SVB collapse is double-whammy for tech startups already navigating brutal market
ChartHop CEO Ian White
ChartHop
ChartHop CEO Ian White breathed a major sigh of relief in late January after his cloud software startup raised a $20 million funding round. He’d started the process six months earlier during a brutal period for tech stocks and a plunge in venture funding.
For ChartHop’s prior round in 2021, it took White less than a month to raise $35 million. The market turned against him in a hurry.
“There was just a complete reversal of the speed at which investors were willing to move,” said White, whose company sells cloud technology used by human resources departments.
Whatever comfort White was feeling in January quickly evaporated last week. On March 9 — a Thursday — ChartHop held its annual revenue kickoff at the DoubleTree by Hilton Hotel in Tempe, Arizona. As White was speaking in front of more than 80 employees, his phone was blowing up with messages.
White stepped off stage to find hundreds of panicked messages from other founders about Silicon Valley Bank, whose stock was down more than 60% after the firm said it was trying to raise billions of dollars in cash to make up for deteriorating deposits and ill-timed investments in mortgage-backed securities.
Startup executives were scrambling to figure out what to do with their money, which was locked up at the 40-year-old firm long known as a linchpin of the tech industry.
“My first thought, I was like, ‘this is not like FTX or something,'” White said of the cryptocurrency exchange that imploded late last year. “SVB is a very well-managed bank.”
But a bank run was on, and by Friday SVB had been seized by regulators in the second-biggest bank failure in U.S. history. ChartHop banks with JPMorgan Chase, so the company didn’t have direct exposure to the collapse. But White said many of his startup’s customers held their deposits at SVB and were now uncertain if they’d be able to pay their bills.
While the deposits were ultimately backstopped last weekend and SVB’s government-appointed CEO tried to reassure clients that the bank was open for business, the future of Silicon Valley Bank is very much uncertain, further hampering an already troubled startup funding environment.
SVB was the leader in so-called venture debt, providing loans to risky early-stage companies in software, drug development and other areas like robotics and climate-tech. Now it’s widely expected that such capital will be less available and more expensive.
White said SVB has shaken the confidence of an industry already grappling with rising interest rates and stubbornly high inflation.
Exit activity for venture-backed startups in the fourth quarter plunged more than 90% from a year earlier to $5.2 billion, the lowest quarterly total in more than a decade, according to data from the PitchBook-NVCA Venture Monitor. The number of deals declined for a fourth consecutive quarter.
In February, funding was down 63% from $48.8 billion a year earlier, according to a Crunchbase funding report. Late-stage funding fell by 73% year-over-year, and early-stage funding was down 52% over that stretch.
‘World was falling apart’
CNBC spoke with more than a dozen founders and venture capitalists, before and after the SVB meltdown, about how they’re navigating the precarious environment.
David Friend, a tech industry veteran and CEO of cloud data storage startup Wasabi Technologies, hit the fundraising market last spring in an attempt to find fresh cash as public market multiples for cloud software were plummeting.
Wasabi had raised its prior round a year earlier, when the market was humming, IPOs and special purpose acquisition companies (SPACs) were booming and investors were drunk on low interest rates, economic stimulus and rocketing revenue growth.
By last May, Friend said, several of his investors had backed out, forcing him to restart the process. Raising money was “very distracting” and took up more than two-thirds of his time over nearly seven months and 100 investor presentations.
“The world was falling apart as we were putting the deal together,” said Friend, who co-founded the Boston-based startup in 2015 and previously started numerous other ventures including data backup vendor Carbonite. “Everybody was scared at the time. Investors were just pulling in their horns, the SPAC market had fallen apart, valuations for tech companies were collapsing.”
Friend said the market always bounces back, but he thinks a lot of startups don’t have the experience or the capital to weather the current storm.
“If I didn’t have a good management team in place to run the company day to day, things would have fallen apart,” Friend said, in an interview before SVB’s collapse. “I think we squeaked through, but if I had to go back to the market right now and raise more money, I think it’d be extremely difficult.”
In January, Tom Loverro, an investor with Institutional Venture Partners, shared a thread on Twitter predicting a “mass extinction event” for early and mid-stage companies. He said it will make the 2008 financial crisis “look quaint.”
Loverro was hearkening back to the period when the market turned, starting in late 2021. The Nasdaq hit its all-time high in November of that year. As inflation started to jump and the Federal Reserve signaled interest rate hikes were on the way, many VCs told their portfolio companies to raise as much cash as they’d need to last 18 to 24 months, because a massive pullback was coming.
In a tweet that was widely shared across the tech world, Loverro wrote that a “flood” of startups will try to raise capital in 2023 and 2024, but that some will not get funded.
Federal Reserve Chair Jerome Powell arrives for testimony before the Senate Banking Committee March 7, 2023 in Washington, DC.
Win Mcnamee | Getty Images News | Getty Images
Next month will mark 18 months since the Nasdaq peak, and there are few signs that investors are ready to hop back into risk. There hasn’t been a notable venture-backed tech IPO since late 2021, and none appear to be on the horizon. Meanwhile, late-stage venture-backed companies like Stripe, Klarna and Instacart have been dramatically reducing their valuations.
In the absence of venture funding, money-losing startups have had to cut their burn rates in order to extend their cash runway. Since the beginning of 2022, roughly 1,500 tech companies have laid off a total of close to 300,000 people, according to the website Layoffs.fyi.
Kruze Consulting provides accounting and other back-end services to hundreds of tech startups. According to the firm’s consolidated client data, which it shared with CNBC, the average startup had 28 months of runway in January 2022. That fell to 23 months in January of this year, which is still historically high. At the beginning of 2019, it sat at under 20 months.
Madison Hawkinson, an investor at Costanoa Ventures, said more companies than normal will go under this year.
“It’s definitely going to be a very heavy, very variable year in terms of just viability of some early-stage startups,” she told CNBC.
Hawkinson specializes in data science and machine learning. It’s one of the few hot spots in startup land, due largely to the hype around OpenAI’s chatbot called ChatGPT, which went viral late last year. Still, being in the right place at the right time is no longer enough for an aspiring entrepreneur.
Founders should anticipate “significant and heavy diligence” from venture capitalists this year instead of “quick decisions and fast movement,” Hawkinson said.
The enthusiasm and hard work remains, she said. Hawkinson hosted a demo event with 40 founders for artificial intelligence companies in New York earlier this month. She said she was “shocked” by their polished presentations and positive energy amid the industrywide darkness.
“The majority of them ended up staying till 11 p.m.,” she said. “The event was supposed to end at 8.”
Founders ‘can’t fall asleep at night’
But in many areas of the startup economy, company leaders are feeling the pressure.
Matt Blumberg, CEO of Bolster, said founders are optimistic by nature. He created Bolster at the height of the pandemic in 2020 to help startups hire executives, board members and advisers, and now works with thousands of companies while also doing venture investing.
Even before the SVB failure, he’d seen how difficult the market had become for startups after consecutive record-shattering years for financing and an extended stretch of VC-subsidized growth.
“I coach and mentor a lot of founders, and that’s the group that’s like, they can’t fall asleep at night,” Blumberg said in an interview. “They’re putting weight on, they’re not going to the gym because they’re stressed out or working all the time.”
VCs are telling their portfolio companies to get used to it.
Bill Gurley, the longtime Benchmark partner who backed Uber, Zillow and Stitch Fix, told Bloomberg’s Emily Chang last week that the frothy pre-2022 market isn’t coming back.
“In this environment, my advice is pretty simple, which is — that thing we lived through the last three or four years, that was fantasy,” Gurley said. “Assume this is normal.”
Laurel Taylor recently got a crash course in the new normal. Her startup, Candidly, announced a $20.5 million financing round earlier this month, just days before SVB became front-page news. Candidly’s technology helps consumers deal with education-related expenses like student debt.
Taylor said the fundraising process took her around six months and included many conversations with investors about unit economics, business fundamentals, discipline and a path to profitability.
As a female founder, Taylor said she’s always had to deal with more scrutiny than her male counterparts, who for years got to enjoy the growth-at-all-costs mantra of Silicon Valley. More people in her network are now seeing what she’s experienced in the six years since she started Candidly.
“A friend of mine, who is male, by the way, laughed and said, ‘Oh, no, everybody’s getting treated like a female founder,'” she said.
CORRECTION: This article has been updated to show that ChartHop held its annual revenue kickoff at the DoubleTree by Hilton Hotel in Tempe, Arizona, on Thursday, March 9.
WATCH: Cash crunch could lead to more M&A and quicker tech IPOs
Justin McLeod speaks during the Fast Company Innovation Festival 2025 on Sept. 18, 2025 in New York City.
Eugene Gologursky | Getty Images
Hinge founder Justin McLeod is stepping down as CEO of the dating app to launch a dating service powered by artificial intelligence.
McLeod will be replaced by Jackie Jantos, the dating app’s president and chief marketing officer, Hinge parent company Match Group announced on Tuesday.
“The company’s momentum, including being on track to reach $1 billion in revenue by 2027, gives me full confidence in where Hinge is headed,” said McLeod in a statement. He created the dating app in 2011.
McLeod will remain as an advisor to Hinge through March. Overtone, his new venture, will use AI and voice tools to “help people connect in a more thoughtful and personal way,” according to the announcement.
Along with a dedicated team, McLeod spent much of this year developing the startup with support from Match Group, which said it plans to lead Overtone’s initial funding round in early 2026.
Match Group, which also owns Tinder and various other dating apps, will hold a significant ownership position in Overtone. Match Group CEO Spencer Rascoff will join Overtone’s board.
“We’re proud to have incubated Overtone within Hinge and to now lead its funding round as he builds his next venture,” Rascoff said in a statement.
WATCH: Software could start benefitting from AI in 2026, says Intelligent Alpha CEO Doug Clinton
Oracle CEOs Clay Magouyrk and Mike Sicilia sit down with CNBC’s David Faber on Oct. 13, 2025.
CNBC
It’s been a rollercoaster year for Oracle investors, as they try to assess the strength of the software giant’s position in the artificial intelligence boom.
The stock is up more than 30% for the year even after a 23% plunge in October, which was its worst month since 2001. It’s recovered a bit in November, climbing almost 10% for the month as of Tuesday.
Heading into the company’s fiscal second-quarter earnings report on Wednesday, pressure is building on management — and newly installed CEOs Clay Magouyrk and Mike Sicilia — to show that Oracle can continue to finance the company’s aggressive infrastructure plans while simultaneously convincing Wall Street that the AI-fueled hypergrowth story remains intact.
In recent months, Oracle has emerged as a more central player in AI, largely due to a $300 billion deal with OpenAI, which came to light in September, an agreement that involves the AI startup buying computing power over about five years, starting in 2027.
Funding Oracle’s compute buildout is going to require mounds of debt. In late September, Oracle raised $18 billion in a jumbo bond sale, one of the largest debt issuances on record in the tech industry, and the company is now the biggest issuer of investment grade debt among non-financial firms, according to Citi.
“There is something inherently uncomfortable as a credit investor about the transformation of the sort we’re facing that is going to require an enormous amount of capital,” Daniel Sorid, head of U.S. investment grade credit strategy at Citi, said on a video call to investors on Friday, a replay of which was provided to reporters.
Oracle has secured billions of dollars of construction loans through a consortium of banks tied to data centers in New Mexico and Wisconsin. Citi analyst Tyler Radke estimates Oracle will raise roughly $20 billion to $30 billion in debt every year for the next three years.
As of August, the company’s combined short-term and long-term debt, which includes lease obligations, sat at $111.6 billion, up from $84.5 billion a year earlier, according to FactSet, while cash and equivalents slipped over that stretch to $10.45 billion from $10.6 billion.
As Oracle aims to build out sufficient capacity to meet the rising demand its seeing from customers like OpenAI, the street is questioning whether company will tap sources other than the debt market.
“Oracle will be looking at all options out there — off-balance sheet facilities, raising debt, issuing equity or perhaps exploring interest from a foreign investor, i.e. a sovereign wealth fund,” said Rishi Jaluria, a software analyst at RBC Capital Markets, in an interview. Jaluria recommends holding the stock.
A credit investor who spoke to CNBC highlighted Meta’s $27 billion deal with Blue Owl Capital, a joint venture between the two entities, as one type of financing arrangement being used for AI data center development.
The market is also debating whether Oracle can use vendor financing options to reduce the amount of upfront capital required to stand up data centers, including securing favorable financing terms with suppliers like Nvidia, a credit investor told CNBC. However in that scenario, Nvidia’s chips would be used as collateral, raisings concerns around GPU depreciation.
An Oracle spokesperson declined to comment.
Growing skepticism
The discomfort that Sorid referenced has driven Oracle’s 5-year credit default swaps to new multi-year highs. Credit default swaps are like insurance for investors, with buyers paying for protection in case the borrower can’t repay its debt. Bond investors told CNBC that they’ve become a popular way to hedge the risk tied to the AI trade.
Credit analysts at Barclays and Morgan Stanley are recommending clients buy Oracle’s 5-year CDS. Andrew Keches, an analyst at Barclays, told analysts in a note last month that he didn’t see an avenue for Oracle’s credit trajectory to improve. And in late November, Morgan Stanley analysts said Oracle’s CDS had attracted not just typical credit investors but “tourists” who have less experience with this type of financial instrument.
Spools of electrical wires outside a series of assembly tents during a media tour of the Stargate AI data center in Abilene, Texas, US, on Tuesday, Sept. 23, 2025. Stargate is a collaboration of OpenAI, Oracle and SoftBank, with promotional support from President Donald Trump, to build data centers and other infrastructure for artificial intelligence throughout the US.
Kyle Grillot | Bloomberg | Getty Images
Oracle’s revenue growth and backlog of business will be closely monitored as investors try to gauge whether the company’s spending plans are justified. Analysts expect to see revenue growth in the latest quarter of 15% to $16.2 billion, according to StreetAccount.
Remaining performance obligations, a measure of contracted revenue that hasn’t yet been recognized, are expected to surpass $500 billion, StreetAccount says, which would mark a more than fivefold increase from a year earlier. Oracle’s disclosure in September that RPOs jumped 359% to $455 billion sent the company’s stock up 36%, its best single-day performance since 1992.
Since then, the stock has wiped out all of those gains and then some.
Gil Luria, an analyst at D.A. Davidson, said that beyond infrastructure, he’ll be closely watching Oracle’s core database business, which is a source of much higher margins. That will help determine how much flexibility the company has in going to the capital markets, he said.
“Oracle can handle the debt load,” said Luria, who recommends holding the stock. “But they need more cash flow to raise more capital from here.”
Technology
Teachers’ union AFT slams crypto market bill, warns of ‘profound risks’ for America’s retirement plans
The American Federation of Teachers, the powerful labor union that represents 1.8 million members, is urging the Senate Banking Committee to reconsider its crypto market structure bill, the Responsible Financial Innovation Act, calling the proposed legislation “as irresponsible as it is reckless” in a letter exclusively obtained by CNBC.
In the letter that AFT president Randi Weingarten sent to Senate Banking Committee Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-Mass.), she wrote the union opposes the bill based on the “profound risks to the pensions of working families and the overall stability of the economy.”
“The legislation on crypto we have seen weighed by the committee over the last few months gives us deep concern,” Weingarten added.
The AFT is concerned that in passing crypto legislation, the government will open the floodgates to widespread fraud and unethical practices across retirement plans including AFT pensions.
“This legislation pretends that crypto assets are stable and mainstream, and they are not. Rather than just being silent on crypto, this bill strips the few safeguards that exist for crypto and erodes many protections for traditional securities. If passed, it will undercut the safety of many assets and cause problems across retirement investments,” Weingarten wrote.
A specific issue the AFT cited with the proposed legislation it allowing non-crypto companies to put their stock on the blockchain and evade existing securities regulatory framework. Wall Street has become interested in the idea of “tokenization” of all financial assets, with Larry Fink, CEO of BlackRock, the largest asset manager in the world, a leader evangelist for the concept.
“This loophole and the erosion of traditional securities law will have disastrous consequences: Pensions and 401(k) plans will end up having unsafe assets even if they were invested in traditional securities,” Weingarten wrote.
She argued that the legislation being considered by the committee also does little to curb fraud, illegal activity and corruption that continues to be prevalent in crypto markets. Weingarten called the legislation “irresponsible” and “reckless.”
“We believe that if enacted, this bill has the potential to lay the groundwork for the next financial crisis,” she wrote.
NEW YORK, NEW YORK – AUGUST 28: Randi Weingarten, president of the American Federation of Teachers (AFT), speaks during the March on Wall Street on August 28, 2025 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
The AFL-CIO, the nation’s largest labor union, stated its opposition to the Senate Banking Committee over a draft of the crypto bill in October.
CNBC also confirmed that on Thursday, the CEOs of Bank of America, Citi and Wells Fargo, will be meeting with lawmakers to discuss the crypto market structure proposals.
The currently proposed legislation, which builds on a bill that passed the House of Representatives over the summer, is co-sponsored by key crypto backer Senator Cynthia Lummis (R-Wyoming) and Senator Bernie Moreno (R-Ohio), alongside Chairman Scott. It aims to create structure for regulating digital assets, but also raises questions about tokenized securities that are not specifically cryptocurrencies.
Tokenization has been a key concern as the bill has gained momentum on Capitol Hill, and a hurdle to getting the support from Democrats that will be needed for passage. Previous CNBC reporting indicates that the Senate backers will need to attract votes from at least seven Democrats for the legislation to pass. At last week’s CNBC CFO Council Summit in Washington, D.C., Senator Mark Warner (D-Va.) told attendees, “I’m in crypto hell at this moment trying to get the market structure bill done.”
Warner is among a group of Democratic senators who met on Monday to review the Senate Banking draft and consider counter-offers, according to Politico.
Many Democrats, including Warren, have also been concerned about the balance of crypto regulatory oversight between the CFTC and the Securities and Exchange Commission. States, meanwhile, worry that their laws may be preempted by a new federal law, and the states left powerless to protect residents from fraud, a concern outlined by Massachusetts’ Secretary of State William Galvin in a letter to Senate Banking, writing that the “sweeping provisions that will exclude significant portions of the financial industry from state oversight. This is a recipe for disaster for millions of savers.”
Progress on the Senate’s version of a crypto market structure bill was stalled for weeks due to the longest government shutdown in U.S. history. Speaking on Tuesday morning at The Blockchain Association Policy Summit in Washington, D.C., Senator Lummis provided some insight into when the Senate’s version of a crypto market structure bill could be expected. She said her goal is to share a draft by the end of the week, then let the crypto industry as well as Republicans and Democrats vet it and proceed to markup next week.
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