Techies on a plane celebrated after hearing a passenger whoop at the news SVB customers would get their money, VC says
Prashant Fonseka was on a flight when he learned that the money he deposited with SVB was safe.
Fonseka told Insider he heard other people on the plane celebrating with relief at the news.
He'd spent the weekend talking to his portfolio companies about next steps after the bank collapsed.
When Prashant Fonseka boarded his Sunday-morning flight from Austin to San Francisco, he turned off the WiFi on his phone; he wanted a break from reading about the collapse of Silicon Valley Bank.
Just two days prior, US regulators had closed the bank, which had been a Silicon Valley staple popular with venture capitalists and startups. The bank's failure was the largest in the US since Washington Mutual's crash during the 2008 financial crisis.
Fonseka, who is based in Austin, Texas, is a partner at the venture-capital firm Tuesday Capital. He told Insider that he spent Friday and Saturday trying to calm the founders of his portfolio companies. He heard that some executives in the industry were even beginning to discuss potential plans for layoffs if they couldn't get access to their deposits.
By Sunday, however, he had become more optimistic as he anticipated a response from regulators.
Prior to boarding his flight, Fonseka was on the phone trying to confirm the amount of SVB's advanced dividend, or how much money would be guaranteed to be made available to the bank's customers — other people were hoping they might be able to get 50% of their deposits, he said.
"Fifty percent for most companies would have been enough to cover payroll, which, on Friday, it was," he told Insider in a phone conversation, saying that he thought, "we're not gonna be able to make payroll next week, our banks are frozen, the world is ending."
Fonseka said that he heard two people across the aisle from him talking about SVB, so he started making small talk with them.
"We're kind of joking, 'When this flight lands, we might be in a different universe — something could change,'" Fonseka said. "Everyone was kind of anticipating some kind of announcement."
Suddenly, he heard a whoop across the aisle. Fonseka asked the person across what happened.
"Oh, there's an announcement!" Fonseka said the passenger told him, so he turned his WiFi back on and read the news: federal regulators were stepping in to guarantee SVB customers' deposits.
Fonseka said that he celebrated with a fist bump with the person next to him.
"There was enough of an energy wave that I think people were realizing something had happened," he said, talking about the commotion he heard elsewhere in the plane — The New York Times first reported details of the celebration aboard Fonseka's flight.
Fonseka said that he felt "massive relief" when his flight landed, and he caught up with another VC he recognized on his flight, who told him that he was feeling "a lot happier."
"I was like, 'I'm a lot happier too. Let's rest,'" he told Insider.
From the plane, Fonseka texted Sy Bohy, the CEO of Seam, which his firm had invested in.
"Phew," he texted.
"I'm so relieved," Bohy replied an hour later with a crying emoji.
"Before, we thought we were going to die — like extinction-level fear about people's companies," Fonseka told Insider. "Basically, we were fine."
Read the original article on Business Insider