In the wake of the recent collapse of Silicon Valley Bank (SVB), Balaji Kridha, Head of Startup Launchpad at Deshpande Startups, has spoken out against the blame being placed on startups who deposited their money with the bank.
In a statement, Kridha said, “It surprised me that people blame startups for depositing money with a bank like Silicon Valley Bank (SVB) which has always been the bank of choice in the tech industry and venture capital, especially for US entities, and is part of Y-Combinator. To blame startups here was completely wrongheaded.”
Kridha’s statement underlines SVB’s trusted status in the tech industry for decades. However, the bank collapse has raised concerns about the banking industry’s health, particularly about potential systemic risks. It has also highlighted the importance of the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) in protecting depositors.
“Startups need to diversify where their funds are deposited, with smaller banks also needed in that strategy. This would help mitigate ripple effects both globally and locally. Investors should also remain vigilant, as instability could still occur in the future,” Kridha added.