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What can we learn about the state of our broader tech economy from the SVB fallout?
In the wake of Silicon Valley Bank’s (SVB) recent collapse, entrepreneurial ecosystems across the United States and the globe scrambled to support their communities.
Although the level of engagement and action taken by stakeholders differed across communities, in most ecosystems information regarding next steps for founders to take was quickly disseminated.
In Philadelphia for example, Isabelle Kent, CEO at Philly Startup Leaders, provided general directions in a LinkedIn post to founders in her community uncertain on how to act.
Other ecosystems compiled lists of both local and national resources for members of their communities impacted by SVB’s collapse.
TEDCO, for example, released this guide of educational and financial resources for Maryland businesses who were directly impacted. In our own backyard, UpSurge Baltimore compiled this resource database for Baltimore businesses looking for help navigating through the uncertainty.
Up north, the New England Venture Capital Association released a list of resources for founders and funders in the region who were impacted.
The list includes educational information on what occurred, a list of contacts at alternative banks in the community, a series of recommended actionable steps for founders, and information regarding webinars and other external resources that stakeholders may find helpful.
Boston Mayor Michelle Wu and her team released a survey to better understand who was impacted by the closure and to ensure that they receive the help they need. In addition, Boston based ESO MassChallenge urged anyone looking for resources or help to contact them.
Some communities went a step further and took immediate action to help businesses affected within their ecosystem.
In response to the chaos, Governor Phil Murphy announced that the New Jersey Economic Development Authority (NJEDA) would be launching a series of programs to provide emergency assistance to New Jersey-based companies banked by SVB.
Funded at $5 million, the New Jersey Entrepreneur Support Program offers a guarantee to support repayment of an investor loan advanced for working capital purposes and is designed to encourage investors to support businesses within their portfolios during this liquidity crisis when investor support is particularly crucial.
Support from communities wasn't just limited to geographical boundaries.
Dimitry Gershenson from ClimateTech lending firm Emerging Planet announced on Twitter that his firm, along with other key industry partners, were creating an emergency relief fund for climate entrepreneurs who banked with SVB.
While many ecosystems put together a geographic- or industry-specific resource guide, there were hundreds of national resource guides that appeared in the wake of the crisis, mostly in the form of Google Docs. Here are some that were particularly robust:
While these documents are helpful for immediately distributing information, they highlight the big challenges with using documents for resource sharing:
You also saw a number of companies jump into action. While some companies, took advantage of the market opportunity created, such as Novel Capital with their non-dilutive funding offerings, others mobilized to support their customers, such as HubSpot's Customer Relief Fund.
Although the collapse of SVB caused mass panic, there was also hope in the outpouring of support from ecosystem builders and founders alike
These responses provided a powerful testimony to the resilience and character of those who engage in this type of work, and serve as a reminder of the importance of community and collaboration in times of crisis.
Overall, while the collapse of SVB was undoubtedly a difficult and trying time for many, it also highlighted the strength of the global startup community, and provided testimony of the strength of the bonds that exist across entrepreneurial ecosystems.