Four days of panic: How startup execs navigated SVB’s meltdown and prepared for the worst
A Silicon Valley Bank worker talks with people lining up outside of the bank office on March 13, 2023 in Santa Clara, California.
Justin Sullivan | Getty Images
After turning on CNBC last Thursday to see SVB’s stock price getting hammered and news of venture firms urging startups to hit the exits, EarthOptics CEO Lars Dyrud acted quickly. At 4 p.m. ET, he requested a $25 million wire transfer from Silicon Valley Bank, representing roughly 90% of his company’s deposits.
It was too late. EarthOptics didn’t get a response on Thursday, and the following day SVB was seized by regulators in the second-largest bank failure in U.S. history. Dyrud had no idea when he’d be able to access his company’s deposits, as the Federal Deposit Insurance Corp. only guarantees $250,000 per client.
Like thousands of SVB customers, Dyrud was most immediately worried about missing payroll for March 15, which was just a few days away. He spent all day Friday and the weekend devising an emergency plan that centered around a $1 million loan from three board members, including from one investor who would be wiring funds to BambooHR, the company’s paycheck processor.
“We started planning to be without cash for nine months,” said Dyrud, in an interview Tuesday. “We had four plans in place in priority order in case something went wrong.”
Dyrud sent a Slack message to his employees late last week, updating them on the situation.
“We ultimately expect to be made whole but need to prepare for alternate access to cash while this is sorted,” Dyrud wrote in the memo, which he shared with CNBC.
SVB’s speedy collapse sent shock waves across Silicon Valley as the failure of the preeminent bank for venture-backed startups threatened to indefinitely freeze access to the money companies need to pay their staff, vendors and partners, while also destabilizing the banking system.
According to California regulators, investors and depositors withdrew $42 billion from SVB by the end of Thursday after the bank said it was selling $21 billion worth of securities at a loss and trying to raise additional capital. Dyrud feared at the time that it would be the fastest bank run the country has ever seen due to the nature of the clientele and the speed with which information travels.
On Friday afternoon, Dyrud went with his chief administrative officer and controller to a local Wells Fargo branch, in Arlington, Virginia, to open a new account. It was the only bank that would open a same-day account for his 75-person startup, whose technology is used by agricultural companies and farmers to measure the health of their soil.
That evening, Dyrud held a 45-minute board meeting over Zoom to make sure everyone was aware of the gameplan and the loan arrangement, which was structured as an unsecured promissory note. Dyrud said he was on the phone 12 hours a day, starting Thursday.
Four days of panic finally came to an end late Sunday, when regulators announced a plan to backstop deposits and ensure that all clients would be able to retrieve their money starting Monday.
By early this week, EarthOptics had its cash safely in Wells Fargo and was repaying two investors for the loans. Dyrud said he was able to call off the loan from the third investor before the money was sent.
“It was the most heavily negotiated two-day loan ever,” Dyrud said.
Refreshing Google
Otter.ai founder and CEO Sam Liang spent Monday driving to SVB branches in Silicon Valley to try and retrieve millions of dollars of his company’s money.
Liang said the company, whose software transcribes audio from meetings and interviews, tried to initiate a transfer Thursday night, but it never went through.
“We were pretty worried over the weekend, watching the news all the time,” Liang said, in an interview on Monday from the parking lot of the SVB branch in Menlo Park, California. “I checked Google like 20 times an hour, watched [Treasury Secretary Janet] Yellen talking about not bailing out Silicon Valley Bank.”
He woke up at 7 a.m. on Monday and tried logging into his account, but kept getting error messages because the system was overloaded. That’s when he got in his car.
“I figured, OK I’ll just go to an office physically,” Liang said. “I went to the Palo Alto office first. There was a line there, but a guy said they couldn’t do much. I drove from the Palo Alto office to the Menlo Park office.” At that branch, Liang said he waited between 90 minutes and two hours for help.
Liang said he’s lucky that a few months earlier Otter, which has about 100 employees, had moved the majority of its money to another bank, though he didn’t say why. Still, he said the company had a lot of money in SVB — in the millions of dollars, but less than $10 million — which would represent “a huge damage” if it disappeared.
“We need to make sure payroll and everything works,” Liang said.
He wasn’t able to get a hold of all of his money right away, though he’s confident it’s all available following the plan announced by regulators on Sunday.
Silicon Valley Bank customers listen as FDIC representatives, left, speak with them before the opening of a branch SVBs headquarters in Santa Clara, California on March 13, 2023.
Noah Berger | AFP | Getty Images
“I just got a cashier’s check,” he said. “They couldn’t give us everything so they gave us a percentage of the money. We have to do it again probably later today.”
Meanwhile, as clients plotted their next move, SVB’s newly appointed leader sent out a plea for customers to come back home.
Tim Mayopoulos, who was appointed by the FDIC as CEO of the bank, now called Silicon Valley Bridge Bank, emailed customers to tell them that SVB is open for business and ready to receive and hold deposits.
“The number one thing you can do to support the future of this institution is to help us rebuild our deposit base, both by leaving deposits with Silicon Valley Bridge Bank and transferring back deposits that left over the last several days,” Mayopoulos wrote in an email that was also posted on the company’s website.
Liang said Otter opened accounts at two larger banks over the weekend and will “distribute money over multiple banks.”
Dyrud has a similar plan. For now, all of EarthOptics’ cash is parked at Wells Fargo, but he said the company will soon spread some of it to JPMorgan Chase and one other bank.
“It just makes sense,” Dyrud said. “We wouldn’t have been in this position had we had even a second account.”
Dyrud traveled from Washington, D.C., where he’s based, to San Francisco for a conference this week. Dyrud said he’d never done business with SVB prior to running EarthOptics, but he’s spoken with people at the event who have much longer and deeper ties to the bank through venture debt arrangements and other types of financing.
“There are some that are more loyal than I,” he said.
Like buying Taylor Swift tickets
Will Glaser would put himself in the more loyal category, though he had an equally chaotic four days as he tried to shore up his company’s liquidity.
Glaser is founder and CEO of Grabango, a developer of checkout-free shopping technology. He’s a longtime Bay Area technologist, having co-founded Pandora in 2000.
Grabango was more limited than some other companies in how it could respond to the SVB crisis because of the terms of its agreement with the bank. Grabango counts on the bank for a venture debt line, which includes a provision that forbids the company from doing much banking with other institutions.
That exclusivity created a huge headache for Glaser over the weekend. He wasn’t sure how he’d be able to come up with the funds needed to meet March 15 payroll without breaching his company’s covenant with SVB. And nobody was picking up the phone at the bank to tell him it was OK, or alternatively, to help him get an additional short-term loan from SVB.
“I was definitely scrambling with my team and investors to line up alternatives,” Glaser said. “There was never a moment where I thought we’d lose our deposits, but it was definitely a liquidity crunch. Would we have money and time to make payroll?”
Glaser said he was communicating all weekend with his investors and lawyers from Orrick, Herrington & Sutcliffe. They were discussing all possible contingencies and trying to determine if there were any emergency funding options to pay the company’s 110 staffers without potentially breaking the terms of its SVB contract. That could’ve involved “me funding payroll personally” or “one of our investors leaning in,” he said.
Ultimately, Glaser was relieved of having to make a tough decision. All of Grabango’s cash at the bank, which totals in the double-digits millions, would be available by Monday, in time for the company to transfer money to its payment service provider and meet payroll by Wednesday.
Not that it was smooth sailing on Monday, when Glaser was among the many SVB clients trying to get everything back up and running. The bank’s tech system wasn’t prepared for the onslaught.
“I’m on the SVB website and I felt a little like a teenager trying to buy Taylor Swift tickets,” Glaser said,
Despite the madness that spanned Thursday to Monday, Glaser is now more confident than ever with his banking situation. Prior to the run on SVB, Grabango’s deposits weren’t protected. Now they are, under the government’s action to protect depositors, whether insured or uninsured.
Grabango even pulled down an extra credit line with SVB this week, giving the company more access to capital for its hardware business.
“I think the world will diversify more going forward,” Glaser said. “But at the moment, as long as Silicon Valley Bridge Bank is 100% federally guaranteed, there’s no need to diversify. There’s no safer place to be.”
— CNBC’s Rebecca Smith contributed to this report
WATCH: Here’s how legislators are looking at the collapse of SVB
Sam Altman, CEO of OpenAI, is seen through glass during an event on the sidelines of the Artificial Intelligence Action Summit in Paris, Feb. 11, 2025.
Aurelien Morissard | Via Reuters
Elon Musk tried to derail a major artificial intelligence infrastructure deal in the Middle East after learning that his startup, xAI, would be excluded from the initiative, CNBC has confirmed.
Earlier this month, OpenAI, Oracle, Nvidia, Cisco and Emirati firm G42 announced plans to build a sweeping Stargate AI campus in the United Arab Emirates. Musk was frustrated that OpenAI, led by personal rival Sam Altman, was tapped for the deal, and he intervened in an effort to get xAI involved, said a person familiar with the matter who asked not to be named in order to speak freely.
Musk argued that President Donald Trump would not approve the deal, the person said. The announcement was delayed by several days as stakeholders, including the White House, dealt with blowback from Musk, who has been engaged in a public and legal spat with Altman and OpenAI.
The Wall Street Journal first reported that Musk attempted to block the deal.
In a statement to CNBC, White House press secretary Karoline Leavitt didn’t mention the dustup.
“The United States and the UAE signed a groundbreaking framework agreement establishing the first AI acceleration partnership,” Leavitt said. “The framework advances the buildout of AI infrastructure in the United States and the UAE. This was another great deal for the American people, thanks to President Trump and his exceptional team.”
Musk wasn’t in the UAE when the deal was signed, but was with the president in Saudi Arabia during an earlier part of the Middle East trip, according to a senior White House official. The official said Musk has relayed his concerns about the government fairly treating all AI companies.
OpenAI declined to comment. Musk didn’t respond to CNBC’s request for comment.
Musk, who is also CEO of Tesla and SpaceX, is a complicating character in Trump’s effort to solidify U.S. leadership in AI. Musk spent close to $300 million to send President Trump back to the White House, and has since been leading the Department of Government Efficiency (DOGE), slashing the size of the federal workforce. His time as a special government employee is coming to an end this month.
When it comes to AI, Musk has in recent years been a vocal critic of Altman, a former friend and colleague. The pair helped form OpenAI as a research lab in 2015, but Musk later had a public break with the project and has consistently criticized its structure and close alliance with Microsoft.
While xAI has been building its commercial efforts, acquiring Musk’s social media company X in March and this week partnering with Telegram to roll out its Grok chatbot, Musk has been trying to thwart OpenAI’s effort to convert into a for-profit entity.
Musk has sued OpenAI for breach of contract and to try and stop the conversion, and a Musk-led investor group made an unsuccessful bid to buy control of the startup for $97.4 billion in February.
It’s also not the first time Musk has been critical of Stargate.
In January, Trump unveiled the Stargate project, with OpenAI, Oracle and Softbank committing an initial $100 billion, and up to $500 billion, of investment in AI infrastructure in the U.S. over four years. Musk was quick to cast doubt on the financing behind the project.
“They don’t actually have the money,” Musk wrote in response to an OpenAI post on his social platform X. He later added that SoftBank had “well under” $10 billion secured.
Two months later, SoftBank led a $40 billion investment in OpenAI at a $300 billion valuation.
— CNBC’s Eamon Javers contributed to this report.
WATCH: Elon Musk tried to block Sam Altman’s big AI deal in the UAE
A Dell Technologies sign is seen in Round Rock, Texas, on June 2, 2023.
Brandon Bell | Getty Images
Shares of Dell Technologies rose on Thursday in extended trading after the company raised its full-year earnings forecast and issued a stronger-than-expected forecast for the current quarter.
However, Dell’s adjusted earnings per share came up short versus LSEG estimates on in-line revenue.
Here’s how the computer maker did versus LSEG consensus estimates:
- Earnings per share: $1.55 adjusted vs. $1.69 estimated
- Revenue: $23.38 billion vs. $23.14 billion estimated
Dell said it expects $2.25 in adjusted earnings per share for the current quarter, with between $28.5 billion and $29.5 billion in revenue. That was significantly higher than LSEG expectations.
Company officials attributed the strong guidance to $7 billion in artificial intelligence systems that are expected to ship during the quarter, which are higher-margin than other Dell systems.
For the full year, Dell still expects about $103 billion in revenue, in line with LSEG expectations, but it raised its forecast for full-year adjusted earnings to $9.40, which was a 10 cent increase from the company’s prior outlook.
Dell is one of Nvidia’s primary vendors that builds systems around the chipmaker’s AI graphics processing units. Dell said on Thursday that it was seeing “unprecedented demand” for AI systems, especially for second-tier cloud providers, such as Coreweave.
Texas-based Dell said that it has $14.4 billion in confirmed orders for AI systems in its backlog that will ship in the coming quarters. It recorded $12.1 billion in confirmed AI orders during the first quarter, the company said. These numbers will turn into recorded revenue when Dell ships the system to its clients. In February, Dell said it expected $15 billion in AI server sales during its fiscal 2026, up from $10 billion last year.
Overall, Dell’s revenue grew 5% on an annual basis. It said it expects revenue to grow 8% during the fiscal year.
Dell’s server business is reported as part of its Infrastructure Solutions Group, which had $10.3 billion in sales during the quarter, a 12% rise. Of that, $6.3 billion was sales for servers and networking, and $4 billion was for computers that store data.
The company’s laptop and PC business, its Client Solutions Group, recorded $12.5 billion in sales as the global PC market is expected to recover this year after several slumping years.
The computer maker also said it significantly stepped up its shareholder capital return during the quarter, spending $2.4 billion on share repurchases and dividends during the period. It spent $2.58 billion on share repurchases for all of its fiscal 2025, which ended in January.
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