Silicon Valley Bank was famous for being the financial institution of choice for the tech industry. Then it became infamous for a bank run that ended with SVB in receivership. The bank was well-known for making bets of start-ups, but its history is connected to another high-risk endeavor – construction.
Most community banks, such as SVB as it was known, depend a lot on construction projects and commercial real estate for business. SVB differed from other community banks by its large focus on funding the tech industry. However, its failure and the ensuing problems at Signature Bank, First Republic Bank, and others caused concerns about the ability to fund commercial real estate projects.