SVB Crisis: Zerodha CEO Nithin Kamath’s Lesson From Silicon Valley Bank's Failure
On SVB fallout, Nithin Kamath says being pessimistic is an underrated skill for running a business.
Zerodha co-founder and CEO Nithin Kamath said the key lesson from the collapse of Silicon Valley Bank (SVB), or the recent fallout of Yes Bank in the Indian context is to have funds, distributed across various banks, especially working capital.
In a tweet about the SVB crisis, Kamath said that it is ridiculous as to how things can go wrong in a business, right from unforeseen changes to not being able to access money in the bank, as is the case with Silicon Valley Bank.
The tweet read “It is ridiculous how many things can go wrong when running a business. Everything from rapid change to market sentiment to waking up one day and being unable to access money in the bank, like with SVB.”
Kamath believes that for running a business, one of the most underrated skills is being pessimistic. He added, “Every business will be exposed to a black swan event at some point; the idea is to survive those.”
The Silicon Valley Bank collapse has shaken the international markets and has also raised concerns about other banks facing similar challenges.
On March 10, 2023, the California Department of Protection and Innovation closed tech start-ups-focused SVB and appointed the Federal Deposit Insurance Corporation (FIDC) to take control of the bank’s deposits.
Read More stories around the ongoing SVB Crisis