The Collapse of Silicon Valley Bank
                     THE COLLAPSE OF SILICON 
VALLEY BANK
WHAT IS SILICON VALLEY 
BANK?
SVB was founded in 1983 and was the 16th 
largest U.S. bank before its collapse. They 
specialized in financing and banking for 
venture capital-backed startup companies -- 
mostly technology companies. Venture 
capital firms did business there as well as 
several tech executives.
Source: www.techtarget.com
WHY WAS SVB 
IMPORTANT TO THE TECH 
SECTOR?
SVB provided financing for about half of all 
U.S. venture-backed technology and 
healthcare companies. SVB was a preferred 
bank for the tech sector because they 
supported startup companies that not all 
banks would accept due to higher risks.
Source: www.techtarget.com
PANDEMIC
The pandemic in 2020 was a hot market for 
tech companies as consumers spent big 
money on digital services and electronics. 
Tech companies had a large influx of cash, 
and SVB's services were needed during this 
time to hold their cash for business 
expenses, such as payroll. The bank 
invested much of these deposits as banks 
typically do.
Source: www.techtarget.com
WHY DID IT COLLAPSE?
The collapse happened for multiple reasons, 
including a lack of diversification and a 
classic bank run, where many customers 
withdrew their deposits simultaneously due 
to fears of the bank's solvency. Many of 
SVB's depositors were startup companies. 
Source: www.techtarget.com
LACK OF 
DIVERSIFICATION
Silicon Valley Bank invested a large amount 
of bank deposits in long-term U.S. treasuries 
and agency mortgage-backed securities. 
However, bonds and treasury values fall 
when interest rates increase.
Source: www.techtarget.com
BANK RUN
When SVB announced their $1.75 billion 
capital raising on March 8, people became 
alarmed the bank was short on capital. Word 
spread quickly on social media accounts 
such as Twitter and WhatsApp inducing 
panic that the bank didn’t have enough 
funds. 
Source: www.techtarget.com
WHO IS AFFECTED BY 
THE COLLAPSE?
SVB stockholders and investors took a big 
hit because, unlike customers, they were not 
backed by FDIC on their investment.
Other issues include a lack of money from 
deposits for immediate expenses such as 
payroll. Large tech companies with 
significant cash in SVB include Etsy, Roblox, 
Rocket Labs and Roku.
Source: www.techtarget.com
FIRST CITIZENS BANK 
PURCHASES SILICON VALLEY 
BANK
On March 26, 2023, FDIC announced First 
Citizens Bank will purchase Silicon Valley 
Bank and assume the majority of its 
deposits and loans. As of March 10, Silicon 
Valley Bank reported nearly $167 billion in 
total assets and $199 billion in deposits. 
Source: www.techtarget.com
MORE BANK ISSUES
In addition to Silicon Valley Bank, other 
banks were facing solvency issues such as 
Signature Bank and Credit Suisse. UBS 
agreed to buyout Credit Suisse for $3 billion 
Swiss francs (or $3.25 billion) in a 
government-brokered deal on March 19.
Source: www.techtarget.com
THANK YOU