SAN ANTONIO – The collapse of the Silicon Valley Bank, which catered to the tech industry, caused some near-misses for startups across the country, including in San Antonio.
SVB was put under the Federal Deposit Insurance Corporation’s control after a bank run by panicked depositors. Two days later, the Federal Reserve, US Treasury Department, and Federal Deposit Insurance Corporation decided to guarantee all deposits at Silicon Valley Bank, as well as New York’s Signature Bank, which was seized on Sunday.
Days earlier, San Antonio’s Plus One Robotics had celebrated a successful $50 million fundraising effort. That money had been deposited with SVB, alongside most of the company’s operational funds - funds Plus One wasn’t able to access until Monday morning.
“There were clearly some tense moments over the weekend,” Plus One Robotics CEO Erik Nieves said.
Nieves said most of the company’s funds weren’t in danger since they were in a money market account, meaning that while they were in SVB’s custody they were technically deposited elsewhere. The real issue, though, was how Plus One could conduct business, including covering payroll for more than 80 employees, without access to its money.
“It did mean that, ‘Hey, we have customers that need to wire us payments. We have vendors that we pay electronically through SVB,’ and all of that plumbing would have to get reworked if in fact the bank failed. And so, you know, it was more trepidation on sort of the mechanics of day-to-day running of the business and never about were we going to lose all our money,” Nieves told KSAT on Tuesday.
SecureLogix faced a similar issue. CEO Lee Sutterfield said all of its operational payouts and receivables go through SVB.
The FDIC insures depositors up to $250,000, but any amount beyond that isn’t automatically guaranteed. Sutterfield would not say exactly how much was in SecureLogix’s account, but said it was “definitely” above that threshold.
However, Sutterfield said “we weren’t terribly worried.”
“We expected the government to cover most of the folks who hold assets in there,” Sutterfield said.
“They (FDIC) have a long track record of fixing these things for the short term. And so...we were pretty confident we would have access to everything on Monday,” he said.
Both companies, though, said they plan to diversify their banking more in the future.
“If a bank had a ransomware situation and locked up their funds, well, we would just make payroll or our obligations out of a different bank,” Nieves said.
The Associated Press contributed to this report.