SVB collapse spared an already muted venture deal market

Many originally thought this could have wider implications on the struggling VC ecosystem

When Silicon Valley Bank collapsed earlier this month, venture had already been navigating choppy waters for over a year as it confronted overinflated company valuations and a seemingly nonexistent exit market.

But while SVB’s failure may have a long-lasting impact on the banking and venture debt industries, it doesn’t look likely to have any lasting adverse impact on one of venture’s hardest-hit areas: deal activity.

Venture capital deal volume has been almost steadily declining since the beginning of 2022. While many investors and founders hoped for some relief in 2023, that hasn’t materialized — yet, at least. So far, January and February have continued trending down, according to Crunchbase data, with global funding in February totaling $18 billion, the lowest total since February 2020.

With deal-making in such a vulnerable state, it seemed like any market trigger could have an impact, but lawyers and VC firms told TechCrunch+ that the demise of SVB doesn’t look like it will make things any worse. It seems that any pause the news did create for investors and founders has likely already passed.