Walking into Roku City on a Sunday afternoon, you’d hardly know that the company’s namesake was having an extraordinarily stressful weekend.

Sure, Fu City — a multi-story re-creation for Roku sweetheart screen, erected in the heart of downtown Austin for the tech and culture extravaganza of the city south by southwest—has had its share of problems. An enormous robot broke loose in one part of the installation; The kraken’s tentacles rose menacingly from the sea elsewhere.

But nothing indicates that Roku is based in San Jose The broadcast and hardware giantI just watched millions of dollars disappear into thin air. According to a regulatory filing, the company had $487 million, or about a quarter of its money, saved at Silicon Valley Bank — a mainstay of lending in the tech world that to failstartlingly and unexpectedly, late last week.

Amid concerns that the bank’s operation could spill over to other financial institutions, federal agencies — including the Treasury Department, Federal Reserve and Federal Deposit Insurance Corporation — now say all of the bank’s customers will be able to They get their money back. However, because Silicon Valley Bank has done so much business in the tech and media ecosystem — the lifeblood of South by Southwest, or SXSW, a hybrid film festival, tech fair and culture summit — the crisis overshadowed the first few days of the conference.

Attendees shared rumors of startup founders crying in the street after word spread of the bank’s collapse. Even among the assembled attendees, Slack’s private channels were reportedly awash with sympathy.

Roku did not immediately respond to a request for comment.

At a small meeting Sunday afternoon of people working on “conversational artificial intelligence” — that is, artificial intelligence programs that mimic human speech, including chatbots and artificial voices — some said the bank’s collapse had dampened morale at the annual conference.

Siro Sobral, 32, product manager at Singapore-based e-commerce company Shopee, said the news was “shocking” for attendees. He added that given that Silicon Valley’s bank had been a staple of the tech world for decades, people were drawing parallels between its collapse and the financial meltdown of 2008.

“Everyone was surprised,” he said.

He added that although the business owner was not directly affected, the resulting chaos could lead to more centralization of the AI ​​field.

“When something like this happens, it’s a huge opportunity for big tech companies” such as Microsoft and Google, Sobral said. “I don’t know what will happen next, because a lot of small businesses were using” the bank.

Shannon Brownlee, another AI meeting attendee, said that although her telecoms technology company Valence Vibrations did not hold its own money in Silicon Valley Bank, outside investors who had previously expressed interest in her startup now said they needed to. More time to find out. from their financial resources.

Our main investor from the past [funding] The round was $30 million in Silicon Valley Bank. “He’s now scrambling to try to find out.”

Arriving at the conference Friday morning — she lives in Los Angeles — Brownlee, 22, heard almost immediately about the incident.

“We arrived, went to sit in the coffee shop, do some work,” said Brownlee. And once we sat down, it was just like, ‘Oh my God, everyone freaks out. “

I’ve heard of other conference attendees who are in a much worse situation. She said some tech workers arrived in Austin to find they no longer had access to the company’s assets; Now they are “sort of stuck here”.

“People are definitely nervous,” added the startup’s co-founder, and while the lineup has been relatively unaffected, the overall tone is definitely more somber.

Other media interests affected by the bank failure include video platform Vimeo and video game platform Roblox. Wrapbook, the entertainment industry’s payroll platform, said on Friday that the bank’s collapse means payroll processing has been delayed.

“Bank failure is an extreme external event,” Wrapbook chirp. “We apologize, on behalf of all of us at Wrapbook, for any challenge this has put you through.”

Reign Ventures, an early-stage investment fund, tweeted Saturday that they had to shut down the events they were planning to host at SXSW due to the bank’s collapse.

“We are so sorry to miss you and send our support to all the startups and VCs who have been impacted during this challenging time.” books.

Dan Solomon, senior editor at Texas Monthly, He said In his own tweet on Friday that he attended a panel, the startup’s founder spent the whole time “trying to get a bank transfer before 5pm so you can do payroll.”

In fact, there were some indirect references to the week’s news during the education-oriented conference sessions. During a talk about the future of AI, BuzzFeed CEO Jonah Peretti joked that everything these days is proliferation-driven — even bank operations.

And during a Monday morning conversation titled “How DC Wants to Mess Your Startup,” US Chamber of Commerce president Susan Clark framed the federal regulators’ latest action to protect depositors as an example of when government can be beneficial to tech companies — even as she backtracked in the rest of her talk about What she described as a federal overreach in the economy.

“It’s an important morning for a lot of us to be quiet,” Clark said. “It’s an important morning to get smarter and do the homework to understand what really happened.”

But for most parts, many SXSW panels didn’t acknowledge the crisis which certainly affected many in the audience, if not the stage themselves.

Ironically, it was the cultural aspect of the festival that seemed most eager to deal with the crisis.

On Sunday night’s live episode of comedian Matt Besser’s popular comedy podcast, Silicon Valley Bank received several mentions. At one point, during a scene about Jesus in financial trouble, an audience member shouted “SVB!” spontaneous.

At another point, guest star James Adomian blasted into character as a SXSW panelist after a terrible living room trip: “I just lost all my seed money in an SVB blast!”

Customers of the Silicon Valley bank, which was shut down by regulators on Friday after running the bank in its first bank failure since 2008, will have access to all of their money Monday, and the heads of the Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation. Sunday said.

“Today we are taking decisive action to protect the American economy by strengthening public confidence in our banking system,” he said. Joint statement From Treasury Secretary Janet L. Yellen, Federal Reserve Chairman Jerome H. Powell, and Federal Insurance Corporation Chairman Martin J.

“This move will ensure that the US banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a way that promotes strong and sustainable economic growth.”

The statement said depositors could access their funds, including those over the $250,000 FDIC insurance limit, on Monday.

“The taxpayer will not bear any losses associated with Silicon Valley’s decision,” the statement added.

This is a developing story.

There were many Silicon Valley accounts at recent days – Falling from grace of the mighty founders, the The collapse of the crypto industry And mass layoffs across the tech sector, For example but not limited to. But the stunning failure of Silicon Valley Bank, the region’s longstanding regular and one of the largest in the country, should finally force us to reconsider — and fix — how our tech industry works.

There seem to be at least two main reasons for being a “startup bank”. to fail. First, huge deposits were credited to their books in low interest securities, And they came from venture capital-backed companies burn money faster than expected, Just as VC financing in general has slowed. Second, the company and many of its start-up clients were beholden to a relatively small cadre of venture capitalists, and so SVB was uniquely vulnerable to running on the bank if those venture capitalists decided to withdraw their money at the same time.

This is it What appears to have happened.

Rising interest rates eroded the bank’s balance sheet, it did not have enough to guarantee a withdrawal of funds, and the attempt to raise capital failed – so prominent venture capitalists such as Peter Thiel and his founding fund advised their companies to exit. Word spread, and soon everyone was doing the same thing, fittingly enough $42 billion in withdrawal attempts.

As many have pointed out, the Bank likely had trouble brewing with the Fed raising interest rates and made its intent to continue to do so clear. And the bank should have conveyed its strategy to the account holders after the crisis seemed imminent, and so on. But even looking beyond the recent sequence of events, it should be clear that The “backbone” of the Silicon Valley startup ecosystem It has long been broken.

If SVB is vulnerable to rapidly rising interest rates, it is because it caters to an industry where dumping cash on uncertain companies is a norm, and venture capitalists competing among themselves to see who can make the rains harder. It is an inherently random system, one that generates recklessness at its core. It’s a little surprising, in fact, that it took this long for it to collapse under the weight of all that hard-to-deploy capital.

“Build first, ask questions later” philosophy, “move fast and break things” spirit; Your mandate to grow your platform at any cost then try to figure out ways to manage it, long after the Nazis have moved in; the unicorn or bankruptcy mentality that says nothing is worthwhile if the market cannot fit into world domination; These are all by-products of a system starting with a venture capital-led model of technology development.

Venture capitalists make their money by betting on a lot of companies in the hope that one of them will become the next billion dollar hit – with investments of this size, nothing else is worth their time. So you have thousands of companies with young founders who suddenly have more money than kings, charged with turning that into more money than God.

Often, they park their new load at the SVB. As such, the vast majority of funds held by SVB are not FDIC-secured, because each deposit is insured at a maximum of $250,000—only 3% to 6% of a bank’s deposit is small, by some counts. The typical startup has millions tied up in there.

It is not clear if they will see it again. SVB assets are being marketed, and while some are optimistic that a buyer will be found and depositors will become full, this is far from certain. If he comes up short, it would be a nice indictment of what Silicon Valley financiers really value.

Remember, all Elon Musk needed to do was snap his fingers and call some venture capitalists and JPMorgan, and he had a deal to buy Twitter at an inflated $44 billion price. SVB is the economic foundation for countless startups and technology companies in the region. according to New York times, As of 2015, it “serves 65 percent of all current startups and many of the most prominent venture capital firms”. If you can’t find a buyer, whether in a larger bank or regional investors, or a conglomerate thereof, you’d rather tell us where the priorities lie.

Because if SVB goes up, it’s the aspiring founders and tech workers who will be hurt the most. Banking companies with SVB are Missing payroll due to collapse. People who aren’t venture capitalists don’t get paid for their work, and people who work around the clock towards a dream they believe in (even if they also think it might make them more money than God) lose their companies.

As for venture capitalists? Sorry, they’ll have to do it quick – they’re in Aspen, almost to the top of the ski lift.

Now, imagine a model where an investor who wanted to invest money in a tech company evaluated the risks of doing so, or where the founders were made to prove their technologies were marketable before they got a Series A of $100 million or whatever. Imagine a world in which there were few men no Able to decide among themselves whether an idea is suddenly worth the GDP of a small nation-state, killing an entire industry without a sustainable alternative – or panicking each other into bringing down a major financial institution. Utopia, I know!

It’s time to find ways to constrain these massive and reckless flows of capital, or at least tax them proportionately, to get the tech sector back on the ground.

Because the alternative is obvious – tech products developed and launched recklessly, with a constant risk of total collapse affecting everyone whose address is not on Sand Hill Road.