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Y Combinator Estimates 1 Lakh Jobs Within Its Community At Risk Due To SV Bank Collapse
The petition seeks the attention of the government to provide relief for the immediate impact the SVB collapse has on small businesses, startups, and their employees.
New Delhi: Around 10,000 small businesses that had deposits in Silicon Valley Bank will fail to make payroll in the next 30 days and around 1 lakh jobs are expected to be impacted due to the collapse, Y Combinator said in a petition to the US government on Sunday.
In the petition to US Secretary of Treasury Janet Yellen, FDIC chairman Martin J Gruenberg and other senior government authorities, Y Combinator (YC) said that one-third of startups within its community used Silicon Valley Bank as their sole account and will fail to have the cash to run payroll in the next 30 days. (Also Read: This Restaurant Gives Free Food To Customers Over 158 Kg Weight - Read Story)
"By that measure, we can estimate that payroll-related furlough or shutdown will impact more than 10,000 small businesses and startups. If the average small business or startup employs 10 workers, this will have an immediate effect of furlough, layoff, or shut down, affecting over 100,000 jobs in the most vibrant sector of innovation in our economy," the petition said. (Also Read: Open Account With Rs 250, Get Rs 2.5 Lakh At Maturity From This Govt Scheme: Check Return Calculator, Other Details)
The petition has been signed by more than 3,500 co-founders, CEO, and over 2 lakh employees of startups and small businesses, including Indian entities such as PayO, SaveIN, and SalaryBook.
"Regulators need to conduct a backstop of depositors. We are not asking for a bank bailout," the petition said.
The petition seeks the attention of the government to provide relief for the immediate impact the SVB collapse has on small businesses, startups, and their employees.
"According to the NVCA, Silicon Valley Bank has over 37,000 small businesses with more than USD 250,000 in deposits. These balances are now unavailable to them, and without further intervention, according to the FDIC website, may be inaccessible for months to years," the petition said.
The petition raises the alarm that SVB failure has a real risk of systemic contagion and its collapse has already instilled fear among founders and management teams to look for safer havens for their remaining cash, which can trigger a bank run on every other smaller bank.
"If we allow this to happen, it will immediately impact the US technology industry and US competitiveness worldwide and ultimately set back US competitiveness by a decade or more, while the rest of the world races forward," the petition said.