Josh Butler, chief executive of CompScience, a workplace security analytics startup, said he was unable to get his company’s money out of the bank on Thursday or before the bank collapsed on Friday. The last day, he said, he had been stressful.
“Everyone from my investors to employees to my own mother is reaching out to ask what’s going on,” Butler said. “The big question is how soon will we be able to access the rest of the funds, how much, if at all? That is absolutely terrifying.”
CompScience was pausing spending on marketing, sales, and recruiting until it resolved more pressing concerns, such as payroll. Butler said he was prepared for a big meltdown, given the pessimism swirling around the industry.
But “did you expect it to be Silicon Valley Bank?” he said. “Never.”
Camp, a startup that sells gifts and experiences for children, added a banner to its website Friday that read: “OUR BANK JUST CLOSED SO EVERYTHING IS FOR SALE!”
The site offered a 40 percent discount using the promo code “bankrun” along with a meme that included the words “never liked the bay area” and “how could this happen.” A representative for Camp said the sale was related to the collapse of Silicon Valley Bank and declined to comment further.
Sheel Mohnot, an investor at Better Tomorrow Ventures, said his venture firm on Thursday advised its startups to transfer money into Treasury bonds and open other bank accounts out of prudence.
“Once a bank run has started, it’s hard to stop it,” he said.
Some of the startups Mohnot’s firm has invested in chose not to move their money, while others were unable to act in time before the bank failed, he said. Now his biggest concern was doing payroll, followed by figuring out how to pay his bills, he said.
