Following the downfall of Silicon Valley Bank, many finance leaders had sleepless nights and multiple calls over the weekend that followed with their stakeholders.
The Vareto Visionaries recently gathered for a members-only discussion around bank risk and cash management strategies in response to the chaos the bank run imposed for hundreds of companies.
Highlights of the conversation included the following:
- Treasury and cash management are more important than ever. VCs are now scrutinizing the details, so make sure you have your plan documented and that you’re dotting the t’s and crossing the i’s to mitigate risk.
- Strongly consider getting a venture debt loan while they’re available, as venture debt is likely to get significantly more expensive and harder to get. SVB was the largest venture debt lender that also offered attractive rates to startups. Combined with rising interest rates and VC uncertainty, the venture debt market is going to be much more challenging.
- Some tactics startups are now taking as part of their treasury strategy include: extending the runway for fund management, sending out contracts with fixed pricing for a locked-in period of time, finding ways to reduce cash burn, and drawing down on their existing loans.
If you’re looking to connect with others facing similar challenges, apply to join the Vareto Visionaries.