The panic sparked by the collapse of Silicon Valley Bank is spreading to China, the world’s second-largest venture capital market. Across social media platforms, investors and startups are rushing to share news articles on the fiasco and thoughts on how to prevent such a catastrophic moment. For some companies, however, the impact is tangible.
When China was still new to venture capital in the late 1990s, SVB was among the first financial institutions to start serving the country’s startups, while traditional, risk-averse banks avoided them. Over time, the bank has become a popular option for China-based startups fundraising in USD as well as some China-focused USD venture capital firms.
In the U.S., VCs have been urging their portfolio companies to withdraw money from SVB as soon as the bank announced that it intended to sell shares in pursuit of more...
