Silicon Valley Bank has failed

Silicon Valley Bank is important for venture capital firms and startups. But as the economy has changed, VC-funded companies burned through their available cash. Simultaneously, VC funding dried up. So Silicon Valley Bank’s deposits dropped faster than the bank anticipated.

After Silicon Valley Bank announced on Wednesday that it had sold $21 billion in securities at a loss of $1.8 billion, along with a plan to sell $2.25 billion in new shares, many of its remaining customers moved quickly to shift their money elsewhere.

A recent 10-K filing showed more than 90 percent of its deposits were uninsured, and the FDIC says today that “At the time of closing, the amount of deposits in excess of the insurance limits was undetermined.” Some companies who tried to pull money out on Thursday said they were having trouble making transfers, and there is concern over how this could affect some tech and biotech startups who still had their money deposited with the bank.