Business Wire India
In light of the sudden collapse of Silicon Valley Bank, Dr. Mukesh Aghi, President and CEO of the US-India Strategic Partnership Forum’s Startup Connect Program thanks the U.S. Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the U.S. Treasury Department for the steps they have taken to fully preserve the insured and uninsured deposits. A swift resolution is vital for the United States to maintain its leadership in the global startup and innovation ecosystem.
Silicon Valley Bank (SVB) has been the go-to bank for U.S. and foreign tech startups and members of the venture capital (V.C.) industry for years, and its abrupt halt has left several of its customers worldwide in crisis. The most immediate task was to prevent contagion beyond this limited case and maintain U.S. leadership in the global startup ecosystem by ensuring a swift and orderly resolution at SVB. The authorities have done so, realizing that failure to protect the value of deposits would cripple many of these startup firms, resulting in the loss of hundreds of thousands of jobs and impacting millions of lives globally.
Furthermore, the startup ecosystem in the United States is tightly integrated with the ecosystem globally. The financial crippling of many startups would reverberate around the world, especially in innovative countries like Ireland, Israel, and India. The important measures were to preclude the loss of credibility and trust in Silicon Valley, which if lost, might never be restored and would further erode the United States’ position as the global startup leader.
United States as the Innovation Engine of the World
One of the United States’ most significant and successful exports has been the idea of the American Dream, a dream many founders and co-founders of startups have emulated.
USISPF research shows that more than 70% of startups have immigrant co-founders, and as of 2022, over 50 CEOs of public companies are of Indian origin.
In the tech space, both the United States and India have seen tremendous collaboration and convergence. The synergy is best epitomized by India’s tech talent and the United States’ robust tech sector.
The technology industry for decades has provided the United States with a global competitive edge, and Silicon Valley continues to epitomize that hub for innovation. During his 2015 visit to the Valley, Prime Minister Narendra Modi stated, “California is one of the last places in the world to see the sunset, but it is here that new ideas see the first light of day.”
The startup innovation economy houses millions of jobs, liquidity, and dreams, all of which stand at significant risk if liquidity goes awry. USISPF’s immediate focus is to help ensure the safety of deposits of startups and V.C.s to be assured of security in a timely and efficient manner. The dislocation of funds from SVB is not just a financial crisis but can snowball into a tech crisis. As such, we thank the Federal Reserve, the FDIC, and the U.S. Treasury Department for acting swiftly and for reassurance to startups during this crisis. In the future, I urge the White House and Treasury Department, working in partnership with Congress, to strengthen the regional banking system.
The U.S. startup ecosystem has a tremendous impact worldwide, so immediate action was needed and thus taken to protect it during this critical time.