The failure of Silicon Valley Bank and Signature Bank has led to ripple effects across the entire financial system — including here in the Pacific Northwest. Those failures have triggered uncertainty among depositors and worries that other small and regional banks will suffer.
Portland Seed Fund is an early-stage venture fund focused on investing in Pacific Northwest companies. Its co-managing director, Angela Jackson, spoke with OPB Weekend Edition Host Lillian Karabaic about how the Portland startup community is responding to Silicon Valley Bank’s collapse.
Karabaic: Walk me through what your thought process was when you started hearing about Silicon Valley’s illiquidity.
Jackson: Disbelief would be the first word. I actually heard about it initially, from another reporter. This would have been Thursday night. I did some verification with different founders late Thursday. And by Friday morning, me and my partners at Portland Seed Fund were well aware that there was a live situation that we were going to need to help our founders navigate — and probably minute by minute.
Karabaic: So were you stressed on Friday morning?
Jackson: I wasn’t yet stressed. I did believe ultimately this would be a short-term pain in the neck, terrible experience for everybody going through it. But I ultimately did have faith that this would ultimately right [itself]. And in fact, that is the situation.
We’ve invested in over 175 companies. We have everything from brand-new baby startups to companies that have sold for over a billion [dollars]. So a whole range of experiences, some of the wisest people were those who had been through this before and were able to understand that if they could triage to the short term, that ultimately they’d be back to normal. And normal is relative, right?
I think the news late Sunday that the FDIC would in fact guarantee all deposits, not just those that were federally insured, that was the collective sigh of relief that everybody was waiting for.
Karabaic: So you had some companies in your portfolio that were exposed to Silicon Valley Bank. So what was the short-term pivots that they were walking through?
Jackson: The first thought of course is how do they get access to their own funds? Many businesses have a March 15th payroll cycle. So a lot of the initial triage and in fact, the bulk of expenses in a tech startup will always be personnel. And so covering that payroll was the very first concern. And then securing a custodian account prior to those checks being cut or wired. So there was just a real range of experience around that triage.
Karabaic: The folks that were invested in Silicon Valley Bank were saved by the FDIC bailout and their own smartness. But I know that first Republic Bank is where Portland Seed Fund has some of their funds and they raised capital over the weekend, but their shares fell so dramatically on Monday that their trading was halted. Are there actions that you’re taking to protect yourself?
Jackson: I think that First Republic example is just yet another example where, as with Silicon Valley Bank, decades of phenomenal service to the community and their constituents may belie what the stock market is doing. In the case of First Republic, we remain big fans of First Republic, we bank there. And I also want to say the whole banking community came together over the weekend to help companies establish new accounts at other institutions. So that included First Republic, that includes US Bank and others. You know, this is a really strong community that was working 24/7. I think the takeaway from me is the importance to create community, as Portland Seed Fund has done, for 12 years with founders. So resilience, taking care of yourself, taking care of your team ... those are kind of the take forward messages for the future.