A sign hangs at Silicon Valley Banks headquarters in Santa Clara, California on March 10, 2023.

Noah Berger | AFP | Getty Images

More than three hundred venture capital firms have signed a joint statement vowing to do business again with Silicon Valley Bank if it is “purchased and appropriately capitalized,” after the financial institution failed on Friday.

Regulators shuttered SVB and seized its deposits on Friday following a run on the bank on Thursday.

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Preceding the bank’s failure, SVB CEO Greg Becker had announced a sudden need to raise $2.25 billion to shore up the financial institution’s balance sheet overnight on Wednesday. A dramatic wave of deposit withdrawals followed on Thursday.

Shares in the bank plummeted and triggered a trading halt on Friday before the California state regulators took over.

The SVB failure marks the largest in U.S. banking since the 2008 financial crisis and the second-largest ever.

Some venture firms withdrew their own money and instructed their portfolio companies to withdraw their deposits from SVB before the run. Reportedly Founders Fund, USV and Coatue were among those to do so.

Other venture investors lamented that directives from influential firms, even if prudent in a way, contributed to the run on a bank that had been a long-trusted financial partner to tech startups and firms that invest in them for decades.

The Federal Deposit Insurance Corporation (FDIC) will cover up to $250,000 per depositor and may be able to begin paying depositors under that cap as early as Monday. It remains to be seen, however, what portion of the deposits on SVB’s balance sheet will see a full or partial recovery, and whether there is an immediate buyer poised to acquire the bank’s operations.

In 2008, JPMorgan Chase acquired Washington Mutual Bank in a transaction facilitated by the FDIC.

As CNBC has reported, big names in tech and finance have been calling for the federal government to take dramatic actions to protect depositors who were not under the $250,000 insured cap. Their main concern is that a failure to protect deposits over $250,000 could cause a loss of faith in other mid-sized banks.

Venture firms including Accel, Cowboy Ventures, Greylock, Lux Capital, and Sequoia were among the 325 firms who had signed the letter as of Saturday evening in California, expressing a willingness to work again with SVB under new ownership.

The joint statement was shared by many individual venture capitalists on social networks following the bank failure. It said:

Silicon Valley Bank has been a trusted and long-time partner to the venture capital industry and our founders. For forty years, it has been an important platform that played a pivotal role in serving the startup community and supporting the innovation economy in the US. 

The events that unfolded over the past 48 hours have been deeply disappointing and concerning. In the event that SVB were to be purchased and appropriately capitalized, we would be strongly supportive and encourage our portfolio companies to resume their banking relationship with them.”

Read the statement and the full list of investors expressing support for SVB.