Startup accelerator, Y Combinator, has submitted a petition to US Treasury Secretary Janet Yellen seeking relief and attention to an immediate critical impact on small businesses, start-ups, and their employees who are depositors at the Silicon Valley Bank, after the collapse. The accelerator has backed more than 200 start-ups in India.
Garry Tan, CEO and President Y Combinator, in his petition has asked for the small business depositors at Silicon Valley Bank to be made whole. Founders and CEOs totalling more than 3,500 have signed the petition. Also, nearly 20 start-ups with a base in India are signatories.
Also read: SVB shutdown sends shockwaves through Silicon Valley as CEOs race to make payroll
“We are deeply concerned about the rapid failure of Silicon Valley Bank, which has played a vital role in supporting the technology industry in the United States. We ask for relief and attention to an immediate critical impact on small businesses, start-ups, and their employees who are depositors at the bank.(sic),” Tan wrote.
Multiple ecosystem stakeholders have told businessline that the majority of Indian SaaS companies and Y Combinator-backed start-ups had exposure to SVB and are expected to be hit by its failure.
According to reports, at least 40 YC-backed Indian start-ups have $250,000 to $1 million in deposits with SVB, while more than 20 of them have deposits of more than $1 million.
Also read: Silicon Valley Bank collapse to impact Indian start-up ecosystem: Experts
In the petition, Tan said, “We are not asking for a bailout for the bank equity holders or its management; we are asking you to save innovation in the American economy.”
In the Y Combinator community, one-third of startups with exposure to SVB used SVB as their sole bank account. As a result, they will fail to have the cash to run payroll in the next 30 days.
The petition noted that around 1 lakh jobs are expected to be impacted due to the collapse, according to a PTI report. ”If the average small business or startup employs 10 workers, this will have an immediate effect of furlough, layoff, or shut down, affecting over 100,000 jobs in the most vibrant sector of innovation in our economy,” the petition said.