Australian start-up founder travels to US to get his money back

Ben Sand has flown to Santa Clara, California, to get his money back.

The founder of Sydney AI training start-up Strong Compute had transferred a “material” amount of his company’s cash into Silicon Valley Bank just last week to fuel its American operations before the bank began to teeter on Thursday and collapsed on Saturday Australian time.

“Literally, it arrived the day before this happened,” Sand said.

Sand arrived in the US on Sunday night local time. He had flown to Santa Clara, where SVB is based, with three of his team and scoped out the bank’s offices.

Sand was already planning to travel to the US for meetings, but he doubled the size of the team he was travelling with, even drafting in one employee to fly out on her birthday. “I have a special gratitude to her,” he said.

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The decision to fly to the US reflects the intense anxiety in the sector over the weekend that will play out for months as companies review their banking arrangements and look for new US finance partners.

The US Federal Deposit Insurance Corporation, a government regulator, has assured all SVB depositors that they will be able to access their balances in full after the bank collapsed on Friday following a bank run. It was triggered by questions about SVB’s stability as interest rate rises tanked the value of some of its investments and spurred its base of start-up clients to withdraw their deposits. The cost of making deposits whole will be repaid by wiping out SVB’s shareholders and selling the bank. Any shortfall will be made up by a levy on other banks in America.

But Sand had already booked his tickets before that announcement came through. He does not regret it, even as other depositors have been content to wait and receive their money via wire transfers, which several start-ups have reported are starting to clear.

Ben Sand has flown to Santa Clara, California, to get his money back.

The founder of Sydney AI training start-up Strong Compute had transferred a “material” amount of his company’s cash into Silicon Valley Bank just last week to fuel its American operations before the bank began to teeter on Thursday and collapsed on Saturday Australian time.

“Literally, it arrived the day before this happened,” Sand said.

Sand arrived in the US on Sunday night local time. He had flown to Santa Clara, where SVB is based, with three of his team and scoped out the bank’s offices.

Sand was already planning to travel to the US for meetings, but he doubled the size of the team he was travelling with, even drafting in one employee to fly out on her birthday. “I have a special gratitude to her,” he said.

Loading

The decision to fly to the US reflects the intense anxiety in the sector over the weekend that will play out for months as companies review their banking arrangements and look for new US finance partners.

The US Federal Deposit Insurance Corporation, a government regulator, has assured all SVB depositors that they will be able to access their balances in full after the bank collapsed on Friday following a bank run. It was triggered by questions about SVB’s stability as interest rate rises tanked the value of some of its investments and spurred its base of start-up clients to withdraw their deposits. The cost of making deposits whole will be repaid by wiping out SVB’s shareholders and selling the bank. Any shortfall will be made up by a levy on other banks in America.

But Sand had already booked his tickets before that announcement came through. He does not regret it, even as other depositors have been content to wait and receive their money via wire transfers, which several start-ups have reported are starting to clear.