Silicon Valley Bank’s Collapse: A Time for Fearless Leadership

Silicon Valley Bank has been a friend and supporter of Venture Atlanta for over 16 years. The shocking news surrounding its collapse on March 10 was devastating to so many. Seeing the collapse of a bank that gave countless startups and tech companies the power to chase their dreams was a sobering reminder that the economic cycle is not always pretty. However, in challenging times like these, it’s important for today’s business leaders to step up and provide guidance to their teams. As the fallout from SVB and Signature Bank’s collapse continues to unfold, we wanted to share our thoughts and provide readers with a resource they can use to navigate the storm.

How to Lead in Challenging Times

“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.” 

– Martin Luther King Jr.

All great leaders (ourselves included) have had to face adversity at some point in their lifetime. Today, more than ever, it is crucial for those courageous individuals to step to the forefront and be an inspirational force for their companies and employees to follow. During our 2022 panel, we spoke to Jeff Immelt, former CEO of GE, about what it takes for companies to be resilient in the face of economic adversity.

1. Seek Out the True Problem Solvers

Not everyone is built for leadership, and that’s okay. The first step in times like these is to identify who is right to assume that responsibility. The best leaders are natural problem solvers.

2. Provide Steady Guidance

It is important for leaders to not panic when times are seemingly at their worst. Great leaders absorb fear and project confidence to their team.

3. Stay Focused on the Future

While things may get worse at any time, remember that there is always a future ahead. Although it can be difficult to keep your chin up in a time like this, stay positive and focused on your ultimate long-term goals. You’ll get through this.

4. Always Hunt for New Opportunities

Whether you’re a small or big business, never be afraid to take risks and go in a new direction. Adaptability can go a long way.

5. Maintain a Sense of Calm

As Immelt said in his fireside chat, “As you’re going through a crisis, give your team things that they can work on. Don’t bend over backwards to scare them.” Keeping your team together is one of the most important things you can do to weather the storm.

If you’re looking to learn more, check out the recap of our full chat with Jeff, including how he helped guide GE through 9/11, the financial crisis of 2008, and the Fukushima Disaster of 2011.

What Comes Next?

“In times of great stress or adversity, it’s always best to keep busy, to plow your anger and your energy into something positive.”

 – Lee Iacocca

We know that since SVB’s collapse, federal regulators also seized Signature Bank to prevent further panic. The Federal Reserve, Treasury Department, and FDIC have jointly announced that depositors will be able to access all of their money, making an exception to the rule that normally insures up to $250,000 max.

What lies ahead is still unclear, though. Here are a couple of things to keep your eyes on, according to Bloomberg.

1. Are Bigger Issues for Banks Like First Republic Still to Come?

As the financial ripples hit other banks, it is important to have a plan in place to make sure your money is safe.

2. Will New Regulations Be Put in Place?

To prevent these types of bank collapses from occuring in the future, it can be assumed that new rules and regulations will be put in place. Will this put a strain on access to credit and venture capital?

How to Move Forward

“Success is not final, failure is not fatal: it is the courage to continue that counts.” 

– Winston Churchill

Venture Atlanta 2022 saw the largest and most diverse lineup of companies yet. Although the economic tides have turned in recent days, it is important to shine a light on the number of innovative businesses out there. Even though today may be challenging, we can build a better future together.

All over social media, especially LinkedIn, leaders including Venture Atlanta alumni are sharing lessons they’ve learned and helpful tips for the road ahead. In a recent post, Rob Kischuk, CEO and founder of Bellwood Labs, gave perspective on how he learned from Silicon Valley Bank’s sudden collapse.

Kischuk says it is important for businesses to make sure their deposits are secured by the FDIC at all times. He also argues for keeping money in a brokerage account, as the FDIC typically insures up to $500,000.

Kischuk and Karen Houghton, CEO and Founder of Infinite Giving,  both agree on the importance of cash sweeps. If the $250,000 that is insured doesn’t cover all of your cash, ask your bank if it offers a sweep program. These tend to cover a greater amount of capital and can be a lifesaver if anything goes wrong. Additionally, you may be able to reduce your risk by investing in Treasury Bills, which are fully backed by the U.S. government.

If you’re a business looking for a new financial partner, we’ve identified a couple of options, including Fieldpoint Private, and created a thread that will hopefully uncover more.If you’d like to chat with us, do not hesitate to reach out. Venture Atlanta is here to support and help guide you through this difficult time. 

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