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Kauffman Fellows Sentiment

Silicon Valley Bank (SVB) Shutdown. To see totals, hover/click on each section of the charts.

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164
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Responses
Did your fund or portfolio company have accounts with SVB prior to March 10?
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If yes, has your fund moved accounts to another financial institution/bank?
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On a scale of 1-10, how concerned are you about the industry ramifications of the SVB Shutdown?
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What are you advising companies who have less than 3-6 months of runway?
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Other ways we're advising companies
1
We do not have any portfolio companies in this situation that have accounts at SVB
2
No such case in our portfolio
3
NA because no specific exposure. but all our companies already had runway challenges. This doesn’t change it.
4
We give them a credit line knowing the money will be recovered
5
I don’t have any portfolio companies that use SVB
6
Board call to discuss
7
Tracking all portfolio companies in spreadsheet and will try to arrange support based on need
8
No companies with under 6 months of runway.
9
Assess and decide appropriate next steps
10
Contigency planning, within the likely time frame for receiving funds (50% in wk1, then rest [amt?] in 6-12mo)
11
Need to make sure they have cash flow
12
Get the unit economics of your business model to work or just die already and spare me 3 years of drip financing only to find the same conclusion.
13
Do what is in your control first. Reduce and push out expenses, etc. then look for external funds
14
Do an internal bridge
15
Does not apply
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As an after-action review: what measures will you be discussing with your portfolio companies going forward (or those that don't bank with SVB)
1
Too much of venture success consists of getting out while the market remains strong. Quality of portcos feels secondary at times like this. This can be massively demotivating for investors and founders alike, and destructive of societal value. We need to think about reforming the system in a more fundamental way. Starting with, why do we expect taxpayers to bail out irresponsible or bad-luck decisions? Portcos can hedge, and should, of course, but the issue in the long run is systemic.
2
Diversifying across at least two banks
3
Credit lines
4
Bank account diversity
5
I’ll just be reminding my VC and founder friends to take risk Mgmt seriously, to actually do their homework on counter party risk, and to never assume what people tell you is true.
6
Diversify banking relations ships
7
Diversify bank accounts
8
Urging to diversify, stay away from neobanks.
9
Reminding the importance of creating an internal “war time” process for sharing info.
10
Explore non dilutive fundings
11
Diversification
12
Diversify exposure on a couple of banks, use larger banks
13
Not much. This was such an anomaly. Not systemic
14
Banking exclusively with firms that are too big to fail / on the FSB list of Global Systemically Important Banks
Diversifying deposit accounts across those banks
15
Multiple bank accounts
16
The need to diversify bank account risk
17
We will discuss alternative sources of capital and lending sources.
18
multiple bank accounts, less reliance on debt
19
Bank with a larger commercial banks.
Have multiple operating accounts.
Excess cash shouldn’t be sitting in an operating bank account - money markets or short term tbills instead.
20
Need for diversifying your banking relationships. For my portfolio companies that were at SVB and have uninsured deposits, I am talking to them about cash flow for payroll and establishing new banking relationships.
21
Diversification of banking counterparties, obviously, but this requires a regime shift around venture debt, which most of our companies use.
22
Diversification and more understanding of FDIC insurance
23
Diversifying their cash deposits. Other measures to secure funds for short term runway.
24
Deposit cash in sweep accounts. for the rest, deposit in one of the top 4 banks
25
Diversification.
26
Diversify banks
27
Diversifying their banking providers - closer monitoring of cash/treasury management of portfolio companies
28
Better diversification of funds held at various institutions. Capital primarily held at banks that are too big too fail. Short-term credit lines in-place. Take the time to go through KYC with other institutions, even just to open a small account with little capital held in it.
29
cash runway analysis and necessary action to extend it (fundraise, debt or RIF)
30
Diversification of assets/cash between different institutions
31
Lessons learned.
32
Diversification
33
Companies should always maintain dual accounts and should have a safe treasury strategy for uninsured balances
34
look for short term debt options
35
Diversification best practices
36
Good question. Probably Exposure considering the potential after effects on additional banks
37
Sweep accounts
38
Consider all options, be strategic with banking relationships.
39
Profitability
40
Always have more than one banking relationship Always know your cash balance and burn - sounds simple but a lot are not as religious about it as they should be
41
Not sure
42
On-going financial health evaluation for all key service providers, bank redundancy, prepare for large potential down-market (if situation spirals), etc.
43
diversification of banking relationships
44
Diversify risk
45
The criticality of banking partnerships and cash management.
46
Account diversification, enforcement of sweep accounts in investment policies
47
Novel Capital is in a unique situation to help many tech companies to provide them capital and help them navigate the current challenges in the upcoming weeks.
48
.
49
Always have a back up account
50
Accounts at different banks, with at least 1 at a tier-1 financial institution
51
Moving all deposits to secure and liquid options.
52
Moving deposits to a larger diversified bank. Discuss bridge financing for near term operational expenses.
53
Diversification of banking relationships
54
NA
55
Diversify the banking relationship
56
Reviewing their global banking exposures and asking to mo itor and mitigate risks
57
Diversifying their banking relationships.
58
Cash
59
Same as prior comment. No more hall passes. You need to show that the unit economics of your business model are viable right now. Not in 2 years but now or just fade away because capital is fleeing to safety.
60
-treasury policies. How much, how involved, who involved, what institutions -won’t wire to someone who banks at suspect bank -beyond KYC - KYB becomes more important -cash planning with more disaster scenarios
61
TBD
62
Diversity of bank accounts.
63
Diversify deposit risk Extend runway by cutting costs
64
Securing enough cash for operationd
65
Diversify your bank accounts
66
Risk management
67
Realistically only limited amount of practical options
68
Still working through the short term impact of securing payroll so not thinking about more medium term yet.
69
Cut costs, raise capital, see what happens.
70
Diversify banks ad keep a percentage of Capital in a cold ledger.
71
diversification of assets with multiple banks
runway and funding situation
implications on customer base and sales going forward
72
Diversify banking accounts
73
Diversification
74
pro active risk management
75
Asses impact of current situation and do an action plan
76
Diversification of bank accounts
77
Multiple banks-but $250k in each bank is not reasonable. And managing sweeps takes people. See another fintech opportunity.
78
N/A
79
Diversify banking relationships and accounts
80
Banking policies, Setting up ICS accounts to expand insured amounts, looking at potentially moving away from regional banks like FRB (!)
81
(1) don’t put all eggs in one basket; (2) always have a contigent plan: (3) be conservative in managing cash and don’t overly chase returns.
82
we will look for a banking relationship with a more “solid” bank; we will diversity deposits
83
always make sure of FDIC and DIF but other than that it is very hard to patrol the banks for a consumer.
84
Diversification of banks, ensuring that assets are insured, more skepticism over debt funding opportunities
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