Concerns Over Startup Bankruptcies Spread in US Following SVB Closure

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The closure of Silicon Valley Bank (SVB) is spreading anxiety throughout the Silicon Valley startup community in the United States.

According to foreign media including Bloomberg on the 10th (local time), as U.S. financial authorities shut down Silicon Valley Bank, concerns are growing among Silicon Valley startups with weak financial structures.

SVB, established in 1982 as a major bank in the U.S. startup sector, is recognized for contributing to the development of venture capital (VC) over 40 years. It has played a central role in the U.S. venture capital industry that funds technology projects.

According to a press release from U.S. financial authorities, on this day, the California Department of Financial Protection and Innovation (DFPI) closed SVB and appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver of its assets. Consequently, the FDIC established the Santa Clara Deposit Insurance National Bank (DINBSC) to manage the insured deposits of SVB.

With the collapse of SVB, technology companies are facing severe funding difficulties. Many startups that have dealt with SVB are worried about whether they will be able to meet upcoming payroll deadlines.

In Silicon Valley, payroll is typically paid every one to two weeks. Deposits exceeding the depositor protection limit of $250,000 (approximately 330 million KRW) are frozen, and even if fully reimbursed, it may take a considerable amount of time, making cash flow difficult.

There are also concerns that many startups with weak financial structures could go bankrupt. One startup CEO said, "If we fail to withdraw funds, it may be difficult to manage cash flow for a significant period."

This content was produced with the assistance of AI translation services.