When consensual hallucination collapsed, the IPO and SPAC bubbles collapsed and closed the exit doors for VC investors, so they stopped funding many of these companies. And suddenly, these companies have to survive with what they’ve got, but they’re burning cash like there’s no tomorrow, and they cannot cut costs fast enough, and they cannot get new funding – neither the still private companies from private investors, nor the already publicly traded companies via stock offerings.

“Mass extinction event” is now the term used by the VC community to describe what will happen to the vast majority of startups when they run out of money.

Many of these startups and their founders are clients of SVB across its divisions:

• Silicon Valley Bank: deposit outflow as startups burn cash until it’s gone and they shut down. And some loans may go bad.
• SVB Securities, the investment banking division.
• SVB Capital, the venture capital division.
• SVB Private, the private banking and wealth management division to cater to the (erstwhile?) multi-millionaire or billionaire founders.

SVB Financial/Silicon Valley Bank Shares Collapse 55% Today, 84% from Consensual Hallucination Peak, as it Shores Up Balance Sheet & Liquidity to Face the Future | Wolf Street