PHILADELPHIA (KYW Newsradio) — The collapse of Silicon Valley Bank on Friday sent shockwaves through Pennsylvania startups, including many in the tech community. Experts say the bank’s failure should serve as a reminder to tech startups to have a financial Plan B.
Life Sciences Pennsylvania, based in King of Prussia, is a pharmaceutical and medical device trade group representing nearly 900 organizations. CEO Chris Molineaux says biotech companies breathed a sigh of relief when the FDIC stepped in and guaranteed the deposits of companies doing business with SVB.
"We were anxious to hear what the government had to do. And at the same time, our companies really did not wait around,” Molineaux said. “Our industry is not one that will wait and see what happens to them."
Molineaux says while those companies were relieved to hear the federal government was guaranteeing their access to capital, the firms were already taking steps to move their money to other banks.
"I spoke with several of our companies this weekend, and they were already well into the contingency planning and execution phase," he said.
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Molineaux acknowledges biotech executives are comfortable with uncertainty, but he says it’s still essential to have a plan to pay their employees and vendors in unpredictable times.
"It is high-risk, and our executives are very comfortable with uncertainty. And this is just another example of the uncertainty that it takes, or that you face, while running a life sciences company."