Following the collapse of Silicon Valley Bank (SVB), tech PRs had a horrible dose of cold, hard reality.
From the outset, the news of the SVB collapse was a great example of the huge problem tech PRs face - and will continue to face in a tough economic climate: our ability to justify why a tech story is an important story.
On Friday 10 March, the day SVB collapsed, the UK front pages were dominated by Gary Lineker’s future at the BBC, and whether football had its commentators or not.
As early as Thursday 9 March, there was an existential threat to future economic growth and the innovation economy, because Silicon Valley Bank was in trouble, with its shares plunging by more than 60%. The mainstream media were mostly burying it in the business pages, with the exception of the Financial Times.
Based on initial murmurings from the Bank of England, business journalists assumed it was a localised problem in a niche area of the UK banking market. Despite this, our prime minister and chancellor were working through the weekend, helping to find a buyer for SVB’s UK arm, while juggling the spring budget. That doesn’t sound “niche” and “localised” to me.
By Monday 13 March, the mainstream press were still hooked on the Gary Lineker story, and it was dominating the front pages.
There’s a painful education gap with the broader media, who didn’t understand the implications of the failure of SVB from the off. If you worked in tech and government, the situation was major. It is still major. Just a month or so on from its collapse, tech companies need an “SVB-like” replacement and lender, particularly in the US, as the venture debt crisis deepens. SVB either funded or served almost half of venture-backed companies and many VCs, because it gave them a route to alternative funding without jeopardising valuations or equity.
Anyone working in tech knows the challenges the sector faces in 2023. According to recent Crunchbase data, European startups raised $10.6 billion in funding, which is down 18% quarter over quarter and a huge 66% year over year, with US investors pulling back from Europe’s startup scene.
So for those tech companies on the receiving end of re-investment or seed funding, their differentiators must be clear, their product to market fit defined, and signs of growth apparent.
Challenge for tech PR
In tech PR, our biggest challenge is education. Answering the “why should people care about this latest AI trend?” or “why does this funding round matter?” or “why should I cover this random tech company I’ve never heard of?” are frequent questions we have to think about when devising communications strategies, and speaking to journalists. But our answers to these questions have never been more important, to help the tech community show its value to the wider world.
SVB was the tech world’s banker, and venture debt provider, when traditional banks said no. It’s still unclear how its strong position in the venture debt sector will manifest itself elsewhere, with potential bank venture lenders hamstrung by a tighter risk management environment. There are very small signs of progress, with HSBC scooping up more than 40 ex-SVB investment bankers to build a new banking practice for tech and healthcare brands, in addition to venture capital funds. But, the devastating news of UK government-backed Tech Nation closing its doors is yet another blow to tech start ups looking for support.
But having said this, tech PR professionals must pull out all the stops. The innovation stories we tell today could generate better outcomes for the sector tomorrow. This is my rallying cry to those fighting the good fight.
If the SVB news is anything to go by, we have a lot of work to do. Let’s do this.
Written by Grace Keeling, co-founder and comms growth partner at agency Made By Giants
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