Why was there a run on Silicon Valley Bank?

The big news in both the tech and financial worlds right now is the run on Silicon Valley Bank. SVB, as it’s known, was a bank that lent a lot of money to startups (or “startups”, i.e. bigger tech companies that are still private), and provided a lot of financial services to both startups and other tech companies. Here’s a good rundown of what it did.

I use the past tense, though, because on Thursday (i.e. yesterday), a bunch of people pulled their money out of the bank. The bank didn’t have enough cash to pay out all the people who were asking for their money back, so it collapsed. The FDIC, the government agency responsible for preventing and cleaning up bank failures, took the bank into receivership.