Deals
SVB Collapse Exposes More Vulnerabilities Among Recent IPOs
- Less mature firms face challenges finding a new lender
- IPOs were already embattled as higher rates weigh on growth
People line up outside the Silicon Valley Bank headquarters in Santa Clara, California.
Photographer: Justin Sullivan/Getty ImagesThis article is for subscribers only.
Recent IPOs are facing fresh scrutiny from investors concerned about the collapse of SVB Financial Group, which was a leading bank for startups.
“They’re all scrambling to find a new lender,” said Erik Gordon, professor at the University of Michigan’s Ross School of Business. “For a lot of the companies that are smaller and unknown, they are going to have to get a new bank comfortable with them as a client — a client that may have negative cash flow is not usually the most desirable.”