Sitting at his home office desk in New York on the Tuesday after the failure of Silicon Valley Bank, Rafat Ali is trying to get back to work running his company, Skift, a travel news website and event host. He’s been glued to that spot since the Friday before, when he saw the news on Twitter and realized he had millions frozen in the company’s business account.
“I thought my business was done,” says Ali, who is chief executive officer and founder of Skift. “Friday morning, I was a complete mess.” After gathering himself, Ali and his team quickly got to work, operating over a Google hangout all weekend as they tried to sort out the cash-flow problems and try to get access to their money. Some of this was muscle memory. As a travel-related company, Skift got hit hard in the first weeks of the pandemic. That was a slow-motion descent into madness, while this was a 72-hour debacle.
Why have millions in one place? The FDIC insurance limit has long been $250,000 per depositor, per account type, but this crisis has shed light on the fact that many depositors are way over that limit. It’s estimated that SVB had more than $150 billion in uninsured deposits. “This is not a thing that our CFO was focused on or thought of, such as putting money in T-bills or money-market funds. It’s not worth our time,” says Ali.