Silicon Valley Bank, the biggest US lender to so many big techs and the 16th largest bank suddenly collapses. Certainly, this is no good news, especially with the current happenings where businesses are having major setbacks and laying off valuable employees. This collapse has had a significant impact on about 65,000 tech startups, entrepreneurs, and investors by exposing them to financial vulnerability in an unpredictable economy.

To manage the situation, SVB was closed down by California regulators to put it under the control of the US Federal Deposit Insurance Corporation. And to disburse funds, FDIC ensures each depositor recovers $250,000 but this doesn’t stop them from freaking out about how they will secure all their money.

However, there is a problem, over 95% of SVB’s deposits are not insured by FDIC because they surpassed the $250,000 limit, the affected tech startups scramble as they might not be able to generate payroll, and this becomes a bigger problem!

Also, the meltdown is alarming to the point that depositors are hurriedly withdrawing their funds while startups are panicking about how to get their money so as to pay back their customers.

Parker Conrad, Co-founder of Rippling, a cloud-based human resources platform said in a tweet, “Our top priority is to get our customers' employees paid as soon as we possibly can, and we’re working diligently toward that on all available channels, and trying to learn what the FDIC takeover means for today's payments.

Notwithstanding, while some entrepreneurs are sharing how affected they are by the loss with proof that they were added to the list of SVB depositors, others are sending out disclaimer emails to their users to ease the tension and manage everyone's agitation based on the widespread of the news

Rather than solely depending and investing in customers’ deposits in treasury bonds, Silicon Valley Bank should have raised more capital to save itself from this.