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Journalism of Courage
For Zerodha’s founder and CEO Nithin Kamath, the lesson from the collapse of Silicon Valley Bank or the Yes Bank crisis in the Indian context is “to have funds, especially working capital, distributed across a bunch of banks”.
In a LinkedIn post, the Zerodha founder said, “It is ridiculous how many things can go wrong when running a business. Everything from rapid change to market sentiment to waking up one day and being unable to access money in the bank, like with SVB.”
On Friday, the US regulators shut down the Silicon Valley Bank, which mostly lent money to start-ups, venture capitalists (VCs), and tech firms. Before the collapse, it was the 16th biggest US bank. It is the second largest bank failure in the history of the US, and first since the 2008 financial crisis. Click here to read more about the SVB collapse.
“I think an underrated skill set for running a business is being pessimistic,” Kamath further wrote in the post. “Consider everything a risk and do everything you can to mitigate it. Every business will be exposed to a black swan event at some point; the idea is to survive those.”
“The lesson from SVB or Yes Bank in the Indian context is to have funds, especially working capital, distributed across a bunch of banks,” he wrote.
MoS IT Rajeev Chandrasekhar this week will meet representatives of Indian start-ups affected by the SVB shut down to understand how it has impacted them and how the government can help.
