Who’s To Blame for the Silicon Valley Bank Mess? The Internet Investigates

Lon Harris
Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.
Who’s To Blame for the Silicon Valley Bank Mess? The Internet Investigates
Evan Xie

This is the web version of dot.LA’s daily newsletter. Sign up to get the latest news on Southern California’s tech, startup and venture capital scene.

Since the collapse of SVB, federal regulators have guaranteed that SVB depositors won’t suffer any losses. For now, it seems the immediate threat of contagion has passed, as regional bank stocks started to rebound following a Monday sell-off. As Silicon Valley Bank announced its new name, Silicon Valley Bridge Bank, and FDIC-appointed president Tim Mayopoulos urged former customers to consider returning with at least some of their funds, the media and technology pundits have started to refocus their attention elsewhere.

There’s naturally a whole active debate about whether or not the federal government’s intervention in SVB technically meets the definition of a “bailout.” But the real post-SVB fallout discussion, at least so far, has pivoted to, who specifically is to blame for SVB’s downfall? A number of potential suspects have been identified and held up for scorn and ridicule.


Suspect #1: The Bank Itself

Many fingers are pointing back to SVB itself and the bank’s core business model. By design, the bank served corporate deposits as opposed to retail customers. With more of its total deposits in the hands of fewer customers – and with many of those customers listening to the same venture capitalists, thought-leaders and prominent investors – it’s easier to trigger a run than at a more conventional bank. One former SVB employee, speaking anonymously with CNN, theorized that the bank’s public acknowledgment of its dire financial situation, prior to having a solid strategy to save deposits, was the killing blow.

The bank’s strategy proved particularly risky in the current economic landscape. A post-pandemic startup boom left SVB flush with cash; with deposits up 86% in 2021, it was bringing in money faster than it could lend it out. Their solution was to put the bulk of the funds into Treasuries and 30-year mortgages. Now in 2023, with interest rates at a 15-year high in an effort to tamp down inflation, and venture capital drying up amid recession fears, deposits fell just as SVB’s assets also tumbled in value. This dire combination then led to panic among investors.

Famed investor Michael Burry – he’s the guy played by Christian Bale in “The Big Short” – blasted SVB on Sunday for taking “stupid risks” based on “hubris and greed.” The bank has already been hit by a shareholder securities-fraud lawsuit, accusing management of failing to warn customers about its risky business model.

Suspect #2: The Government

And though President Biden noted in his remarks that the bank’s management will lose their jobs, Democrats have perhaps unsurprisingly singled out former President Trump as the chief culprit. Many on the left are pointing to Trump’s deregulation of the banking industry that was lobbied for, in large part, by former SVB CEO Becker. The former president, backed by Republican majorities in Congress (along with several aisle-jumping Dems), passed a new law in 2018 allowing mid-sized banks like SVB to avoid some of the regulations that were put in place following the ‘08 financial crisis. Had this law not passed, SVB would have been subjected to stricter oversight and more regulations that might have slowed or prevented its implosion. Biden called on Congress to strengthen the banking regulations and roll back some of the 2018 changes to the law.

Despite the regulatory rollback, other pundits and officials are nonetheless still blaming federal regulators and noting that there was ample time to alert the public to the dangers of SVB’s investment plans. Former Treasury official and economist Aaron Klein explained on “Meet the Press” on Sunday that the Fed had given SVB “a clean bill of health,” failing to protect their customers.

Suspect #3: Crypto

But these accusations are really just the beginning of the finger-pointing, as just about every stakeholder in tech, the media, and the economy sound off this week about who they think is to blame. Crypto advocates blamed inherent flaws in centralized banking and fiat currency more generally, while others pointed to the collapse of the crypto market and the FTX exchange as setting the stage for the SVB crisis.

Suspect #4: The Media

Reporters were accused of overhyping the story, or getting caught up in predictions about what might happen rather than “sticking to the facts.” Social media also took some abuse in the aftermath of SVB’s fall. Twitter wasn’t yet a concern during the last financial crisis; the argument goes that panicky all-caps tweets helped to set the stage for a physical bank run in the real world.

Suspect #5: Wokeness

Meanwhile, right-wing firebrands and Wall Street Journal columnists went after their favorite scapegoats: Obama and the abstract concept of “wokeness.” In WSJ, Andy Kessler cited a 2022 proxy statement from SVB noting that its board was made up of 45% women, along with two veterans and members of the Black and LGBTQ+ communities, arguing that the bank was apparently “distracted by diversity demands.” On his Fox News show, Carlson blamed the Obama administration, which made bank management “increasingly incompetent” by imposing “diversity, equity and inclusion standards” on the financial industry.

Suspect #6: Venture Capital

According to Business Insider, some venture capitalists are even blaming one another for stoking the fears that ultimately led to SVB’s collapse. Upfront Ventures managing partner Mark Suster compared feverish VC and investor tweets warning about trouble last week to the classic example of patrons shouting “fire” in a movie theater. Others disagreed; as one VC firm leader told Forbes, “you don’t blame the customer for taking money out of the bank.”

Obviously, identifying the key issues that led to the SVB collapse matters, as it helps everyone to avoid the same pitfalls next time with the next bank. Still, the next few steps seem relatively clear: protect SVB depositors in the short-term, restore some of the post-2008 crisis regulations that might’ve helped prevent a full-blown crisis, and maybe exercise a bit more caution before tweeting that the levees have broken and it’s time to head for high ground. With that in mind, it’s hard not to see at least some of the finger-pointing not as constructive criticism but everyone’s favorite form of emergency PR: crisis management. What we potentially have here is a large group of people who feel implicated, and thus want to suggest that the problems all started with someone, anyone, else.

Subscribe to our newsletter to catch every headline.

A Strong Finish to 2024 for LA Tech: Crosscut Ventures Leads the Way

🔦 Spotlight

Happy Friday LA!

As we close the book on 2024, Los Angeles has had a remarkable year in tech and venture capital. From groundbreaking funding rounds to industry-defining innovations, the city’s tech ecosystem has showcased its ability to adapt and thrive. Among the year’s final highlights was the announcement that Crosscut Ventures, one of LA’s premier early-stage venture capital firms, has added Jon Ylvisaker as its newest Partner.

Crosscut Ventures’ Bold New Direction

Announced in late December, Jon Ylvisaker’s appointment reflects Crosscut Ventures’ commitment to advancing its focus on the energy transition. Ylvisaker brings decades of experience in driving investments in energy technologies and digital infrastructure. As the founding partner and managing director of Yield Capital Partners, he led investments in startups and established companies shaping the future of sustainability. At Wolfacre Global Management, a Tiger Management hedge fund, he further honed his expertise in supporting impactful climate-focused solutions.

Brian Garrett, Managing Director and Co-Founder of Crosscut Ventures, said, “Jon's extensive experience in climate and digital infrastructure investments, coupled with his impressive track record of bringing groundbreaking technologies to market, makes him the ideal partner to help lead our focus.”

Since its founding in 2008, Crosscut has played a key role in shaping LA’s tech landscape. Ylvisaker’s addition reinforces the firm’s commitment to addressing global challenges like energy transition and sustainability, further solidifying its leadership in venture capital innovation.

What’s Next for LA Tech in 2025

The momentum from 2024 has set the stage for an even bigger year ahead. Entrepreneurs, investors, and innovators in LA are poised to take on new challenges and create meaningful change across industries.

As we step into 2025, we want to thank everyone who helped make 2024 such a standout year. Here’s to another year of progress, innovation, and success. From all of us at dot.LA, Happy New Year!

🤝 Venture Deals

LA Companies

  • First Resonance, a company specializing in digital manufacturing software through its ION Factory OS, has raised a $20M funding round led by Third Prime with participation from Blue Bear Capital and others. This brings its total funding to $36M and will be used to accelerate product development, grow its customer base, and enhance support for advanced manufacturing sectors like aerospace, robotics, and clean energy. - learn more
LA Venture Funds
  • Finality Capital Partners led a $17M Seed funding round for ChainOpera AI, a California-based company developing blockchain networks for AI-powered agents and applications, to accelerate product development, expand its team and enhance its blockchain and AI integration capabilities. - learn more

LA Exits

  • Thirteen Lune, an inclusive beauty e-commerce platform, has been acquired by SNR Capital, marking a significant milestone in the platform's mission to amplify underrepresented beauty brands while fueling its next stage of growth. - learn more
  • Ergobaby, a leading brand in juvenile products known for its high-quality baby carriers, has been acquired by Highlander Partners. The acquisition aims to bolster Ergobaby’s growth, expand its product offerings, and strengthen its position in the parenting solutions market. - learn more

Download the dot.LA App

Salt AI’s $3M Bet, Snapchat’s Creator Cash, Rivian’s EV Tech, and ŌURA’s $200M Win

🔦 Spotlight

Happy Friday, LA - let’s dive right in to this week’s highlights:

Salt AI, a forward-thinking AI startup based in Los Angeles, has secured a $3 million seed funding round led by Morpheus Ventures with participation from Struck Capital, among others, to tackle the complexity of managing workflows.Salt AI's blog details how its platform centralizes tools like CRM systems, project management software, and data trackers into one interface, eliminating inefficiencies and freeing up teams to focus on meaningful work. With new funding in hand, Salt plans to scale its platform and expand its reach, a move that underscores how AI can solve everyday business challenges.

Image Source: Salt AI - Aber Whitcomb

While Salt AI focuses on the workplace, Snapchat is doubling down on creators, with its latest updates introducing revenue-sharing opportunities and direct monetization features. The company’snewsroom update outlines how enhanced analytics will help creators better understand their audiences and sustain their work. The platform's latest updates introduce revenue-sharing opportunities and direct monetization features, along with analytics that give creators deeper insights into their audience. By making it easier for creators to grow and sustain their work, Snapchat positions itself as a key player in the creator economy, offering features that rival platforms like YouTube and TikTok.

Image Source: Snap

On the roads, Rivian is redefining what it means to drive an electric vehicle. The company’s latest software update includes advanced route planning, energy management tools, and customization options that make every trip more intuitive and efficient. Additionally, Rivian has introduced new entertainment features, including Google Cast, YouTube, and SiriusXM, as featured in Rivian’ssoftware spotlight, enhancing the in-cabin experience for drivers and passengers alike. This isn’t just about convenience; Rivian is showing how thoughtful software design can elevate the entire EV experience, blending practicality with sophistication.

Image Source: Rivian

ŌURA is making headlines with a fresh $200 million Series D funding round, with participation from Fidelity Management & Research Company and Dexcom, which now values the company at $2.55 billion. This investment, as reported byBusiness Wire, highlights the growing demand for wearable health technology and positions ŌURA as a leader in the space. With its sleek design and emphasis on actionable health insights, the funding will enable ŌURA to expand its reach and further integrate wearables into daily health management, strengthening its position in the competitive health tech market. With this funding, ŌURA aims to reach more users and expand its capabilities, further embedding wearables into daily health management.

Image Source: ŌURA

Stay tuned as Salt AI, Snapchat, Rivian, and ŌURA continue to evolve, offering us new ways to work, connect, and live better.

🤝 Venture Deals

    LA Venture Funds
      • Undeterred Capital participated in a $7M Seed funding round for Portal, a Watertown, Mass.-based biotech company specializing in advanced intracellular delivery technology to drive innovations in biological research and cellular therapeutics. - learn more
      • Vamos Ventures participated in a $7.9M Series A funding round for Culina Health, a Hoboken, NJ-based company that provides personalized, science-based virtual nutrition care by connecting patients with registered dietitians, with plans to use the funds to expand its offerings for dietitians and patients, implement AI-driven tools to enhance care efficiency, and strengthen its leadership team through key hires. - learn more
      • Humans Ventures participated in a $3.8M Seed funding round for Hamming.ai, a San Francisco-based company specializing in automated tools for testing and optimizing voice agents, with plans to expand its platform, enhance reliability and perform, and accelerate product development. - learn more
      • Fifth Wall led, with participation from Starshot Capital and others, in a $9.5M Series A funding round for Mojave, a Sunnyvale, CA-based company developing energy-efficient commercial air conditioning technology. The funds will be used to accelerate the adoption of its innovative systems and reduce energy consumption in the cooling industry. - learn more
      • ReMY Investors participated in a $17M Series B funding round for Scripta Insights, a company that leverages data analytics to help employers and healthy plans reduce prescription drug costs, with the funds aimed at expanding its platform and scaling operations. - learn more
      • Mantis VC participated in a $16.5M funding round for Nuon, a company specializing in Bring Your Own Cloud (BYOC) solutions that streamline AI, data, and infrastructure software deployment. The funds will support product development, readiness for general availability in 2025, and efforts to expand customer acquisition. - learn more
      • B Capital participated in a $102M Series C funding round for Precision, a company developing minimally invasive brain-computer interfaces to treat neurological disorders, with plans to use the funds to expand its team, advance clinical research, and refine its AI-powered brain implant for helping users with severe paralysis operate digital devices using their thoughts. - learn more
      • The Games Fund led a $3M Seed funding round for Dark Passenger, a Poland-based game studio founded by veterans of The Witcher 3 and Cyberpunk 2077, to create an unannounced, innovative, first-person multiplayer PvPvE stealth-action game set in a distinctive universe inspired by feudal Japan and martial arts cinema. - learn more

          LA Exits

          • Calliope Networks, a generative AI company providing licensed media content like movies, TV shows, and news, has been acquired by Protege to strengthen its platform’s capabilities in advancing AI development. - learn more

              Download the dot.LA App

              Momentum in Motion: IPOs, Partnerships, and Innovation

              🔦 Spotlight

              Happy Friday, Los Angeles!

              Last week, we dove into some of the major moves shaping LA’s tech scene, from ServiceTitan’s IPO ambitions to Anduril’s AI advancements. This week, the story continues with new milestones and updates that reveal how quickly the landscape is evolving. Here’s what’s happening now:

              ServiceTitan’s IPO: A Fintech Spark

              ServiceTitan’s initial public offering has proven to be a resounding success.The Glendale-based company priced its IPO at $71 per share, significantly above the anticipated range of $52 to $57. On its first trading day, shares opened at $101 and closed at $101.20, marking a 43% increase and valuing the company at nearly $9 billion. This impressive debut underscores ServiceTitan’s growing influence in the trades software space and signals a potential trend for other fintech leaders to watch closely. Read more about ServiceTitan's IPO success here.

              Anduril Industries: Expanding the Horizon

              We recently covered Anduril’s groundbreaking partnership with OpenAI, emphasizing the growing role of AI in defense. This week, Anduril continues to make headlines with new developments and collaborations that underscore its commitment to reshaping national security and autonomous technology:

              • Partnership with Palantir:Anduril and Palantir are teaming up to accelerate AI capabilities in defense. Together, they aim to integrate Palantir’s advanced data analytics with Anduril’s autonomous systems, creating a platform capable of delivering actionable intelligence in real time. This partnership is expected to enhance battlefield decision-making, reduce operational risks, and maintain U.S. leadership in defense technologies. Read more about the partnership here.
              • Dive XL Autonomous Submarine: Anduril’s Dive XL submarine is setting new standards for maritime autonomy. This long-endurance unmanned vehicle can operate in harsh underwater environments for extended periods, providing capabilities for intelligence gathering, surveillance, and reconnaissance. With its modular design, Dive XL supports a range of payloads, making it a versatile asset for maritime security. Learn more about Dive XL here.
              • Archer VTOL Aircraft Partnership: Anduril’s collaboration with Archer Aviation is pushing the boundaries of autonomous flight technology. This partnership leverages Archer’s expertise in vertical takeoff and landing (VTOL) aircraft to complement Anduril’s advanced defense systems. By integrating Anduril’s cutting-edge AI capabilities with Archer’s innovative designs, the companies aim to create next-generation solutions for tactical military operations. This partnership reflects a shared commitment to innovation and positions both companies as leaders in reshaping the future of aerial defense. Details about the partnership are available here.

              Writers Guild Challenges AI in Hollywood

              The Writers Guild of America (WGA) continues its efforts to address the growing influence of AI in entertainment. In recent negotiations, the Guild has pushed for clear boundaries on the use of generative AI in scriptwriting, emphasizing the need to protect writers’ rights and creative integrity. As the industry grapples with the implications of this technology, the WGA’s stance highlights an ongoing effort to balance innovation with fairness in Hollywood. Read more about the Guild’s actions here.

              Our thoughts are with the residents of Malibu as they face wildfires fueled by Santa Ana winds, which have displaced many and disrupted communities, including Pepperdine University. For resources during emergencies, explore ourguide to the top tech apps for natural disasters, highlighting tools to support preparation and safety.

              From tech breakthroughs to creative industry challenges, the region’s innovation engine shows no signs of slowing. As 2024 approaches, one thing is clear: the momentum isn’t slowing down.


              ✨ Featured Event ✨

              2024 PledgeLA Catalyst Awards

              Image Source: Instagram: PledgeLA

              Catalyst Awards to Honor Inspiring Entrepreneurs and Emerging Managers in Venture Capital, Catalysts Improving Access to Capital Across Los Angeles

              PRINCIPALS AND HOSTS: The Annenberg Foundation and PledgeLA, the initiative launched in 2018 by the Annenberg Foundation and the City of Los Angeles to promote equity and increase access to capital for L.A.-based startups and investors from underrepresented backgrounds.

              WHEN: Wednesday, December 18, 2024 at 5:30 p.m. PST.

              WHERE: Register to See Address Los Angeles, California

              RSVP HERE

              🤝 Venture Deals

                LA Venture Funds
                  • Alpha Edison led a $27M Series A funding round, joined by Acre Venture Partners, ReMY, among others, for One Bio, a UC Davis spinoff based in California that is developing biotech solutions to bridge the dietary fiber gap, with plans to scale production and expand its product offerings. - learn more
                  • Gideon Strategic Partners participated in a $110M Series C funding round for Capstan Medical, a Santa Cruz-based company developing robotics technology for heart disease treatment, with the funds aimed at advancing clinical trials and preparing for commercialization. - learn more
                  • Riot Ventures led a $10.1M Seed funding round for Deterrence, a company developing automated solutions for energetics production, including explosives and propellants, with participation from Impatient Ventures and others, to scale its technology, improve manufacturing efficiency, and meet growing industry demands. - learn more
                  • Chapter One Ventures participated in a $12M Series A funding round for Hyperbolic, a San Francisco-based AI company specializing in predictive analytics for supply chain optimization, with plans to use the funds to enhance its technology platform and expand its team. - learn more
                  • Blue Bear Capital participated in a $35M Series C financing round for Raptor Maps, a Boston-based company that provides software solutions for solar asset management. The funds will be used to enhance their AI-driven platform, expand global operations, and support the growing needs of the renewable energy industry. - learn more
                  • Behind Genius Ventures and Night Ventures, among others, participated in a $3M Pre-Seed funding round for Moldco, a Boston-based company providing digital, evidence-based care, treatments, and lab testing to help individuals reclaim their health from mold toxicity, with plans to use the funds to expand operations nationwide in 2025. - learn more,
                  • Regeneration.VC co-led a €8M Series A funding round for Orbisk, a Netherlands-based company that develops AI-powered food waste monitoring systems for the hospitality industry, with plans to use the funds to expand internationally and enhance their technology platform - learn more
                  • Mucker Capital participated in a $17M Series A funding round for Ask Sage, an Arlington, VA-based company offering a generative AI platform for government and commercial sectors, with plans to use the funds to expand its AI capabilities, drive growth, and increase its workforce. - learn more
                  • Magnify Ventures participated in a $8M Series A funding round for MiSalud Health, digital health platform offering affordable, same-day bilingual telehealth consultations in Spanish and English to better serve Hispanic communities in the U.S. and Mexico. With a focus on improving access for Spanish-speaking individuals, the company aims to address the growing demand for culturally and linguistically appropriate healthcare solutions as the Hispanic population continues to expand rapidly in the U.S.. - learn more

                    LA Exits

                    • Elios Vision, a company specializing in innovative glaucoma treatment technologies, has been acquired by Bausch + Lomb to strengthen its portfolio in addressing the needs of glaucoma patients. The acquisition brings Elios Vision's cutting-edge solutions into Bausch + Lomb's comprehensive eye health offerings, expanding its capabilities to provide advanced care for this critical condition. - learn more
                    • OceanX, a provider of subscription-focused fulfillment and logistics solutions, has been acquired by Cart.com to enhance its end-to-end e-commerce platform and expand its capabilities in subscription management and order fulfillment. - learn more

                      Download the dot.LA App

                      RELATEDEDITOR'S PICKS
                      LA TECH JOBS
                      interchangeLA
                      Trending