SEATTLE — Friday morning the Silicon Valley Bank (SVB) collapsed, a 40-year institution known for funding tech startups.
"There's a bit of reckoning happening at the business level with the tech industry," said Hanson Hosein, who has spen years consulting and also serves as the president of HRH Media. "They got too confident and now there's a lot of pull back and it's affecting this specific industry."
"It might be something that's very focused on this industry, but because we live in Seattle and the West Coast, we're disproportionately impacted as they employ so many of our people here," said Hosein.
KING5 spoke with one Seattle tech company that on Monday was going over banking recovery logistics despite the Federal Reserve, FDIC and Treasury stepping in.
"About 50% of all venture capital is financed by, one way or another, by the SVB," said Seattle University Economist, Vladimir Dashkeev.
Dashkeev said there will be short-term impacts with businesses accessing funds and paying payroll.
When asked if this would have trickle-down effects, Dashkeev said, "It's very unlikely that this shock will create massive unemployment."
The largest bank failure in US history was Washington Mutual Bank in 2008. Dashkeev said we won't be seeing the widespread impact we saw during the housing crisis.
"We're not going to have a new push to a recession, we are not going to have a meltdown of all other adjacent markets," said Dashkeev. "It's very isolated to venture investors, they're very important to the economy."
With the failure of SVB, it could change how startups manage their portfolio.
"It's going to force a lot of these companies to get a little smarter and think more critically about where they put their money and how they make their investments," said Hosein.