I am an SVB employee who lost over $1 million. Here’s the inside story of our struggle to survive.
- An unnamed employee of a Silicon Valley bank gave Insider a firsthand view of the bank’s collapse.
- The intensity of the crisis meant 2 or 3 hours of sleep each night. Some workers forgot to eat.
- Rank-and-file employees felt that management did a “disappointing” job of keeping them in the loop.
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Over the past two weeks, Insider has conducted a series of interviews with a Silicon Valley Bank employee who has March 10 blast As experienced by rank-and-file staff. His identity is known to Insider, who agreed to remain anonymous due to the sensitivity of the client relationship. His account has been edited for length and clarity.
The messages I was getting at the end of that first week, it was like being alive in your wake. “You were GREAT to work with.” “SVB has been such a great pillar of support.” People talk about you like this when you are not here!
Now, we’ve passed that moment, and we’re kind of revived. The best case outcome — which I think is unlikely, tarnishing the brand — is that we operate as a wholly owned subsidiary. The more realistic hope is that we are sold. The bids have been opened to Non-Banking Institutions. It closed on Friday.
At first, communication from management was frustrating for our customers and us. We didn’t know what was going to happen to us. We didn’t know what to say to the customers. And yet we had every customer under the sun calling us. All the wires were dead. No one’s money could be withdrawn. We were in the front row.
Now, my boss has said that top management will communicate with us more directly. My boss owns the part known as the ‘war room’ in the Palo Alto office. This is the only office that remains open during all this. That’s where the department heads are sitting down with the FDIC guys trying to figure it all out. Head of Product, Head of Credit, and so on.
Actually, we had no idea beforehand that something like this was going to happen. My team learned that the FDIC had taken us over during an internal team call after it was reported on the news. We didn’t get an internal email about it from management until a few minutes later. We had no way to prepare ourselves—they kept us in the dark. It was a shock. And some tears too.
During the first few days, one of the biggest frustrations on our team was that no one was telling us what to tell our customers. It was never, “You’re not telling me what’s going to happen to me, personally.” The people who were actually working at SVB weren’t asking about their homes, or their children’s college educations, even though those things were at risk. To date, everyone’s focus has been on the customers. Selfish behavior, however, was not present during that first week. It was anarchy. I ate a bagel every day, and slept maybe 2 or 3 hours less each night.
We spent the entire weekend calling VC firms, VC firm partners, operating partners, CFOs, anyone we could contact, by phone, email, chat, any kind of way.
The weekend following the FDIC takeover was a crazy one. Originally there was a list of 13 VC firms that said they were willing to sign a statement saying they supported us. We needed to increase that number. We spent the entire weekend calling VC firms, VC firm partners, operating partners, CFOs, anyone we could contact, by phone, email, chat, any kind of way. I think the number of supporters today is 630. It is amazing to see the VCs themselves rallying and creating this awareness. Many people supported us from the beginning. Others changed their tune once they knew their money was safe again.
I wouldn’t even say they were rallying for SVB. it was for an institution Like SVB’s existence for the innovation economy. Our goal was to get as many customers as possible in the first weekend. Because if they are on board to support, it would help send a signal to the Fed or the FDIC to step in in some capacity. And they did. it worked. On Sunday, when the Fed said, “We will make depositors whole,” it was a huge sigh of relief for VCs trying to make payroll. We’ve had many customers tell us that they may have to close borrowing or cover payroll with a personal guarantee.
You would expect customers to be angry, because their money is stuck, their operations are stuck. It is his life blood. And yet I have never had a single frustrated or angry call with a customer. Every call I’ve made has been full of sympathy and support. It has calmed down. And that makes you feel worse. Because if someone is angry at you and is an idiot, you say, “Whatever, that’s all I can do.” But everyone was so sympathetic. So I was like “I really, really want to help you. I don’t know what I can do.” My team has called, emailed and texted hundreds of clients. These aren’t so much questions as complaints. But not angry questions.
The secret sauce of SVB has always been the people. Now I’m hearing from former clients who reached out to open accounts at Wells Fargo, Chase, JPMorgan, you name it. The start was great, he says, opening accounts. But now it’s been a few days and they don’t have any person to call. They have to go through the 800 number. These founders are not used to it. They are getting the red carpet, silver platter treatment at SVB. Whether you raised $5 million or you raised $500 million, you have a dedicated person. It does not exist in traditional banking. The founders are learning now. They have no one to go to for their wants and their needs.
Last weekend, I was finally able to get a good night’s sleep. I ate some real food. I went to an event and ate a full lunch – falafel, chicken shawarma. I had been eating nothing but bagels for days. No one was eating those first few days. He had to remind us to continue eating.
I’ve tried to ignore the personal side of it, but we’ve lost a lot. Many employees receive more than 50 percent of their pay in equity — SVB stock — each year. In the few years I’ve lived here, my equity used to be worth over a million dollars. Now it has become zero. So here you have a whole bunch of people who personally lost everything in terms of equity, and yet the focus was, “Can my client make payroll?” This is the culture here. On an internal call, someone said that if we could stop the bleeding and outflow of deposits, that would be the biggest story ever. Only the people working here will save it. This should be a Harvard Business School case study in customer service. I have never seen any organization come together like this. There’s an interior poster like Avengers, except it has all of the leadership’s faces on it.
It has been said that we are very comfortable with our customers. Well, I don’t see it that way. It is true that a certain amount of our business involves investor support. Have faith and trust in them. It’s something you build up over decades, working with someone through good and bad. After those difficult conversations. The nature of our business is to lend based on the customer’s ability to raise the next round. It is not getting along with the investors. It’s getting to know your customers and their companies so that you know which ones to lean on when it counts.
The First Republic received a capital injection. Signatures sold out. Credit Suisse was sold. And here we are, the people who started it all. We still don’t have any. We are still in this state of uncertainty.
This week, for the first time ever, I went back to a physical SVB office. I just wanted to be with my colleagues. Tears and hugs. I expected more laughs. There is still a lot of apprehension and tension for us personally. People are just starting to think about themselves and their future. The adrenaline rush has now subsided, and reality is starting to sink in.