Banking crisis leaves Utah company with lessons learned
Mar 15, 2023, 5:17 PM | Updated: 5:21 pm
(Photo by Justin Sullivan/Getty Images)
SALT LAKE CITY — A Utah seed fund, Kickstart Fund, found itself in a tough spot this week when Silicon Valley Bank collapsed. Many of the companies Kickstarts supports were left in the lurch because they banked with SVB.
General Partner of Kickstart Curt Roberts joined Dave and Dujanovic to discuss the company’s hectic week.
Roberts said leaders at the company realized there was trouble last Thursday, as news of SVB’s losses started to come it.
While there was a risk for Kickstart, Roberts said leaders were more concerned about the condition of the companies that they serve.
According to Roberts, many of the companies they support bank with SVB. Kickstart was concerned about whether or not those companies would be able to make payroll because of the collapse.
After hearing the news, Kickstart began a deep dive into its company portfolio to see who banked with SVB and how much they had in those accounts.
“We called all of those CEOs, figured out what their payroll and other bills were going to be the following week. So we knew exactly what the shortfall might be for these companies’ ability to pay their bills.”
Then, Kickstart contacted a few different banks that were creating programs to provide temporary support to companies affected by SVB’s collapse. But before they could follow through with any of those programs, the U.S. government announced that it would be stepping in.
Roberts said of all the companies he knew of — which sought transfers or to get bills paid — had their requests go through.
In the wake of the banking crisis, Roberts said Kickstart will be giving out some advice to the companies it supports.
“We’re going to be advising companies to have a diversified plan for the distribution of their deposits,” Roberts said, adding, “That amount of concentration in a single bank is risky.”
But the banking crisis doesn’t mean all faith in the system is lost.
“I’d like to say this is a one-off circumstance. It’s definitely one we need to learn from as a country and continue to sort of refine the programs around which we support these banks and support companies that trust their money in these banks,” Roberts said.
Kickstart will not be changing its attitude about banks because “it’s a necessary part of our system [and] performs critical function.”
Roberts said the crisis is a unique circumstance we all can learn from.