Silicon Valley Bank collapse: extinction level event for startups, says YC president Garry Tan

Y Combinator, popularly known as YC, has been an early investor in firms like Stripe, Airbnb and others. Its portfolio firms work closely with the SVB which has now been taken over by the US government. Razorpay, Zepto, Meesho are among its biggest India portfolio firms.

“BIG TECH will not care about this. They have cash elsewhere. All little startups, tomorrow’s Google’s and Facebooks, will be extinguished if we don’t find a fix, ” Tan tweeted as the news broke about the faliure of SVB.

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“30% of YC companies exposed through SVB can’t make payroll in the next 30 days. If you or your company are affected, I recommend that you reach out to your local congressman to get this on their radar TODAY. Now,” Tan added in his tweet thread.

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He suggested startup founders and executives to reach out to the government seeking help from them.

“If you’re affected, here’s what I would say: Hi, I’m a constituent in your district. I work at X, a startup that has deposits with SVB, which was shut down this morning.. We won’t be able to make payroll and we are one of thousands of startups that would have to shut down or furlough workers NEXT WEEK.,” he tweeted citing it as an example.

“We need the FDIC’s help and the government’s help to make sure American tech industry is not set back by a decade, and we can save thousands of workers jobs, including mine.”

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Tan’s comments are of significance as it underscores the nature of the crisis unfolding amid startups in the Valley.

ET reported on Friday saying Indian SaaS firms were put on alert since the SVB stock started crashing earlier this week. Indian investors and founders have been trying to move out deposits from the bank to derisk themselves.

Also read | How Silicon Valley Bank served the tech industry and beyond