The collapse of Silicon Valley Bank (SVB) on March 10, 2023, disrupted payroll operations at American technology companies, leaving some employees without their expected paychecks on time. Startups that relied on the California-based bank faced temporary restrictions on accessing deposits, while payroll provider Rippling experienced payment-processing delays affecting businesses that did not necessarily bank with SVB. The crisis raised fears of widespread unpaid salaries and startup failures. However, federal regulators intervened to protect all depositors, restoring access to funds on March 13. First Citizens later acquired much of SVB's business, which continued operating and was rebranded as First Citizens Innovation Banking in October 2026.
What Happened to Silicon Valley Bank?
Silicon Valley Bank was a major American financial institution specializing in technology startups, venture capital firms and life sciences companies.
Founded in 1983 and based in Santa Clara, California, the bank played an important role in financing the technology industry.
At the end of 2022, SVB held approximately $209 billion in total assets and $175.4 billion in deposits.
Its financial position deteriorated after rising interest rates reduced the market value of its long-term securities investments.
On March 8, 2023, SVB announced that it had sold approximately $21 billion in securities, resulting in an after-tax loss of about $1.8 billion. The bank also disclosed plans to raise $2.25 billion in additional capital.
The announcement triggered concern among investors and depositors.
Customers withdrew more than $40 billion on March 9, creating an extraordinary liquidity crisis.
The following day, California regulators closed SVB and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
Why Did Tech Workers Experience Delayed Paychecks?
The bank's sudden closure interrupted access to funds and payment systems used by technology startups.
Many companies maintained substantial operating deposits at SVB, including money reserved for employee salaries.
When the bank failed, businesses faced uncertainty about whether they could complete scheduled payroll transactions.
Some companies had enough money to meet their obligations but temporarily lacked access to the banking infrastructure needed to transfer it.
Others were affected indirectly because their payroll providers used SVB to process payments.
These disruptions led to delayed paychecks and concerns about upcoming payroll deadlines.
However, a delayed payment does not necessarily mean an employer has permanently lost the money or is unable to pay its employees.
Rippling Payroll Disruption: What Went Wrong?
Rippling, a San Francisco-based payroll and human resources technology company, was among the businesses affected by SVB's failure.
The company relied on Silicon Valley Bank for parts of its payroll payment infrastructure.
When SVB entered receivership on March 10, some payments that had already been initiated failed to reach employees on schedule.
Rippling CEO Parker Conrad publicly acknowledged the disruption and explained that the company was moving payment processing to JPMorgan Chase.
Rippling also used its own capital to fund certain payments while customer funds remained temporarily inaccessible.
According to its incident report, all payments scheduled for March 10 were submitted, with processing expected to finish by March 13.
The company marked the disruption as resolved on the morning of March 13, 2023.
The incident demonstrated how a bank failure could affect workers employed by companies that were not themselves SVB customers.
Which Companies Reported Payroll Problems?
Flow Health
Healthcare technology startup Flow Health reported payroll delays involving its employees after Rippling's banking operations were disrupted.
CEO Alex Meshkin told CBS News that the company did not bank directly with Silicon Valley Bank.
Instead, it was affected because its payroll provider depended on SVB's payment systems.
Flow Health had approximately 1,000 employees, and some did not receive their wages on their scheduled Friday payday.
Meshkin subsequently reported that the issue had been resolved and employees would receive their money by Monday, March 13.
iCopy Legal
Legal technology company iCopy Legal was also affected by delayed payroll processing.
Employee Lisa Andresen told Fortune that she did not receive her expected paycheck on March 10.
She later confirmed receiving the payment on Monday, March 13.
Her experience illustrated the financial inconvenience that even a short payroll delay can create for workers.
Other Technology Startups
Numerous startups reported concerns about meeting upcoming payroll obligations because their operating funds were held at SVB.
Some founders considered emergency financing or temporary banking arrangements to ensure that salaries could be paid.
However, not every company that feared a payroll shortfall ultimately missed a payment.
Available public reporting does not establish a reliable nationwide total of workers who permanently lost wages because of the bank's collapse.
Did Thousands of Technology Workers Go Unpaid?
During the crisis, news reports warned that thousands of employees could experience payment problems.
Those warnings reflected the potential exposure of startups and payroll providers to SVB's failure.
Confirmed incidents show that some employees experienced delays, while other companies feared future payroll disruptions.
Rippling's March 13 resolution and the federal government's depositor protection measures helped limit the immediate damage.
There is no verified evidence that the bank's failure permanently deprived thousands of technology workers of their earned salaries.
The most accurate description is that SVB's collapse caused temporary payroll interruptions and widespread uncertainty across the startup industry.
Why Did Silicon Valley Bank Collapse?
The Federal Reserve's April 2023 investigation identified several interconnected causes.
Rising Interest Rates and Securities Losses
SVB invested substantial deposits in long-term government and mortgage-backed securities when interest rates were relatively low.
As the Federal Reserve increased interest rates during 2022, the market value of those investments declined.
When customers began withdrawing money, SVB faced pressure to sell securities at a loss.
Concentration in Technology Companies
SVB depended heavily on technology startups, venture capital funds and life sciences businesses.
As venture capital funding slowed, many startup customers began using their existing deposits to finance operations.
This reduced the bank's deposit base and increased its liquidity needs.
Large Uninsured Deposits
A substantial portion of SVB's deposits exceeded the standard FDIC insurance limit of $250,000 per depositor, per insured bank, for each ownership category.
Large uninsured business deposits made the bank particularly vulnerable to rapid withdrawals during a loss of confidence.
Failures in Risk Management and Supervision
The Federal Reserve concluded that SVB management failed to adequately address interest-rate and liquidity risks.
Its review also found that supervisors did not fully appreciate the bank's vulnerabilities and failed to ensure corrective action quickly enough.
These weaknesses contributed to one of the largest bank failures in US history.
How Did the FDIC Protect SVB Depositors?
On March 12, 2023, the US Treasury Department, Federal Reserve and FDIC announced emergency measures to protect the bank's depositors.
Under a systemic risk exception, the government authorized protection for all deposits, including balances above the normal FDIC insurance limit.
The FDIC transferred deposits and substantially all assets to the newly created Silicon Valley Bridge Bank.
Depositors regained access to their funds beginning Monday, March 13, 2023.
The protection did not extend to SVB shareholders or certain unsecured creditors.
Federal authorities stated that losses associated with protecting depositors would not be borne by taxpayers. Additional costs to the Deposit Insurance Fund were to be recovered through special assessments on banks.
The intervention reduced the risk that otherwise solvent businesses would fail simply because their deposits were temporarily inaccessible.
Who Acquired Silicon Valley Bank?
On March 26, 2023, the FDIC announced that First-Citizens Bank & Trust Company would assume the deposits and loans of Silicon Valley Bridge Bank.
The agreement took effect on March 27.
First Citizens purchased approximately $72 billion in assets at a discount of $16.5 billion.
Approximately $90 billion in securities and other assets remained with the FDIC for subsequent disposition.
Seventeen former SVB branches reopened under First Citizens ownership.
The acquisition allowed much of SVB's commercial banking business to continue within a larger financial institution.
What Happened to Silicon Valley Bank in 2026?
Silicon Valley Bank did not reopen as the same independent institution that failed in March 2023.
Its technology-focused banking operations continued as part of First Citizens Bank.
On October 6, 2026, First Citizens officially launched the First Citizens Innovation Banking brand.
The new division succeeded the former Silicon Valley Bank Technology and Healthcare Banking business, continuing to serve startups, venture-backed companies and other innovation-focused clients.
First Citizens also introduced First Citizens Fund Banking for private equity and venture capital clients.
According to the bank, the rebranding did not fundamentally change the division's services, customer relationships or approach to serving technology businesses.
The development marked the transition of SVB's legacy operations into First Citizens' broader corporate identity.
Silicon Valley Bank Collapse Timeline
| Date | Development |
|---|---|
| March 8, 2023 | SVB announces securities losses and plans to raise additional capital. |
| March 9, 2023 | Customers withdraw more than $40 billion. |
| March 10, 2023 | California regulators close SVB; payroll disruptions affect some technology workers. |
| March 12, 2023 | Federal authorities announce full depositor protection. |
| March 13, 2023 | Depositors regain access to their money; Rippling marks its payroll incident resolved. |
| March 27, 2023 | First Citizens assumes SVB's deposits and loans. |
| April 28, 2023 | Federal Reserve publishes its review of the bank's failure. |
| October 6, 2026 | First Citizens Innovation Banking officially launches. |
What Did the SVB Collapse Teach Startups?
The bank's failure exposed vulnerabilities in the way startups manage cash and payroll operations.
Companies with large balances concentrated in one bank can face significant operational disruption when that institution fails.
Likewise, businesses can become vulnerable through third-party payroll providers that depend on a single banking partner.
The incident highlighted the importance of maintaining diversified banking relationships, monitoring counterparty risks and preparing contingency arrangements for critical payments.
It also demonstrated why effective financial supervision and liquidity risk management are essential to banking stability.
Conclusion
Silicon Valley Bank's collapse on March 10, 2023, temporarily disrupted payroll payments and created serious uncertainty for American technology startups and their employees.
Some workers, including employees affected through Rippling's payment systems, did not receive their scheduled wages on time. However, several documented payment delays were resolved by March 13.
Federal intervention protected all SVB depositors and helped prevent a more widespread disruption to startup operations.
First Citizens acquired much of SVB's banking business later in March 2023 and rebranded its technology-focused operations as First Citizens Innovation Banking in October 2026.
The failure remains an important example of how concentrated banking risks can spread beyond financial markets and affect ordinary employees, even when their employers have sufficient funds to meet payroll obligations.