After a harrowing 2022, when the easy money for start-ups dried up, leading to slashed valuations, lowered ambitions and widespread layoffs, many hoped things would bounce back this year. But SVB’s collapse has stoked even more anxiety and dread, which is beginning to manifest in start-up dealmaking throughout Silicon Valley, the New York Times reported. Late Sunday, SVB was acquired by First Citizens BancShares. The failed bank’s former parent company, SVB Financial, filed for bankruptcy on March 17 and plans to run a separate process to sell various units. Over the past two weeks, while regulators scrambled to find a buyer for SVB, companies that relied on it for lines of credit have scrambled to secure a new source of debt. Investors, wary of risk, have increasingly chosen to sit on the sidelines or are too busy helping to shore up existing start-ups to entertain new deals. And some young companies are doing what they can to avoid raising new funding so they do not have to face lower valuations, onerous terms and stringent due diligence. The result is that a chilly environment for tech start-ups has rapidly gotten chillier.
