Likely Consequences Of SVB Collapse on American Innovation Trajectory

Again, as the ripples generated by the collapse of Silicon Valley Bank (SVB) continues, some investors fear the collapse could damage innovation in the United States.

Tech founders and venture capitalists have continued to grapple with the news that the folding up of the bank thousands of startups relied on — Silicon Valley Bank — could also signal the end of an era of innovation.

“The collapse of Silicon Valley Bank will leave a big hole to fill when it comes to backing startups, raising worries that no one else will provide the kind of support for new businesses that came from the bank,” a tech insider with funds in SVB exclaimed recently.

“This in my opinion alters the very course of American innovation.”

SVB would take risks on startups that other banks weren’t willing to take, these people explained.

The bank would even let founders borrow against their companies — a benefit that helped many in the San Francisco Bay Area afford their lifestyle.

“SVB was unique in supporting innovation … that’s why it was built,” the source adds.

Especially after the bank’s dramatic fall, other institutions will likely be far too skittish to take on these risks, the source added.

While many are mourning the downfall of an institution that supported the tech industry for decades, others note the economic pain seems to be in line with what the Federal Reserve has wanted to inflict on the economy.

“Jerome Powell got his wish,” one source said. “He broke the economy.”