Since Thursday afternoon, Milwaukee attorney Daniel Gawronski and his team at Venture Best have been fielding calls from clients concerned about Silicon Valley Bank (SVB).
The bank, which worked with many growing startups and technology companies, swiftly shut down Friday when federal regulators seized control of the institution's assets less than two days after SVB officials announced it had lost nearly $2 billion. That left startups — including some of Gawronski's clients — scrambling to access their funds.
“It’s been a crazy few days,” said Gawronski, a partner with Venture Best, the startup arm of the Michael Best & Friedrich LLP law firm. He works with technology companies primarily based in Wisconsin and the Midwest, but also nationwide.
Although Wisconsin's startups were generally less impacted by SVB's collapse compared with coastal startups, some local companies banked with SVB and others are affected by the widespread uncertainty the bank's rapid failure caused.
Following the collapse of SVB, New York's tech-focused Signature Bank abruptly closed Sunday, fueling high-stakes challenges for the U.S. banking industry. The federal government on Sunday said it will cover all deposits at both banks, going above and beyond the $250,000 guaranteed by law under the FDIC Deposit Insurance Program
Some venture-backed companies in Wisconsin had deposits with SVB or Signature Bank, and there have been some venture-debt deals in Wisconsin, the Wisconsin Technology Council said in a Q&A posted on its website Sunday. A survey of the major funds and angel networks in Wisconsin did not uncover a large number in either category, the organization said.
A handful of Venture Best clients banked with SVB, Gawronski said. The companies are generally at the Series A stage or later in terms of their business maturity, he said.
In at least two cases, a Venture Best client was trying to close a merger or acquisition with another company that banked with SVB, Gawronski said. Those deals stalled due to the bank's collapse.
"SVB was kind of the bedrock bank of the startup ecosystem," Gawronski said. "Hopefully it's a case of mismanagement and not an overall economic issue."
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