This was following the news of the collapse of Silicon Valley Bank (SVB) and Signature Bank. The banks were shut down by the US regulator. Before being closed, SVB Bank was the 16th largest lender. It had $209 billion in total assets, while Signature Bank had $110 billion as of December 2022.
WHAT WENT WRONG ?
SVB invested in debt like the US treasuries and mortgagebacked securities, but as the US Federal Reserve began to increase interest rates to contain inflation, this reduced returns for banks and the value of SVB’s investments fell. Amidst venture capital money drying up, clients rushed to withdraw funds, leading SVB to sell assets which created $1.8 billion in losses. The incident spooked the customers of Signature Bank as well who rushed to withdrew large sum of deposits. The run led to its failure.
MANY INDIAN START-UPS AFFECTED
The collapse didn’t just affect American depositors, but also many Indian start-ups. Hundreds of Indian startups with millions of dollars in their accounts found themselves stuck. The fear and panic reflected in the share prices too. The shares of the mobile gaming company Nazara Technologies plunged 7 percent on the day it informed stock exchange that the two of its subsidiaries together had more than $7.75 million in balances at the failed bank. However, the company now heaves a sigh of relief after getting the amount back in full. “SVB was a very reliable bank and the current situation took us by surprise. However, we have got our full money back, and we have parked it at another bank in the US,” says Nitish Mittersain, Founder, Nazara Technologies
WHY DID START-UPS PARK FUNDS WITH SVB ?
Denne historien er fra April 2023-utgaven av Entrepreneur magazine.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra April 2023-utgaven av Entrepreneur magazine.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
How To Ask Family For Money
Your friends-and-family fundraising round doesn't have to be scary and awkward. Here's advice from one of the world's leading investors.
Data Breach Drama: When Trust Turns Costly In A Digital Age
Amid data breaches surges, Indian businesses are prone to financial and reputational fallout. Can cyber insurance emerge as a safeguard?
THE TERRAIN TAMER
Spearheading a California-based, Series D SaaS company is no easy feat. It requires a blend of ownership, innovation, and the ability to handle stress. But Anand Jain, co-founder and chief product officer of Clever Tap, finds his calm by escaping to rough terrain whenever he gets the chance-be it India or Colombia.
THE INTELLIGENT READS
Hardika Shah founded Kinara Capital in 2011 with the mission to address the acute credit gap in the micro-small-medium-enterprises (MSME) sector in India, by providing fast and flexible business capital to small business entrepreneurs. Despite operating in highly competitive and tough market of collateral free loans, Kinara Capital has been steadily growing in Hardika's leadership. In conversation with Entrepreneur, Hardika shares insights on her favourite books.
THE CURSE OF GROWING TOO FAST
FAIRE is a platform for small businesses, but it grew big the wrong way-almost becoming a $12 billion wreck. Here's how it fixed the problem, and why you should think twice before skyrocketing.
There's No Perfect Answer
I worked the same job for 19 years. I hated it, but it paid the bills. Then, in 2017, I entertained an exciting but terrifying question: Could I be an entrepreneur? I wasn't sure, so I needed something that felt like a guarantee. I searched for signs that would feel like a big, clear \"yes!\"
Give Yourself the Gift of Time
Happy holidays! Emmy Award-winning tech expert Mario Armstrong has five recs to get more hours in the day.
How to Become a Main Street Millionaire
It started when I bought one little laundromat. Now I have a whole portfolio of small local businesses that bring in tens of millions in revenue a year. Here's why following my playbook could be your ticket to financial freedom-and saving America's local small businesses.
Want to Better Serve Your Clients? Become Them.
As a designer for brands, starting my own product company gave me a dose of humility-and it changed the way I relate to clients.
How to Succeed With Gen Z Workers
People often say that younger employees are different. But are they? We asked six business leaders what they've learned, and how their teams thrive.
