Startup founders, venture capitalists and aspirational entrepreneurs descended on Austin on Friday for the annual South by Southwest conference as they do every year. But as the day wore on, a sense of fear and confusion began to take hold amid the usual energy and buzz in the Texas capital.
Silicon Valley Bank (SVB), a financial institution that had become the go-to bank for nearly half of all venture-backed tech startups and many in the healthcare sector, was collapsing. Major venture capital firms and startup incubators including Y Combinator and Founders Fund had advised their founders to reduce exposure to SVB. The industry began to panic.
