The collapse of Silicon Valley Bank, a firm popular with tech startups and investors, could have lingering effects on the digital health ecosystem as the sector adjusts to a slowing funding environment, several venture capital firm managers said.
Emily Melton, managing partner of Threshold, said institutions like SVB are important to encourage people to take risks on new innovation, a critical need for the healthcare space.
“We need everybody around the table – founders, venture capitalists and other kinds of infrastructure, of which banking is one – to be able to have that innovation, to bring those solutions to market. So I’m hopeful that new owners will be able to continue to do that,” she said. “One of the things I’m very fearful of is that we get into an environment where people are risked off and retreat right when we need people to be actually leaning in more now than ever.”
Ambar Bhattacharyya, managing director at Maverick Ventures, said one concern after SVB’s collapse is creating a banking monopoly. He argued the venture debt and banking market was competitive, but many companies moved their funds to large banks as SVB fell apart.
According to Kruze Consulting, an accounting firm that focuses on startups, about half of its clients that recently changed banks moved to JPMorgan Chase, reports Mobi Health News.
“The onus is on all of us to make sure that we set up an ecosystem that optimizes for entrepreneurs and founders, and not for the banking industry,” Bhattacharyya said. Read more.
