Humanly.io, a technology startup based Seattle and Sacramento, faced uncertainty after Silicon Valley Bank failed spectacularly and quickly last week.
"It was a chaotic weekend," said Andrew Gardner, co-founder of Humanly, which had much of its money in Silicon Valley Bank. Humanly develops conversational artificial intelligence to support human resources professionals in their work.
What was uncertain from Friday to Sunday was whether deposits over the Federal Deposit Insurance Corp. insured $250,000 limit would be lost or not. About 90% of SVB's deposits were not insured.
When Humanly executives heard that Silicon Valley Bank was having problems, they tried to move money on Thursday, but the bank's systems were down.
Regulators closed the bank Friday morning. Humanly's team didn't know if much of the company's money was gone.
"We have investors and advisers who work with us. We would have been able to make payroll, but it was a scare," Gardner said.
He said Humanly was in better shape than a lot of startups because it had a backup bank account with a different institution.
And it turned out on Sunday that federal officials said all deposits in the bank would be made whole, even over the $250,000 insurance limit for the FDIC.
"When we went to start this thing four years ago, we knew that there would be risk," Gardner said. "We quit our jobs and raised venture capital, and we knew it would affect our lives and our lifestyles. We signed up for that."
But risk from the company's bank account was never on the company's radar, Gardner said. "The expectation was not that there would be a layer of uncertainty from our banking relationship."
Humanly went through the Mountain View-based Y Combinator business accelerator program in 2020, and it opened its account with Silicon Valley Bank at that time.
"Silicon Valley Bank did so much for the startup community," Gardner said. "It was a natural fit."
Humanly raised more than $4 million two years ago.
Humanly isn't the only local tech company with a Silicon Valley Bank account.
Granite Bay-based digital license plate company ReviverMX Inc. opened its account with Silicon Valley Bank in 2009, before it even had a product, said co-founder Neville Boston.
"They have been an amazing partner, and they are supportive of founders. They are an integral part of the (Silicon) Valley," Boston said. "That voice is needed."
Like Humanly, Reviver has other bank relationships, he said.
The fast pace of the run on the bank was sadly a knee-jerk reaction by the bank's customers, Boston said. "To me, it's a shame."
With remote working, digital banking and high-speed communications, something like a run on a bank seems more possible than it was even a decade ago, he said. "In this environment, this can happen to anyone anywhere."
Bank regulators installed a new CEO at the receiver bank created to carry on serving the customers of Silicon Valley Bank.
"I think their new CEO helps bring in a lot of calm," Boston said. "I hope they get a second act."
Some technology executives said that if their accounts at Silicon Valley Bank suddenly evaporated, it would be an extinction event for their companies.
Silicon Valley Bank's collapse was rapid. Early last week the Santa Clara-based bank announced that it had lost nearly $2 billion selling assets in an effort to shore up its balance sheet, and on Wednesday it announced it would raise $2.25 billion by selling shares.
By Thursday, clients were pulling money out of the bank at a rapid pace and its share value plummeted. On Friday morning, state bank regulators took over the bank and the FDIC created a receiver bank.
