A Brink’s armored truck is parked in front of the defunct Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California.
Justin Sullivan | Getty Images
Tech founders and executives weren’t deterred by the inclement weather on Friday as they thronged the doors to Silicon Valley Bank locations across the Bay Area, hoping to get their money and answers to their critical questions.
Regulators stopped SVB and seized their deposits in the second largest US bank failure in history and the largest since the 2008 financial crisis.
Thousands of startups have long relied on SVB for everyday banking services, and the company’s sudden collapse raised looming concerns about how customers would pay their bills and their employees.
Some business leaders went to the bank’s office to try to get help. While waiting outside in long lines, they found camaraderie with those in the same boat and shared stories of their misadventures.
“Hope for better news on Monday”
SVB had 17 branches in California and Massachusetts, and the FDIC said in its press release that “the headquarters and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023.”
The regulator said all insured deposits will be available on Monday. However, the FDIC only insures deposits up to $250,000 per customer and, as a bank primarily serving businesses, approximately 95% of SVB’s deposits are uninsured.
In Santa Clara on Friday morning, SVB customers arrived frustrated and angry, many wearing blank and tired faces.
A group of four men gathered near the doors. Some had tears in their eyes.
One of the men, who asked not to be named, told CNBC that he has been banking with SVB since 2018 and never expected to see this happen. He said most of his money was tied up in the bank. Eventually the man let out a soft sob and apologized as he excused himself.
A woman, delivered by a Uber, slung her backpack over her shoulder and marched to the front doors of the bank, past the crowd, determined to talk to someone. When she reached the locked doors, people in the crowd murmured that no one would speak to them. Unsuccessful, the woman ordered another Uber that picked her up a few minutes later.
By the end of the day, startup founders were trickling in less and less to Menlo Park’s boardwalk, hoping to snag a rep.
Customers could be heard repeating the phrase, “hope for better news on Monday.”
A sign posted in the windows of each location repeated the line from the press release that all locations opened Monday.
A startup employee, who did not want to be identified, brought up the 2008 financial crisis and the FDIC’s takeover of Washington Mutual. The failed savings and loan was sold to JPMorgan Chaseand the man said he hopes for a similar type of result for SVB.
At one point, a pizza delivery boy showed up with at least five boxes of pizzas. It was the first time the doors had been opened in several hours.
“I’m trying to get a check!”
In Menlo Park, Teslas pulled into SVB’s Sand Hill Road parking lot on Friday. Customers got out of their cars and approached the entrance.
Those visiting a San Francisco branch earlier in the day were greeted with a Post-it note directing corporate customers to the bank’s Sand Hill location. It’s a 40 mile drive and one that didn’t provide satisfactory answers.
“I’m trying to get a check!” A man said, knocking on the locked glass doors while making eye contact with someone working in the office. A representative came out periodically to answer customers’ questions in a whisper, declining to address the press.
SVB customers knocked on the locked front doors of the Menlo Park office, hoping to get the attention of a security guard or representative.
A startup founder told CNBC he came to make sure an international wire transfer of tens of thousands of dollars went through.
“I just don’t know if they’re going to stop the wire transfer and they hadn’t said anything about it and we couldn’t get through when we called,” said the man, who asked not to be identified. “So, we’re just flapping a little and I thought I’d just come here since I’m not too far.”
He said that when the check clears, “I’ll probably look at other institutions to put money.” He said he wasn’t too worried because he had insurance on the transaction.
Two startup founders waited for a representative to answer their knocks.
“After this we put our money in several banks,” said one to the other. “Us too—if we’re still around,” said the other.
The men declined to give their names, telling CNBC only that they were founders of separate small startups.
Another startup executive told a representative that he made a transaction at 8:30 a.m. The bank employee said he had missed the 8:15 cut off time to have a transaction processed. The man looked defeated and bowed his head and said “You can understand the stress I’m in – this is our only bank.”
“I understand,” the representative said, “there’s a sense of urgency from all of us and every day we’re going to know more so, there’s that comfort.”
Another customer upon seeing the representative approached her and said, “We tried to call the number but couldn’t get through,” referring to a customer service call published in the company’s press release. The bank employee apologized and quickly closed the door.
Some people showed up just for photos and selfies. At the Menlo Park branch, a person wearing a Patagonia jacket posed for a picture in front of the SVB logo. Asked if he was a customer, he laughed and said, “I used to be.”
— CNBC’s Rebecca Smith contributed to this report.
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