*The $209 billion-dollar collapse of Silicon Valley Bank is reportedly impacting startups led by women, people of color, and LGBTQ+ individuals.
SVB offered a solution for underrepresented entrepreneurs who face significant barriers to accessing credit. As we reported previously, citing CNN, California regulators closed down the tech lender and put it under the control of the FDIC.
The FDIC is acting as a receiver, which typically means it will liquidate the bank’s assets to pay back its customers, including depositors and creditors.
Many Black founders and investors with ties to SVB are now concerned about how “to fill the gap in the ecosystem [left] from SVB,” said Joey Womack, a co-founder of the community organization Atlanta Black Tech, during a recent Zoom call with about 20 members of Atlanta’s Black business community, NBC News reports.
READ MORE: Companies That Held Money At Silicon Valley Bank Aren’t Sure if They’ll Recover the Funds | WATCH
????????In case you missed it.
☣️the government ignored East Palestine Ohio for nearly 3 weeks, and still no financial assistance for those people.
????but they ran full speed at the Silicon Valley Bank and others to prop up what is essentially a Ponzi scheme. Hundreds of billions of…
— James Miller (@realMeetJames) March 19, 2023
“I’ve gone to so many funds to try to see if I could raise some additional capital this year,” Barbara Jones-Brown, founder and CEO of the IT retail fraud prevention company Freeing Returns, said during the call, according to NBC News. Jones-Brown has an SVB business account that she opened last year after raising $3 million in funding.
“I’m very nervous that I will not be able to raise the money I need to keep my company going,” she said, “and it’s so scary after the beautiful, amazing year we had last year.”
Conservatives are claiming that the government’s rescue of the “woke” Silicon Valley Bank is a “Biden bailout”.
“Republicans will likely frame this bankruptcy and subsequent bailout as class warfare. It’s East Palestine versus Silicon Valley,” said Sam Geduldig, a Republican lobbyist, NBC News reports. “We can’t get into a situation where there’s red banks and blue banks, and unfortunately, that’s exactly where we are.”
Kelly Burton, the CEO of the Black Innovation Alliance, reacted to the accusations that SVB failed because it focused on diversity and “woke” issues.
“There will likely be retrenchment in the space with investors becoming more skittish. That can’t be good for Black founders, especially [considering] there’s all this conservative blowback,” she said.
