So the interest rates going up were the main catalyst for the downfall but there was a sentence there - "Startups were burning through cash at 2x the rate they used to."
Wondering about that part and why it happened as, if I got it right, this was an unrelated occurence 🧐
yes that is a curiosity - I believe the author made a mistake, confusing startup increase of withdrawal with higher cash burn rate, when it is more likely that earnings were down against projection across the (tech) board, thus requiring more cash withdrawal to pay the bills
Thanks for sharing Matt, good read!
So the interest rates going up were the main catalyst for the downfall but there was a sentence there - "Startups were burning through cash at 2x the rate they used to."
Wondering about that part and why it happened as, if I got it right, this was an unrelated occurence 🧐
yes that is a curiosity - I believe the author made a mistake, confusing startup increase of withdrawal with higher cash burn rate, when it is more likely that earnings were down against projection across the (tech) board, thus requiring more cash withdrawal to pay the bills
This was a really good read on the various levels of impact of SVB comparing it to hurricane levels: https://open.substack.com/pub/cjgustafson/p/svbs-bank-run-contagion?r=2hj58&utm_medium=ios&utm_campaign=post