Part 5/10:
An important nuance is that only about 2.7% of SVB’s deposits are insured by the FDIC, meaning the majority of deposits are uninsured—often from startups, venture-backed companies, and large corporations. These entities rely heavily on their deposits to fund operations and payroll. A sudden loss of access to that cash could force shutdowns, layoffs, and broader economic disruptions.
Furthermore, SVB’s significant role in the startup ecosystem—claiming relationships with over half of all U.S. venture-backed companies—amplifies the potential fallout. If startups and tech companies are unable to access their funds, it could trigger a domino effect, affecting employment and economic stability.