SVB deep dive: Why is everyone talking about the bank now?

SVB deep dive: Why is everyone talking about the bank now?

The startup world was thrown into chaos Thursday when a lender little-known outside of Silicon Valley sparked a wave of panic in tech circles that dragged down banking shares around the world.

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Events snowballed after Silicon Valley Bank announced a share sale to shore up its finances, following a significant loss on its portfolio. After that, things went rapidly downhill. So, what does SVB bank do and why has it sparked panic? Here’s everything we know right now — and what could happen next:

What’s happening at SVB?

Santa Clara-based SVB’s ordeal began after its parent company, SVB Financial Group, announced that it sold $21 billion of securities from its portfolio and said it was holding a $2.25 billion share sale to shore up finances.

The move was prompted by high deposit outflows at the bank due to a broader downturn in the startup industry, analysts say. SVB also forecast a sharper decline in net interest income.

All of that spooked a number of prominent venture capitalists, including Peter Thiel’s Founders Fund, Coatue Management and Union Square Ventures, who, according to sources, instructed portfolio businesses to limit exposure and pull their cash