Silicon Valley investors and founders express shock, describe struggles to get money out of SVB

cnbc.com:

Venture capitalists and technology executives are scrambling to make sense and account for the potential repercussions of the sudden implosion of Silicon Valley Bank on Friday.

The Federal Deposit Insurance Corp. said Friday that U.S. federal regulators shut down Silicon Valley Bank, the premiere financial institution for Silicon Valley tech startups for the past 40 years. The collapse of SVB represents the biggest banking failure since the 2008 global economic crises.

Numerous venture investors and technology executives expressed shock to CNBC, some comparing SVB's current debacle to the Lehman Brothers, which filed for bankruptcy in 2008. Many of the investors and execs requested anonymity discussing matters that might affect their firms and employees.

General sentiment is that SVB did a poor job communicating to clients when it announced earlier this week that it would be raising $500 million from venture firm General Atlantic while also unloading holdings worth roughly $21 billion at a loss of $1.8 billion. One VC said the fact for SVB to announce that it's raising money while at the same time essentially saying that everything is «fine,» seemed to trigger people's memories of Lehman Brothers, who they remember acted similarly at the time.

«So unfortunately, they repeated mistakes in history and anyone who lived through that period said, 'Hey, maybe they're not fine; we were told that last time,'» the VC said.

SVB attempted to quell any fears that it was financially unsound as late as Thursday evening.

In one email that SVB sent to a customer, a copy of which CNBC obtained, the bank characterized the rumors about its problems as «buzz about SVB in the markets» and attempted to reassure the customer that it «launched