Mark Cuban Is Signing The Payroll Check For His Startup

The Silicon Valley Bank’s (SVB) unforeseen fallout has created ripple effects across the U.S. banking and startup sectors.

This is because the SVB was one of the most coveted banks among startup companies and venture capitalists. What was the 16th-largest bank in the U.S. serviced approximately half of all U.S. venture capitalist-backed startups.

Don’t Miss: Elon Musk & Sam Altman Say Scary Good AI Is On The Way – Here’s How Retail Is Investing Millions

Consequently, the banking mammoth’s sudden collapse has resulted in startups scrambling to arrange funds.

Billionaire Mark Cuban’s affordable drug pharmacy startup Cost Plus Drug Co., which launched in January last year, had approximately $3.1 million in Silicon Valley Bank. The historic bank run on SVB, as startups and venture capitalists attempted to withdraw $42 billion, caused the innovation-focused financial institution to halt withdrawals, exacerbating the market upheaval.

Cuban’s Biggest Concern

The biggest challenge Cuban and many other venture capitalists faced is how to make payroll. While the Federal Deposit Insurance Corp. (FDIC) guaranteed the return of all funds held in accounts at the Silicon Valley Bank, the sudden loss of working capital will likely hinder Cost Plus Drug’s operations. Most venture capitalists were trying to gather enough funds to meet the mid-month payroll on March 15.

“ deals with SVB. We had, I think, $3.1 million there, so we’re scrambling and opening up accounts and staying up late talking to banks to get accounts opened up,” Cuban stated on Twitter Spaces. “I’m writing checks on Monday morning first thing to make sure that payroll and payables are covered. is my baby right now — I’m not letting it go anywhere — and so I’m playing offense in every way I know how.”

Read More: Jeff Bezos is Personally Investing Millions Into Startups in This ‘Boring’ Industry – Here’s Why

Cuban plans to write checks using personal funds to meet any working capital deficit.

This is not the only challenge for the billionaire investor. He also had personal holdings of roughly $8 million to $10 million at the failed bank. But Cuban considers himself “fortunate” to have only a small proportion of his personal wealth at the bank.

To stay updated with top startup news & investments, sign up for Benzinga’s Startup Investing & Equity Crowdfunding Newsletter

FDIC’s Response And Challenges Ahead

The FDIC and the Federal Reserve stated that all funds held with Silicon Valley Bank will be repaid to customers. This is over and above the FDIC’s $250,000 insurance obligation. Though the federal agency has outlined a repayment schedule for uninsured deposits — amounts over $250,000 — Cuban is worried about the timeline of repayment.

The FDIC plans to sell SVB’s assets to return account holders’ funds. The agency will do so through an undetermined amount of dividend payments and a receivership certificate as a guarantee for future payments.

See Next: The Startup Behind The Automated Future Of The Fast-Food Industry

The amount distributed as the first dividend payment will have a substantial domino effect on the market. If less than 10% of the total uninsured funds are repaid, Cuban expects a “huge contagion,” adding pressure to the banking system. But a 50% to 60% repayment will likely renew market confidence, according to Cuban.

“If there’s a material amount that covers enough of the startups and the wine industry for the companies impacted to pay their bills and make their payroll, then six months from now we won’t remember the details,” he stated.

Even if approximately half of the total uninsured funds are returned, the billionaire investor still predicts a somewhat small contagion, especially if no news regarding the repayment of the rest of the funds is released.

See more on startup investing from Benzinga.

Don’t miss real-time alerts on your stocks – join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.

This article Mark Cuban Is Signing The Payroll Check For His Startup originally appeared on


© 2023 Benzinga does not provide investment advice. All rights reserved.

Want to get worth reading articles in your email? want to catch what's going on in the world?

We do not spam but sent you only important news stories 🙂

News Agencies

About Author

The latest news from the News Agencies

You may also like

exotic expansion llc best stock picking services

Exotic Expansion LLC: Is it one of few Best Stock Picking Services?

Exotic Expansion LLC: You may have wondered once in a life that if you had someone who can advise you
investing in cryptocurrencies

Are you investing in cryptocurrencies? 4 important points before you invest

Investing in cryptocurrencies Driven by financial backers’ energy, the cryptographic money market as of late crossed the $3 trillion imprint