Republic Reports Limited Exposure to Failed Bank Silicon Valley Bank

Republic, the largest securities crowdfunding platform in the world, has distributed a note indicating that it has “limited exposure” to Silicon Valley Bank (NASDAQ:SIVB), the top venture-focused bank that is based in California but also has a significant presence in other top innovation hubs.

Republic said there is no operational impact to the company, adding that it does not use the bank to hold funds in escrow for issuers using the online capital formation provider.

Republic co-founder and CEO Kendrick Nguyen commented:

“While we can’t speak to where a company raising on Republic may have banking relations, it is our understanding that Republic’s partner escrow provider is not affected. Our escrow provider is a Deposit Insurance Fund member bank, meaning that in addition to FDIC insurance, they have additional insurance protection, should there be further fallout in the interconnected banking ecosystem.”

He indicated that they have reached out to portfolio firms and said they are ready to support those in need.

More updates should be forthcoming over the next few days.

Currently, deposits holding under $250,000 are completely insured but more than 90% of accounts at the bank held more than this amount putting firms that used the bank at great risk and perhaps bankruptcy.

Meanwhile, regulators are working to find a buyer for the bank that was impacted by the rapidly rising interest rates that pushed debt securities lower. SVB held many long-duration assets purchased when interest rates were near zero. Today rates are considerably higher causing a serious hole in the bank’s balance sheet.

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