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Silicon Valley Bank (SVB) was one of the leading lenders for tech startups and venture capitalists in the US and UK. However, on March 11, 2023, it collapsed after failing to raise enough capital to meet its obligations. The bank was seized by regulators and put under receivership by the Federal Deposit Insurance Corporation (FDIC) in the US and the Bank of England (BoE) in the UK.

The failure of SVB has caused widespread disruption and uncertainty for thousands of its customers, especially startups that relied on its loans, deposits, payroll services and payment processing. Many face delays or losses of their funds and difficulties finding alternative banking partners.

To avoid such issues in the future, startup businesses should take some precautions when choosing a bank or a financial service provider. Here are some tips:

1. Do your due diligence. Research the financial health and reputation of your potential bank or provider. Check their ratings, reviews, regulatory filings and news coverage. Look for signs of liquidity problems, fraud allegations or legal troubles.
2. Diversify your banking relationships. Don’t put all your eggs in one basket. Have multiple accounts with different banks or providers that offer similar services. This way, you can reduce exposure to any institution and have backup options if something goes wrong.
3. Monitor your accounts regularly. Keep track of your balances, transactions and statements. Report any suspicious or unauthorized activity immediately. Be alert for any changes in fees, terms or service quality.
4. Plan for contingencies. Have a contingency plan if your bank or provider fails or stops serving you. Know how to access your funds, transfer them to another account or withdraw them in cash. Have alternative sources of funding or credit if you need them.

These precautions can protect your startup business from potential banking issues and ensure its financial stability and security.