Wednesday , March 22 2023

48 hours of panic for Vietnamese engineers amid SVB fallout

To some Vietnamese engineers in the U.S., 48 hours after news about Silicon Valley Bank collapse were the worst time of their life, until they were assured they would not lose all.

When she heard how the bank went under, Phuong Thanh, a co-founder and CFO of a Silicon Valley robotics startup, got shell-shocked.

“At midnight on March 9, I received a text message from a co-founder regarding the risks posed to the Silicon Valley Bank (SVB). The management board opened an emergency meeting in the middle of the night to discuss about the worst case scenario,” Thanh said.

After the meeting, the board decided to withdraw all the money from the bank. But the worst case scenario did come: no transactions could be made. On March 10, Thanh came to a bank branch, only to find the gates locked and no one there. Many other businesses owners were also standing outside and waited.

“When news about the SVB going under were announced, it’s like all the oxygen in my body escaped. All of our company’s properties and startup funds are in there. Over 50 people are waiting for their salaries, which are supposed to come in the next few days. The startup was facing a risk of collapse,” she recalled.

Thanh and the board thought of several measures to salvage the situation, including paying workers from their own pockets, borrowing money, or even laying off people. The worst case scenario would be bankruptcy and company shutdown. Thanh said the 48 hours after she heard the news were the worst time that she had experienced, ever since she arrived in the U.S. to chase her startup dreams.

Tu Tran, a tech engineer at a startup on AI, said the news came to him as a huge shock, like “thunder booming next to his ears.”

“I nearly exhausted myself to find this job after I was caught in the historic waves of layoffs. If this company encounters issues, new workers like me would be the first ones to go,” he said.

Ever since he got laid off from his last job, Tran felt like he was “thrown into a lake, but luckily got hold of a plank.” But over the weekends, he felt like that plank might be sinking as well. The downfall of the SVB just might be the final blow to the coffin for many engineers who came to the U.S. via the H-1B visa, like he does.

“Everyone in my family understood that if I couldn’t stay at this company, we would have to leave the U.S.,” Tran said.

Not all is lost

Hope came at last on Monday when Tran heard the government would make sure that customers do not lose the money they had already deposited at the SVB. It means Tran’s new company just might survive.

“It’s alright now. We are saved. Everyone please go to work normally,” Tu received a message from his boss in the company group chat, after two days of pure silence.

Thanh said she “came alive” after hearing that the money she deposited would be safe.

“What a memorable 48 hours. It was like I was at the edge of a cliff where I could lose everything, but everything returned to me,” she said, adding that she would continue to try and withdraw her deposited money in multiple places.

Le Van Thanh, a solutions engineer at Google, said that people could look for help from the community in previous waves of layoffs to find new jobs. However, during the SVB incident, startups are hesitant to speak up and ask for help, as they are worried their companies’ activities would be further disrupted if they try to speak up.

“If they are not promptly supported, small startups, with a workforce smaller than 100 people, would be the most vulnerable victims in the SVB crisis. This catastrophe may push back the progress of startup companies by 10 years,” Thanh said.

The sudden collapse of Silicon Valley Bank last week sent shockwaves through the startup community, which has come to view the lender as a source of reliable capital and deposit partner, particularly for some of tech’s biggest moonshots, Reuters reported.

The bank has been central to the formation of many early stage companies due to its reputation for taking bets on startups that may have had little chance of survival otherwise and for which larger banks may find far too risky.

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