Silicon Valley Bank has long been considered the lifeblood for tech startups, providing traditional banking services while funding projects and companies deemed too risky for traditional lenders. Billions of dollars in venture capital flow into and out of the bank’s coffers.But the 40-year-old firm’s intimate ties to technology leave it particularly sensitive to the industry’s boom-and-bust cycles, and on Thursday those risks became abundantly clear.related investing newsSVB was forced into a fire sale of its securities, unloading $21 billion worth its holdings at a $1.8 billion loss, while also raising $500 million from venture firm General Atlantic, according to a financial update late Wednesday. After its stock soared 75% in the 2021 market rally, SVB lost two-thirds of its value last year and then plummeted another 60% during regular trading on Thursday and an additional 22% after the close.For the Silicon Valley region, the troubles land at a particularly difficult time. Venture capital deal activity sank over 30% last year to $238 billion, according to PitchBook. While that’s still a historically high number, the dearth of initial public offerings and continuing drawdown in valuations among once highfliers suggests that there’s much more pain to come in 2023.Signage for high-tech commercial bank Silicon Valley Bank, on Sand Hill Road in the Silicon Valley town of Menlo Park, California, August 25, 2016.Smith Collection | Gado | Archive Photos | Getty ImagesAs a large regulated bank, SVB has been viewed as a stabilizing force. But its latest financial maneuvers are raising alarm bells among the firm’s client base.”Psychologically, it’s a blow because everyone realizes how fragile things can be,” said Scott Orn, operating chief at Kruze Consulting, which helps startups with tax, accounting and human resources services.Orn called SVB …
