Founders Insights

Distressed Bank Update as of March 16, 2023

In the three days since federal authorities announced sweeping measures to protect depositors of Silicon Valley Bank (SVB) and Signature Bank and help prevent additional bank failures (as discussed in our update of March 12, 2023), the U.S. banking system appears to have stabilized, at least temporarily.

However, as of 4:00 p.m. ET on March 16, 2023, market conditions remain stressed, including outside the United States, with the fate of at least one global systemically important bank, Credit Suisse, a particular point of focus.  The latest developments are summarized in this update.

Dealing with “Dead Equity”

“Dead equity” refers to company stock owned by individuals and entities no longer contributing to the company. In general, there are two types of dead equity seen on emerging company cap tables: Departed founders/employees. A co-founder or early employee leaves a company or no longer significantly contributes […]