By Erin Griffith from NYT Technology https://ift.tt/mTVWC7i
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Silicon Valley Bank's Collapse Causes Start-Up Chaos: What Happened and What's Next?
Silicon Valley Bank, one of the largest lenders to the tech industry, has collapsed, leaving many start-ups in chaos. The bank was known for its willingness to lend to risky tech start-ups and had become a key part of the ecosystem that had helped to fuel the tech boom.
The collapse of Silicon Valley Bank has sent shockwaves through the start-up world, as many start-ups had relied on the bank to provide them with the funding they needed to grow their businesses. Now, with the bank gone, many start-ups are struggling to find new sources of funding.
So, what caused Silicon Valley Bank to collapse? There are several factors that contributed to the bank's downfall. One of the key factors was the bank's over-reliance on the tech industry. The bank had lent heavily to tech start-ups, and when the tech industry began to slow down, the bank was left with a large number of bad loans.
Another factor that contributed to the bank's collapse was the bank's lack of diversification. The bank had focused almost exclusively on lending to tech start-ups, and had not diversified its portfolio enough to weather the storm when the tech industry began to slow down.
In addition, the bank had taken on too much risk. The bank had been willing to lend to start-ups with little or no track record, and had not done enough due diligence to ensure that these start-ups were financially stable.
So, what's next for start-ups affected by Silicon Valley Bank's collapse? Many start-ups are now scrambling to find new sources of funding. Some are turning to other banks, while others are turning to venture capitalists and angel investors.
However, the collapse of Silicon Valley Bank is likely to have a long-lasting impact on the tech industry. The bank was a key player in the ecosystem that had helped to fuel the tech boom, and its collapse is likely to lead to a slowdown in the growth of the tech industry.
Overall, the collapse of Silicon Valley Bank is a cautionary tale for start-ups and investors alike. It serves as a reminder of the importance of diversification, due diligence, and risk management, and highlights the risks associated with relying too heavily on any one player in the ecosystem.