Good morning, Broadsheet readers! General Motors is offering cash to employees who will quit, women in broadcasting give a nuanced look back at Barbara Walters' legacy, and female founders tell us how they are handling the Silicon Valley Bank collapse. Happy Equal Pay Day!
- 'There was no playbook.' The collapse of Silicon Valley Bank—the financial institution that housed the capital of much of the startup ecosystem—wreaked havoc over the weekend. Startup founders were unsure they could access their funds, employees were worried about their next paycheck, and even Etsy sellers were hit as the platform paused payouts. Three female founders told Fortune how they handled the chaos—which eased a bit Sunday, when regulators confirmed that they’d protect all deposits at the bank—and where they go from here.
A text from an investor on Thursday tipped Ariela Safira off to the crisis: Was her startup's money with SVB? Yes, it was.
The founder and CEO of mental health and wellness startup Real immediately asked her team to open new business accounts, but that couldn't be done online. She drove to First Republic Bank in Los Angeles to open a new account and tried to wire money to the bank, but SVB's site kept freezing. Next, she sped to SVB's corporate address—the closest location. At both banks, Safira encountered mobs of founders. "It was a run on the bank, plain and simple," she says.
Then, investors started calling Safira to say they would cover any payroll and operating costs. She and her team modeled out scenarios. "What if we didn’t have access to our capital for 30 days? For 60 days? For six months? We had clear conversations with our investors—Kirsten Green, Nicole Quinn, Tory Patterson, Anu Duggal, and Iyah Romm—about what checks they would put in if we needed it to ensure we could take care of our team."
News Sunday that all deposits were insured brought relief, and the episode left Safira with a sense of gratitude: "I usually believe our [team] can accomplish everything on our own and we will figure it out," she says, citing the execs who handled this week's chaos, Real's VP for people Jenn Coccia, head of communications Jamie Hill, and interim COO Kate Connor. "But being supported by your community is unbelievable."
Like Safira, Ashley Tyrner, founder and CEO of FarmboxRx, a food delivery nutritional program, learned of SVB's imminent collapse by text. She was on vacation at the time. "I checked my phone and saw that my COO tried to wire money out of our SVB account. [S]he’d pinged me over and over: ‘SVB’s going under. We have to move our money.’"
The nine-year-old startup had its money with Wells Fargo, Bank of America, First Republic Bank, and SVB. "It was mostly our venture debt with SVB. Still, we weren’t able to get our cash out in time."
Tyrner credits her "seasoned CFO" for knowing what to do, like sweeping the company's cash on a regular basis.
"Even though we were in a decent position, I knew I had to address this," she said. "At minimum, employees are wondering if everything’s OK.
Chloe Songer's startups, the sustainable retail platform Supercircle and footwear brand Thousand Fell, had "100%" of their funds "in SVB across checking and Money Market Accounts." She and her team tried to wire money out of SVB early Friday, "but it was held up by the FDIC receivership process."
"We spent Friday and the weekend shoring up new accounts and refining our financial strategy, including payroll, invoicing, and communications to operating partners."
"There was no playbook for founders in this scenario," Songer says, but she knew her team "needed to convey to our investors that there was a strong hand on the wheel and a clear strategy in place."
She regrets the loss of SVB, especially for her early-stage climate tech company that "need[s] financial partners that are accessible and available—but also flexible with varied financing and banking tools that can help us grow."
"Now there is a lot of uncertainty on who can fill that void as a financial partner for startups."
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
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