A sign hangs at Silicon Valley Bank’s headquarters in Santa Clara, California on March 10, 2023.

Noah Berger | AFP | Getty Images

More than three hundred venture capital firms have signed a joint statement pledging to do business again with Silicon Valley Bank if it is “acquired and capitalized appropriately,” after financial institutions failed on Friday.

Regulators stopped SVB and seized its deposits on Friday after a raid on the bank on Thursday.

Before the bank’s failure, SVB’s CEO Greg Becker had announced a sudden need for an increase 2.25 billion dollars to strengthen the financial institution’s balance sheet overnight on Wednesday. A dramatic wave of deposit withdrawals followed on Thursday.

Shares in the bank plummeted and triggered a trading halt on Friday before California regulators took over.

The SVB failure is the largest in US banking since the 2008 financial crisis and the second largest ever.

Some venture firms withdrew their own money and instructed their portfolio companies to withdraw their deposits from SVB before the run. Founders Fund, USV and Coatue were reportedly among those who did.

Other venture capitalists lamented that the directives from influential companies, while cautious in one way, helped run a bank that has long been a trusted financial partner to tech startups and the companies that invest in them for decades.

The Federal Deposit Insurance Corporation (FDIC) will cover up to $250,000 per depositor and may begin paying depositors under that cap as early as Monday. However, it remains to be seen how much of the deposits on SVB’s balance sheet will recover in whole or in part and whether there is an immediate buyer ready to acquire the bank’s operations.

2008, JPMorgan Chase acquired Washington Mutual Bank in a transaction facilitated by the FDIC.

As CNBC has reported, big names in technology and finance have called on the federal government to take dramatic action to protect depositors who were not under the $250,000 insured cap. Their main concern is that a failure to protect deposits above $250,000 could cause a loss of confidence in other mid-sized banks.

Venture firms including Accel, Cowboy Ventures, Greylock, Lux Capital and Sequoia were among the 325 firms that had signed the letter as of Saturday night in California, expressing a willingness to work again with SVB under new ownership.

The joint statement was shared by many individual venture capitalists on social networks after the bank failure. It said:

Silicon Valley Bank has been a trusted and long-standing partner to the venture capital industry and our founders. For forty years, it has been an essential platform that has played a critical role in serving the startup community and supporting the innovation economy in the United States.

The events that unfolded over the past 48 hours have been deeply disappointing and disturbing. In the event that SVB were to be purchased and capitalized appropriately, we would be strongly supportive and encourage our portfolio companies to resume their banking relationship with them.”

Read the statement and full list of investors expresses support for SVB.