In an open letter addressed to US Treasury Secretary Janet Yellen and various other Chairmen, Garry Tan, CEO and President of Y Combinator, expressed concerns over the rapid failure of Silicon Valley Bank (SVB), one of the leading financial institutions that have been supporting the technology industry in the United States. The letter emphasizes the critical impact on small businesses, startups, and their employees who are depositors at the bank, as the bank's failure has already instilled fear among founders and management teams to look for safer havens for their remaining cash, which can trigger a bank run on every other smaller bank.

Garry Tan initiated a petition to ask regulators to step in and implement a backstop for depositors. Tan stated in the petition:

"This is not a bank bailout. This is a way to ensure small businesses are made whole."

This petition has been signed by more than 1,200 CEOs and founders, representing a combined workforce of over 56,000 employees.

According to the letter, the National Venture Capital Association states that Silicon Valley Bank has over 37,000 small businesses with more than $250,000 in deposits. These balances are now unavailable to them, and without further intervention, may be inaccessible for months to years. The letter also mentions that one-third of startups with exposure to SVB used SVB as their sole bank account, and as a result, they will fail to have the cash to run payroll in the next 30 days.

"Small business depositors at Silicon Valley Bank should be made whole. Regulators need to conduct a backstop of depositors. We are not asking for a bank bailout." the letter wrote.

"Longer term, Congress should work to restore stronger regulatory oversight and capital requirements for regional banks, and any malfeasance or mismanagement on the part of SVB executives leading to this failure should be investigated." the letter added.