Y Combinator said that, a petition to the US government said that approximately 10,000 small businesses with accounts in Silicon Valley Bank may not be able to pay their employees in the next 30 days and that the collapse is anticipated to affect approximately 1 lakh jobs. In the petition that was sent to US Treasury Secretary Janet Yellen, it was mentioned that Silicon Valley Bank is the only account that a third of the startups in the Y Combinator community use.
By that metric, they are able to estimate that more than 10,000 new and small businesses will be impacted by a shutdown or furlough related to payroll. This will have an immediate effect of furlough, layoff, or shutdown, affecting over 100,000 jobs in the most vibrant sector of innovation in our economy if the typical small business or startup employs ten people.
The petition will be supported by more than 3,500 co-founders, CEOs, and more than 2 lakh employees of startups and small businesses, including PayO, SaveIN, and SalaryBook from India.
The NVCA says that Silicon Valley Bank has over 37,000 small businesses with deposits of more than $250,000. According to the FDIC website, these balances are currently unavailable to them, and without further intervention, they may not be accessible for months or years, the petition stated.
According to the petition, if they allow this to happen, it will immediately impact the US technology industry and its global competitiveness, and ultimately set back US competitiveness by a decade.
The National Venture Capital Association (NVCA) reports that Silicon Valley Bank has nearly 37,000 small businesses with deposits of more than $250,000. According to the FDIC website, these balances are currently unavailable to them, and without further intervention, they may not be accessible for months or years, the petition added.
Silicon Valley Bank’s disappointment has a genuine gamble of fundamental virus. The petition added that the collapse of the bank has already instilled fear among the founders and management teams to seek safer havens for their remaining cash, which could result in a bank run on every other smaller bank.