Silicon Valley Bank's Effect on Esports and Gaming
The good news is that the direct impact appears to be minimal, the bad news is startups in the U.S. face uncertainty over the next several weeks as the FDIC sorts things out.
Friday night blurred into Saturday morning for me as researched just who in esports and gaming might have been affected by Silicon Valley Bank’s collapse and takeover by the FDIC on Friday. I also spent time writing emails, DMs, and making phone calls to figure out who in esports and gaming might have taken a hit from this.
The good news—if there really is any to take away from this awful situation—is that the tier-one esports organizations in Los Angeles that one would have expected to be actively doing business with SVB had no financial ties to the bank. I have detailed in this story for The Esports Advocate just who has been affected.
Still, it’s terrible news for startups in the U.S. because, according to SVB’s claims, it “banks nearly half of the 2022 U.S. venture-backed technology and life science companies.“ Many of those companies, who will need to make payroll next week, don’t have access to cash right now and founders everywhere are panicking. The FDIC said Friday that insured funds will be available on Monday, but it gets a little more complicated if those accounts are uninsured because the limit is $250K.
Y Combinator Founder Garry Tran called it a extinction level event for startups if the FDIC doesn’t act quickly and on Friday he urged those affected to contact their representatives in Congress to get this situation on their radar.
Of course, this will have a ripple effect on startups in all sectors in the U.S. as investors, VC funds, and banks feel the aftershocks of a major institution that served all involved over the last 40 years collapse in under 40 hours…
For a blow-by-blow of how this all happened, check out my story. Thanks for reading, and I apologize for not delivering kinder news. - James Fudge