Many founders have scrambled to recover funds they had parked in large amounts at the failed lender.
| A week after Silicon Valley Bank collapsed, a group of venture capital firms wrote to the shell-shocked start-ups they had put their money into. It was time, they said, to talk about the “admittedly not so sexy” function of treasury management.
“When the money’s flowing you pay less attention to it,” said David Koenig, whose DCRO Risk Governance Institute trains directors and executives on managing risks. It was not unusual for people who had been successful growing new things to, he added: “Risk to them is something that’s separate from what they do in their business.”
Hold three to six months’ worth of cash in two core operating accounts, they advised, investing any excess in “safe, liquid options” to generate more income. For Betsy Atkins, who has served on boards including Wynn Resorts, Gopuff and SL Green, SVB’s collapse is a “wake-up call ... that we have to do deeper focus on enterprise risk management”. Just as boards had started to scrutinise supply chain concentration during the pandemic, they would now look harder at how assets were allocated, she predicted.
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