—
On March 29th, Ding Ding TV hosted Silicon Valley Entrepreneurs Forum – “How will the collapse of SVB change Silicon Valley?” at Ding Ding TV studios. Co-organizers and partners on the event included Sandhills Investment Club, Incepvision Law, TSVC, Founders Space, and Silicon Valley Central Chamber of Commerce.
Who is responsible for the SVB collapse? How will it affect startups, venture capital, and the ecosystem? If Silicon Valley is no longer the best place, where can investors put their money? Will SVB collapse cause a new financial crisis, or could this cause a butterfly effect? What lessons can be learned from SVB to avoid it in the future?
The panelists included: Steve Hoffman (the CEO of Founders Space, a venture investor, startups founder, and author), George Zhang (former Manager of the SVB Credit Risk Management department and Founder of Shunyi Cellars), Xiaoxiao Liu (a corporate and securities attorney), and Spencer Greene (General Partner at TSVC). Amrita Singh moderated the forum.
Zhang worked as a Manager of the SVB Credit Risk Management department. When asked who he thinks bears the responsibility for the collapse, Zhang said the management made mistakes on some decisions.
The moderator wanted to know how has SVB collapse affected the ecosystem of Silicon Valley.
Greene posited it is less than people believe. He thinks the collapse will impact companies that are in later stages. He also believes a lot has been going on in the venture ecosystem, and the SVB collapse is a symptom rather than the cause. As Greene mentioned this is at least the third cycle he has seen. Prior to the dot.com crash, “people were spending way too much money, and investors were pouring too much money into companies that were not worth it. Then there was the crash in 2001. 2008 financial crisis was the second cycle.”
Amrita Singh asked Steve Hoffman if he saw any signs. He said: “We knew we were in 0 interest world, and a lot of money was flooding the system. When interest rates rise dramatically, we knew there would be repercussions.” He also thinks the government did a good job by reacting quickly. On how the startup system will look in the future, Steve Hoffman said there would be less money, and that will impact how startups are run.
When asked which industries bore the impact, Spencer Greene said the fintech industry. He also mentioned the buy-now-pay-later products that depend on low-interest rates. He said: “Fintech will be the hardest hit, but they are not alone.
Hoffman spoke about whether the investors’ confidence in Silicon Valley is shaken, and where they will invest their money now. Hoffman said: “If it is a systemic issue with the banking system, it is going to affect a broader segment of the economy, you are going to see downturns all across the economy… these things are hard to predict, and the government is going to step in to mitigate that situation.” Hoffman also stressed the story is not over. People are shifting their money to bigger banks and diversifying across treasury notes. Hoffman concluded people’s appetite for risk has gone down.
The moderator wanted to know what we learned from the SVB collapse. Liu advises her clients to have more than one banking client. She also concluded no agreement could prevent these types of situations from happening.
From an investor standpoint, Zhang said he would invest in more mature startups. From a startup founder’s perspective, he suggested founders need to diversify more.
Hoffman concluded: “Diversify, diversify, diversify, and do not put all your eggs in one basket.”
A lively Q&A followed the panel discussion.
About Ding Ding TV:
Ding Ding TV wishes to bring communities together, stop the hate, and promote diversity. Based in California, Ding Ding TV is a Chinese American tech new media corporation headquartered in Silicon Valley.
Contact Info:
Name: Diana Ding
Email: Send Email
Organization: DingDing TV
Address: Santa Clara, CA, 95051
Phone: (408) 244-8883
Website: http://www.dingdingtv.com/stopthehate
Release ID: 89096655
