RESEARCH TRIANGLE PARK – David Gardner, one of the most active venture capital investors in North Carolina, says his firm Cofoundrers Capital is joining the exodus of account holders at Silicon Valley Bank – up until Thursday a huge financial pillar to the nation’s startup and tech economy.

“We are pulling money out,” Gardner tells WRAL TechWire. His fund recently raised $50 million in investment capital.  “I hate to do this because that is what actually causes a bank to fail but a CEOs job is first to protect his or her venture not the bank. ”

SVB’s future unraveled Thursday, its stock plummeting 60% when news broke that it was facing financial difficulty and attempting to raise capital. Trading in the bank’s stock was halted Friday morning before the markets opened after a further huge decline in stock value.

Top Triangle investor says several clients likely to withdraw funds at Silicon Valley Bank

Gardner says he reached out to the some 30 portfolio members of the Cofounders stable with advice to move on to another bank.

In a letter shared with TechWire, Gardner wrote:
“CEOs, 
“Some of you that bank with or have venture debt with Silicon Valley bank have asked for guidance regarding the SVB meltdown.  I spoke to other VCs and a few bank CEOs this morning.  The conservative advice is to leave only $500K (the FDIC insured limit) in SVB if you bank there.  The less conservative guidance would be to move at least half of your deposits to another bank in case access to your accounts at SVB are restricted for a while.  The general consensus is that the gov’t will bailout SVB or another bank will buy it and all funds will be secure and accessible in time.   If you have venture debt with SVB we strongly suggest modeling contingencies should your note be called.  We know of at least one company that is having its note called on a covenant technicality.”

Silicon Valley Bank woes rattle entrepreneurs; stock plummets again, trading stopped