Venture capitalist Bob Ackerman, founder and managing director at AllegisCyber Capital, told Bank Info Security that with the bank’s demise, it won’t be as easy for cybersecurity startups to access loans or credit lines.
Ackerman said that Silicon Valley Bank had stood by money-losing startups—”the Apples or the Oracles or the CrowdStrikes of the future”—even when conventional banks retreated in gloomy economic cycles. The 16th-largest U.S. bank by assets at the end of 2022 told Ackerman that it had more than 500 cybersecurity companies banking with it, according to Ackerman.
CrowdStrike was reportedly among the cyber vendors most closely associated with Silicon Valley Bank, where it had a $750 million credit line (The company said it didn’t expect to draw on the credit line and that it diversifies risk across more than a dozen banks).
Other cybersecurity companies that worked with Silicon Valley Bank include Sumo Logic, Rapid7, KnowBe4 and Snyk, whose founder Guy Podjarny once sang the bank’s praises in a five-minute video recorded at its offices.
Brian Fritton, the founder of cybersecurity company Havoc Shield, told TechCrunch he heard about Silicon Valley Bank’s problems via a text message from another founder, and called an emergency board meeting to temporarily shift assets to another account. “I didn’t sleep much,” Fritton said.
Shai Morag, co-founder and CEO of cybersecurity company Ermetic, told CTech, “We were able to withdraw tens of millions of dollars that we had there and we were left without significant exposure.”
Fierce Electronics calls regulators’ closure of Silicon Valley Bank “a horror show” for many in the tech community.