On March 9, the venture capital industry broke its own unwritten code of solidarity. For the first time in public view, top-tier funds openly panicked.
Before dawn that day, at least a dozen prominent venture firms sent urgent warnings to startup founders, telling them to remove cash from Silicon Valley Bank. The messages came just hours after SVB Financial Group reported a $1.8 billion loss from Treasury sales. By noon, a bank run was underway.
Within 48 hours, $42 billion in deposits had been withdrawn. Federal regulators seized the Santa Clara lender on March 10, marking the second-largest bank failure in U.S. history.
The collapse exposed a deeper fracture in the venture ecosystem. SVB had long been the financial foundation of the startup world, lending to young companies when traditional banks would not and understanding metrics like burn rates and Series A rounds. It was built by and for the venture community.
Yet that same community destroyed it in a single weekend. Benedict von Thüngen, CEO of health-tech startup Sanome, received three separate calls from investors before sunrise on March 9.
“We loved SVB, but our duty to shareholders came first,” he told InfoPulseToday. By noon, his company had moved its $18 million operating account to JPMorgan. He described the decision as a tightrope walk. Eric Bahn, co-managing partner at Hustle Fund, posted “MOVE YOUR MONEY OUT OF SVB TODAY” in all capital letters.
He deleted the post within minutes, but not before it was screenshotted and widely shared. A subsequent joke referenced Elon Musk, though the text cut off.
The sentiment behind the post did not fade. Brad Svrluga, co-founder of seed fund Primary Venture Partners, posted on March 11: “I’d like to officially thank my colleagues in the venture community whose superb leadership over the past 48 hours provoked a run on deposits at SVB, ultimately collapsing one of the most significant institutions in our ecosystem.” The tweet, clearly sarcastic, received more than 7,000 likes. It also stated a fact.
Group-chat logs reviewed by Reuters confirmed the coordination was real. Multiple top-tier funds sent “get out now” messages simultaneously.
It was not a single rogue actor but a cascade of panic. And it succeeded. SVB is gone, its deposits now scattered across JPMorgan and other large banks.
The stakes go beyond one bank. The trust that holds the startup economy together is now in question.
Founders rely on investors for guidance, introductions, and the signal that a company is worth backing. When investors panic and urge everyone to flee, the signal changes to every fund for itself. Recriminations spilled onto Twitter, into podcasts, and onto Capitol Hill.
By March 20, investors were arguing over who lit the match, whether Washington should intervene, and what the collapse meant for the industry’s future. But the deeper question remains unanswered: If the venture community cannot hold together on something as basic as a bank, what will it fracture on next—the next downturn, the next liquidity crunch, the next moment when collective action matters more than individual survival?
The venture world has learned a lesson it did not want: its own institutions are only as strong as the willingness of its members not to pull the trigger. And once the trigger is pulled, there is no going back.
