After 17 years at SVB where he was Head of VC Relationship Management, @RobFreelen has dedicated the rest of his career to helping founders build industry-changing companies. In addition to MD at @SozoVentures, Rob co-founded a VC-backed FinTech & an early-stage wine company.

Just got off the phone with a founder who moved his cash from SVB to Big Bank yesterday. His thoughts: - Going back to SVB. I think it is now the safest bank in the U.S. - Experience with Big Bank was awful. They are terrible. - Want to support SVB. Will move back half of $.

SVB provided for tech when everyone else ignored us on.ft.com/3TcMo4U

Our economy will not function effectively without our community and regional banking system. Therefore, the @FDICgov needs to explicitly guarantee all deposits now. Hours matter. We also need a modern version of our deposit insurance regime, but that will take some time, and that’s ok as long as all deposits are guaranteed in the interim. Regional bank stocks are an incredible bargain now as long as the gov’t does the right thing, and I am confident it will. This means that one of the great trades would be to buy regional bank stocks or ETFs here. And the massive decline in rates makes this an even better investment now. This is not without real risk, but it does offer very attractive asymmetry. I would be surprised if Warren isn’t putting capital to work in his favorite regional banks now. Unfortunately, I won’t be able to participate as we decided that we wouldn’t invest long or short in banks as I want to continue to be part of this conversation and be able to share my views without the typical accusations against investors who share their views while having a trade on. But to be clear, I have an enormous conflict. We are 100%+ long North American companies. And we are all an enormous beneficiary of the success of our country and our banking system. So let’s hope our gov’t gets this right.

Silicon Valley Bank provided services to nearly half of all venture-backed tech and life-science companies in the U.S., according to its website. Here are some of collapsed bank’s clients. nyti.ms/3ZYhuzP

I really hope that @SenSherrodBrown @JoyceBeatty @MikeCareyOH15 pay attention and realize a 100% deposit guarantee to clients of SVB is THE critical move for @POTUS @ewarren. Letting @SVB_Financial fail will mean MORE consolidation to Top 4 banks, not less. #svbbanksmainstreet

Patriot Software addresses Silicon Valley Bank closure here >>> bit.ly/3yvcaHW #siliconvalleybank #svb #siliconvalley

The gov’t has about 48 hours to fix a-soon-to-be-irreversible mistake. By allowing @SVB_Financial to fail without protecting all depositors, the world has woken up to what an uninsured deposit is — an unsecured illiquid claim on a failed bank. Absent @jpmorgan @citi or @BankofAmerica acquiring SVB before the open on Monday, a prospect I believe to be unlikely, or the gov’t guaranteeing all of SVB’s deposits, the giant sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the ‘systemically important banks’ (SIBs). These funds will be transferred to the SIBs, US Treasury (UST) money market funds and short-term UST. There is already pressure to transfer cash to short-term UST and UST money market accounts due to the substantially higher yields available on risk-free UST vs. bank deposits. These withdrawals will drain liquidity from community, regional and other banks and begin the destruction of these important institutions. The increased demand for short-term UST will drive short rates lower complicating the @federalreserve’s efforts to raise rates to slow the economy. Already thousands of the fastest growing, most innovative venture-backed companies in the U.S. will begin to fail to make payroll next week. Had the gov’t stepped in on Friday to guarantee SVB’s deposits (in exchange for penny warrants which would have wiped out the substantial majority of its equity value) this could have been avoided and SVB’s 40-year franchise value could have been preserved and transferred to a new owner in exchange for an equity injection. We would have been open to participating. This approach would have minimized the risk of any gov’t losses, and created the potential for substantial profits from the rescue. Instead, I think it is now unlikely any buyer will emerge to acquire the failed bank. The gov’t’s approach has guaranteed that more risk will be concentrated in the SIBs at the expense of other banks, which itself creates more systemic risk. For those who make the case that depositors be damned as it would create moral hazard to save them, consider the feasibility of a world where each depositor must do their own credit assessment of the bank they choose to bank with. I am a pretty sophisticated financial analyst and I find most banks to be a black box despite the 1,000s of pages of @SECGov filings available on each bank. SVB’s senior management made a basic mistake. They invested short-term deposits in longer-term, fixed-rate assets. Thereafter short-term rates went up and a bank run ensued. Senior management screwed up and they should lose their jobs. The @FDICgov and OCC also screwed up. It is their job to monitor our banking system for risk and SVB should have been high on their watch list with more than $200B of assets and $170B of deposits from business borrowers in effectively the same industry. The FDIC’s and OCC’s failure to do their jobs should not be allowed to cause the destruction of 1,000s of our nation’s highest potential and highest growth businesses (and the resulting losses of 10s of 1,000s of jobs for some of our most talented younger generation) while also permanently impairing our community and regional banks’ access to low-cost deposits. This administration is particularly opposed to concentrations of power. Ironically, its approach to SVB’s failure guarantees duopolistic banking risk concentration in a handful of SIBs. My back-of-the envelope review of SVB’s balance sheet suggests that even in a liquidation, depositors should eventually get back about 98% of their deposits, but eventually is too long when you have payroll to meet next week. So even without assigning any franchise value to SVB, the cost of a gov’t guarantee of SVB deposits would be minimal. On the other hand, the unintended consequences of the gov’t’s failure to guarantee SVB deposits are vast and profound and need to be considered and addressed before Monday. Otherwise, watch out below.

I’m hearing that many VCs are advising founders to keep no more than $250,000 of funds in SVB. Here’s what USV told founders in an email: Keep “only keep minimal funds in cash accounts at SVB,” that is, funds of up to $250,000. “SVB is in a severe cash crisis”