When Silicon Valley Bank failed in a whirlwind on Friday, startup founders who had funds in the bank were left wondering what will happen to the money they thought was safe. And for some, the fate of those funds could mean whether or not they’ll be able to continue paying their employees.
SVB, one of the most prolific lenders and banking institutions catering to a large swath of the startup and venture community, was closed by a regulator around midday New York time on Friday after customers sought to take out funds from the bank in a hectic roughly 48 hour bank run. SVB was taken over by the Federal Deposit Insurance Corporation as its receiver, and while insured deposits—those $250,000 and under—will be available for depositors on Monday, per an FDIC press release, the big question for the startups who banked with SVB is, what happens to the funds over that limit?
