An anonymous Silicon Valley Bank employee gave Business Insider a first-hand look at the bank’s collapse.
The crisis meant two or three hours of sleep a night. Some employees forgot to eat.
Employees felt management was not keeping them up to date.
We are currently testing machine translations of articles by our US colleagues at Insider as an added service to our readers. This article has been automatically translated and reviewed by an editor. We welcome feedback at the end of the article.
Over the past two weeks, Business Insider has conducted a series of interviews with a Silicon Valley Bank employee. He gave a first-hand account of how the March 10 collapse of the bank unfolded from the employees’ perspective. The employee’s identity is known to Business Insider. Due to the sensitive customer relationships, however, she is kept anonymous. The report has been revised for length and clarity.
The messages I received that first weekend felt like I was at my own wake: “It was wonderful working with you”, “Silicon Valley Bank was a great support” – these are things that people say about you when you’re gone!
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Now that moment is behind us and we are resurrected, so to speak. In the best case – which I think is unlikely given the damage to the brand – we will continue as a wholly owned subsidiary. The more realistic hope is that we will be sold. The bidding process was opened to non-banks. It was completed on Friday.
First of all, management’s communication with both our customers and us was abysmal. We didn’t know what would happen to us. We didn’t know what to say to the customers. And yet every customer we knew called us. All transfers were stopped. Nobody could withdraw money. We were on the front lines.
Now my boss has said that top management will communicate more directly with us. My boss is part of what has come to be known as the ‘war room’ in our Palo Alto, California office. This is the only office that has remained open the entire time. The department heads sit there with the people from the Federal Deposit Insurance Corporation (FDIC), a deposit insurance fund, and try to clarify everything. The head of the product department, the head of the credit department, and so on.
In fact, we had no idea beforehand that any of what happened was going to happen. My team learned that the FDIC had taken us over during an internal team meeting while it was already in the news. It wasn’t until a few minutes later that we received an internal email from management. We had no way of preparing for it – we were left in the dark. So there was a shock. And some tears too.
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For the first few days, the biggest frustration in our team was that nobody was telling us what we could tell our customers. The people who worked at Silicon Valley Bank didn’t ask about their own homes or their children’s education, even though those things were also at risk. To this day, everyone is fixated on the customers. There was no selfish behavior in this first week. It was chaos. I ate a bagel every day and slept maybe two or three hours every night.
We spent a whole weekend on the phone, email, chat, every way we could to connect with the VC firms, the VC partners, the operational partners, the CFOs, everyone we reach able to get in touch to try and persuade them to take action.
The weekend after the FDIC takeover was crazy. Initially, there was a list of 13 venture capital firms who agreed to sign a statement showing their support for us. We had to increase this number. We spent an entire weekend communicating by phone, email, chat, every way we could with the venture capital firms, their partners, the operational partners, the CFOs, anyone we could reach, in to get in touch to try to get them to support us. I think the number of supporters today is 630. It was amazing to see the venture capital firms themselves come together and create this awareness. A lot of people have had our backs from the start. Once they knew their money was safe again, others changed their minds.
I wouldn’t even say they championed Silicon Valley Bank. It was about being an institution as the Silicon Valley Bank exists for the sake of the innovation economy. Our goal this first weekend was to get as many customers on board as possible. Because if they support us, that is also a signal to the Fed or the FDIC to intervene in some way. And they did. It worked. When the Fed said Sunday, “We will compensate depositors,” that was a big sigh of relief for the venture capital firms trying to pay their salaries. We’ve had so many clients tell us they might need to go out of business or cover their payroll costs with loans with personal guarantees.
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It’s safe to assume that customers are angry because their money has stopped flowing and their business has stopped. This is their elixir of life. And yet I haven’t had a single frustrated or angry call from a customer. Every call I have attended has been filled with empathy and support. It was always quiet. And that makes you feel even more crappy. Because when someone’s mad at you and they’re acting like a jerk, you’re like, ‘What the heck, there’s not much I can do.’ But everyone was so empathetic. So I said, “I really want to help you. My team has called, emailed, and texted hundreds of customers. It wasn’t so much a complaint as a question. But no angry questions.
The secret of Silicon Valley Bank has always been people. Now I’m hearing from former clients who have rushed to open accounts at Wells Fargo, Chase, JP Morgan and so on. The beginning was great, they say, the opening of the accounts. But now a few days have passed and they no longer have a contact person. You need to contact the 800 number. These founders are not used to it. At Silicon Valley Bank, they’re treated to a red carpet and a silver platter. Whether you’ve raised $5 million or $500 million, you have a single point of contact. That doesn’t exist in traditional banking. The founders are learning that now. They have no one to turn to with their wants and needs.
Last weekend I was finally able to sleep in properly. I ate something real. I went to an event and ate a full lunch – falafel, chicken shawarma. I had eaten nothing but bagels for days. No one ate anything for the first few days. They had to remind us to keep eating.
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I tried to ignore the personal side of things, but we lost a lot. Many employees receive more than 50 percent of their salary each year in the form of stocks — Silicon Valley Bank shares. In the few years I’ve been here, my shareholding has been worth more than a million dollars. Now it’s down to zero. So there’s a whole group of people here who personally lost whatever equity there was, and it’s still just like, “Can my client do the payroll?” That’s the culture here. On an internal conference call, someone said if we could stop the bleeding and draining of deposits, that would be the greatest story ever told. It will be the people who worked here who saved it. This was to be a Harvard Business School case study on customer service. I have never seen an organization grow together like this. There’s an internal poster, like the Avengers, except it has all the faces of the executives.
It has been said that we are too cuddly with our customers. Well, I don’t see it that way. It is true that a certain part of our business has to do with supporting investors. You have to trust them and be able to rely on them. It’s something you build over decades of working with someone, through good times and bad. You have to have these difficult conversations. Our business is to originate credit based on the client’s ability to raise the next round of financing. It’s not about coziness with investors. It’s about knowing your customers and their businesses, so you know which ones to intervene in when it matters most.
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First Republic received a capital injection. Signature has been sold. Credit Suisse was sold. And here we are, the people who started it. We still have no one. We are still in this state of uncertainty.
This week I walked into a Silicon Valley Bank office again for the first time. I just wanted to be with my colleagues. There were tears and hugs. I was hoping there would be more laughter. For us personally, there is still a lot of anxiety and stress. People are only now beginning to think about themselves and their future. The adrenaline rush has subsided and reality is beginning to settle.
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