On Sunday evening, the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) released a joint statement announcing full protection of insured and uninsured deposits at the now-defunct Silicon Valley Bank, as well as at Signature Bank, a crypto-heavy, New York-based bank shuttered Sunday and now under the control of the FDIC. The joint statement also detailed additional measures intended to protect other at-risk banks, marking an end to an historic weekend and providing those in the venture world with the possibility of a good night's sleep for the first time in (at least) three days.
With the end of the crisis, the real work begins. It's now time for funds and portfolio companies to choose new deposit banks and new lenders. Landlords will soon want new letters of credit. Capital call lines will need to be replaced. Covenants requiring borrowers to consolidate deposits at a single institution are likely to go extinct. No venture fund or portfolio company will ever bank with a single institution ever again.
We may be biased, but in our view, this is the moment to call your advisors. We're ready to help our clients work through the immediate next steps, and all the steps that come after that. Go ahead - we're at our desks, and we're expecting your call. Talk soon.