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Finding the New “Normal”: Cash Management Post-SVB

Over the last month, many startups have been on a roller coaster ride of emotions with the collapse of Silicon Valley Bank (“SVB”) and concerns of instability among other startup-friendly banks. But, the instability goes back further than the recent Silicon Valley Bank crisis.

The startup ecosystem was already cautious and concerned with the U.S. Federal Reserve’s moves to tighten liquidity and combat inflation, lingering supply-chain issues following the Covid Pandemic, and generally uncertain economic conditions worldwide. Hundreds of thousands of employees from tech companies, including the leading names, were laid off, and the startup ecosystem saw a historic decline in VC funding in 2022. However, VC funding amounts were still higher than all other years on record prior to 2021.

Compare this with 2021, when VC-backed startups in the US raised a record 329.9 billion dollars, and 586 companies added their names to the Crunchbase Unicorn Board*. What seemed normal back then may well have been the exception.

The stark contrast between 2021 and 2022 begs the question, what exactly is normal for the startup ecosystem, and what can we expect in 2023? Given the nature of startups, there may never be a “normal.” Startups themselves are grown out of abnormality, with ambitious entrepreneurs finding new and creative ways to change the status quo and bring innovation to every aspect of our lives.

Instead of being discouraged by the negative news, we ask: what can we learn? In the case of the SVB collapse, we’re learning about healthy cash management practices.

  1. Find a CFO In early– startups with small teams, founders generally have to wear multiple hats. For example, while your expertise may be in product development, you’ll also need to be in charge of other business activities like sales, marketing, and fundraising. In most cases, it’s a learn-as-you-go process, and it works. But, when it comes to finances, seek the help of an expert. Fractional and part-time CFOs or advisors with corporate finance and treasury expertise can be particularly useful. Cash management can make or break your startup, so it’s worth it to have someone experienced come in and help set you up properly early on.

  2. Have a Plan Create a strong cash management plan so that you always have safety mechanisms in place. Whether it means diversifying your banking relationships among multiple startup-friendly regional banks, banking with large banks deemed “too big to fail,” opening accounts with startup-focused neobanks, or (ideally) a combination of each, have a clear strategy outlined in a cash management plan so that when circumstances change, you know exactly where to go and how to react.

  3. Keep Your Plan Updated Remember that the more cash you hold, the more risk you face. As startups start to obtain large amounts of funding, it can be easy to deprioritize cash management and lose perspective. Cash management becomes even more important once you start raising serious capital. So, with every stage of growth, take some time to re-evaluate your cash management plan and make the necessary updates to keep your cash safe.

It’s been a wild Q1, but we’ve seen an incredible amount of tenacity and strength in startups as they navigate this ever-changing landscape. The SVB crisis has been a reminder for entrepreneurs to keep tight reins on their capital, whether they are simply depositing or spending it.



1 McCarthy. Dan. "2022 Saw a Historic Decline in VC Funding." Emerging Tech Brew,9 Jan. 2023.

2 Mathur. Priyamvada. "Six Charts That Show 2021's. Record Year for US Venture Capital." Pitchbook, 19 Jan. 2022,

3 Teare, Gené. “Global Venture Funding and Unicorn Creation in 2021 Shattered All Records.” Crunchbase News, 5 Jan. 2022,

4 “How to Adopt an Effective Cash Management Strategy for Your Startup.” Mercury News - the Bottom Line, 27 Oct. 2022,

5 Vashee, Ajay. “How to Adopt an Effective Cash Management Strategy for Your Startup.” Mercury News - the Bottom Line, 23 Mar. 2023,


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