'Ab number ayega inka': Ashneer Grover is eager to see how many VCs lose their jobs after Silicon Valley Bank's collapse

 Former BharatPe CEO Ashneer Grover on Sunday said he was eager to see how many Venture Capitalists (VCs) lose their jobs after the collapse of California's Silicon Valley Bank (SVB). He said the VC space needed a cleanup for a long time. SVB, which was the major lender for the tech start-ups, was shut down on Friday by US regulators due to a liquidity crunch.

According to reports, over 50 per cent of VC-backed start-ups in the US had parked their money in the bank. Grover said that the VCs are not founders and it's not their own money that they deploy.

Former BharatPe CEO Ashneer Grover

"VC space needed a cleanup for a long. Ab number aayega inka - too stupid people have made too much easy money in VCs doing nothing," he said in a tweet.A venture capitalist is a private equity investor that provides capital to early-stage companies in exchange for an equity stake. 

Suneel Yadkikar, who shares insights on start-ups, seemed to concur with Grover. He said while it was important to hold individuals accountable for their actions, let's not forget the bigger picture. "The SVB bank failure highlights the need for a thorough evaluation of the VC space and the role it plays in the startup ecosystem," he wrote on Twitter. "The moment has come for industry-wide improvements to the system."

SVB, which was the 16th largest bank in the US, announced a loss of approximately $1.8 billion from a sale of government treasuries and mortgage-backed securities on Wednesday (March 8). 

The same day, its holding company - SVB Financial Group - announced it was conducting a capital raise. Following this, investors and depositors reacted by initiating withdrawals of $42 billion in deposits from the bank on March 9, causing a run on the Bank.

The bank soon ended with a negative cash balance of approximately $958 million on Thursday. Despite several attempts from the bank to transfer collateral from various sources, it did not meet its cash letter with the central bank and deposit withdrawal put it in a situation where it became incapable of paying its obligations.

On Friday, the US regulator took control of the bank saying its liquidity position was inadequate, "and it cannot reasonably be expected to pay its obligations as they come due".