Silicon Valley Bank crisis: Zerodha co-founder and CEO Nithin Kamath said it is astounding as to how many things can go wrong in a business right from rapid changes to not being able to access money in the bank as is the case with the embattled Silicon Valley Bank (SVB). He tweeted, “It is ridiculous how many things can go wrong when running a business. Everything from rapid change to market sentiment to waking up one day and not being able to access money in the bank, like the SVB.”
He added that being pessimistic is an extremely underrated skill when it comes to running business. Kamath wrote in a tweet, “I think an underrated skill set for running a business is being pessimistic. Consider everything a risk and do everything you can to mitigate it. Every business will be exposed to a black swan event at some point; the idea is to survive those.”
The Zerodha co-founder further stated that the lesson Indian businesses need to learn from the Silicon Valley Bank saga and the Yes Bank collapse is that they need to have funds, especially working capital, distributed across a bunch of banks.
Kamath underscored, “The lesson from SVB or Yes Bank in the Indian context is to have funds, especially working capital, distributed across a bunch of banks.”
Kamath’s tweet comes as HSBC has purchased the UK arm of SVB. The development was confirmed by the UK Chancellor of Exchequer Jeremy Hunt in a tweet. Hunt tweeted, “This morning, the Government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC. Deposits will be protected, with no taxpayer support. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise.”
The US regulators closed tech start-ups-focused Silicon Valley Bank on Friday and tasked the Federal Deposit Insurance Corporation (FIDC) to take control of the lender’s deposits.
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