse emergency responses. These steps don’t eliminate risk, but they significantly reduce the likelihood that a single event disrupts your operations or growth trajectory.