SVB collapse sends 'wake up call' to UK VCTs and start-ups

Need to have cash ‘diversified’

The blow-up of Silicon Valley Bank and the rapid buyout from HSBC should act as a “wake up call” to all businesses, and start-ups especially, to make sure their cash is diversified across several banks.

This was according to Alex Davies, CEO and founder of Wealth Club, which specialises in funding for UK start-ups. The breakdown of the US bank would not have a material effect on the value of the companies that bank with SVB UK following its acquisition by HSBC, he told Investment Week, but the saga will drive investors in these types of firms to carefully consider the risks. "Although this crisis was to do with the bank rather than the start-ups themselves, investors should always remember that investing particularly in early-stage businesses is risky; therefore you should not invest...