Rarely has our community felt so interconnected as when we all heard the news about Silicon Valley Bank on Thursday and throughout the weekend.
- Entrepreneurs rushed to assist others job creators.
- Startups offered their assistance to those impacted.
- Financial institutions stepped in with generous terms to help companies make payroll.
- Larger companies gave advice to those struggling to make sense of the whole thing.
It was awesome to watch the community come together in many ways. Still, many of us were left wondering how something of this magnitude could happen to such a bulwark of the venture capital community. Much blame was bandied about, with everyone from the Fed to the overvaluation rampant in SV taking the heat for the run on the bank.
Today, cooler heads are prevailing. The FDIC release has calmed much of the chaos, but like the proverbial truth attempting to get its shoes on, it may be a moment before everyone reads, digests, and understands what this means for THEIR company, THEIR balance sheet, and THEIR client community.
Red Branch Media is no different. As a small company that has virtually NO debt, and who (thanks to an exceptional CFO Jeremy Hogan) has a multitude of funding sources and diversified accounts, we have little direct exposure from this cautionary tale. However, we know larger companies, with bigger balance sheets, and larger payrolls may be facing some uncertainty now.
Because so many of our clients do the amazing work of putting people to work, we want to stay as close to what’s developing as possible. Our strong presence in Fintech, HRTech and the Workforce startup community has compelled us to ensure we are providing the support, information and encouragement needed to get through this scary (but seemingly manageable at the moment) situation.
We want to assure our clients we’re doing everything we can to support your marketing and sales efforts now. At RBM, our clients are more than just account receivables but true partners, many of our customers, have worked with us for over a decade. Here is what we know:
- Silicon Valley Bank is officially closed.
- A bridge bank has been created with the former head of Fannie Mae named CEO
- Depositors will have full access to their money beginning this morning when Silicon Valley Bank, N.A., the bridge bank, opens and resumes normal banking hours and activities, including online banking.
- Depositors and borrowers will automatically become customers of Silicon Valley Bank, N.A., and will have customer service and access to their funds by ATM, debit cards, and writing checks in the same manner as before.
- Silicon Valley Bank’s official checks will continue to clear.
- Loan customers should continue making loan payments as usual.
According to the FDIC press release:
“All depositors of the institution will be made whole. No losses associated with the resolution of Silicon Valley Bank will be borne by taxpayers. Shareholders and certain unsecured debt holders will not be protected. Senior management has also been removed.”
For some reason, this is encouraging to investors, who are betting the SVB shock will get the Fed to back off rate hikes, causing a lot of activity to jump in equities specifically. While this strength in equities may hold, others caution we should not assume this banking crisis is over. The kneejerk reaction to sell is causing impacts beyond the stock market.
Many companies use the volatility and vague inflation woes to lay off large swaths of employees and replace them with contractors, which in turn, creates bigger and more long-term issues in the economy.
Red Branch Media, in our tiny corner of the melee, will continue to do what we’ve always done and that which has kept us in steady, stable growth and job creator mode for almost 15 years (through at least 3 of the crappiest market events of my generation), which is not to panic, continue to employ smart people who do great work, supporting our clients.
We refuse to allow market events being manipulated at some of the highest levels by individuals and companies far richer than us to impact our solid as a rock business model, and incremental and continuous path forward.
If you are a current client and would like to discuss how we can assist with your communication efforts during this time, please email me personally at email@example.com. If you are in need of business strategy, including marketing, sales, product development, or analysis, please reach out and we will get a call on the books.
While what our small (but mighty) company does during this would-be crisis is of no import in the larger scheme of things, it is my FIRM belief that if more companies and their leadership would step up and help those around them keep their heads, the business community would be in much better and less volatile shape.