Where Silicon Valley Bank’s PR went wrong

The bank failure involved some PR failures, too. 

The SVB failure is also a PR failure

Isometric crisis strikes causing business people to panic and flee, financial crisis or wave of unemployment, risk aversion, investors pulling out or selling all assets, the concept of business finance or professional employment

Lisa Ann Pinkerton is founder and CEO of the award-winning Technica Communications, founder and chairwoman of the non-profit Women In Cleantech & Sustainability, co-host of The Earthlings Podcast

As the dust settles on the failure of Silicon Valley Bank (SVB), ground zero might turn out to be a one-two punch of mishandled communications. First, there was a newsletter well read by venture capitalists (VCs) that may have begun an erosion of confidence. Second was what TechCrunch reporter Connie Loizos called a “convoluted press release that was received so badly that it was almost comical.” 

While the snowball of the SVB failure gained momentum as rising interest rates soured their significant bond position, it turned into an avalanche on March 8th when the company put out its press announcement of plans to shore up its balance sheet. The subsequent Zoom call did not allow attendees to ask questions, and SVB CEO Greg Becker’s lackluster communication did not inspire confidence. Becker reportedly asked people to “stay calm” and said, “the last thing we need you to do is panic.” Loizos says these are the very you don’t want to hear from a bank CEO. 



These two communications from SVB had the opposite effect than what was intended, which resulted in what’s being called the first social media bank run. 

At Technica, we know how challenging it can be for public relations professionals to urge investor relations professionals to weave corporate messaging into financial news. We have spent countless hours educating IR teams on the importance of financial communications and the impact it can have on a company’s brand. 

I cannot know what factors specifically led to this fumbled news announcement. However, as a former NPR journalist and CEO of a firm who has worked with many publicly traded companies, I can’t help but wonder how the outcome might have been different if SVB employed some standard crisis communication tactics. As the WSJ reported, “the bank was in sound financial condition on Wednesday. A day later, it was insolvent.”

When reviewing the SVB failure from a public relations lens, several missed opportunities are readily apparent.  

Know who’s talking about you

A developing theory suggests that the panic can be traced back to The Diff, an email newsletter by Byrne Hobart, and an accompanying tweet: “Also in today’s newsletter: Silicon Valley Bank was, based on the market value of their assets, technically insolvent last quarter and is now levered 185:1.”  The Twitter storm that ensued secured 3.5 million views and 380 retweets and quoted tweets.

Evan Armstrong, the lead writer of the business-focused newsletter Napkin Math, points out that nearly every VC he knows reads The Diff. Had SVB been monitoring mentions like this more closely, they might have deduced that VCs would likely start paying close attention to the SVB developments. With this in mind, they could have taken extra steps to release the March 8 information more strategically. 

If the layman doesn’t understand, you’ve lost

The press release SVB wrote is truly awful. You can review my red pen comments on the document here. It assumes the reader is well-versed in the financial markets and offers no context for why the company is taking its actions. Additionally, the announcement mentions that SVB sold approximately $21 billion of securities, resulting in an after-tax loss of about $1.8 billion in the first quarter of 2023. With some thought, this release could have laid the foundation for a message that would have demonstrated stability and evoked confidence. 

It’s common for IR announcements to be dry and full of regulatory language. However, for something as critical as the March 8th announcement, SVB should have considered what implications the press release might have on depositors. This was their chance to set the context of the news and assuage concerns surrounding public confidence in the firm. SVB could have bolstered the information with third-party validation through a quote from General Atlantic expressing their confidence in the firm. A quote from the SVB CEO could have provided further context, and put a human voice to the story. 

Press releases are the first opportunity for companies to ensure people think what they want them to think. In the industry, we call this “messaging pull-through.” The release sets the information’s tone and foundation and how to frame it. Of course, people will think whatever they want to, but at least the release has set a foundation that is beneficial to the company. 

It’s all in the timing

The timing of the announcement was as unlucky as it was unfortunate. There may have been a material reason SVB chose to post its news announcement on a Wednesday afternoon, minutes before the Silvergate Bank liquidation announcement. Maybe they had no choice in the timing. 

That said, suppose that the plans for the new stock offerings were in the works for a few days at least. In that case, SVB could have planned preparations to strategically release the news to give the bank the best chances of controlling the narrative and preventing panic. This could have been done by offering an exclusive interview to a friendly reporter. The resulting news article might have conveyed the information in a way that offered a neutral reporting of the news, with the implied message that SVB was doing this to take a conservative approach to ensure the company’s health. 

The company could have posted its press release at the same time the news article went out. In addition, SVB could have held a press conference on Zoom immediately after the news was live to convey these same messages calmly and orderly to their stakeholders.

Be human

Even though I wasn’t on the disastrous Zoom call, it is reasonable to think that both sides came to the table stressed and worried. The strategy around the Zoom call was likely rushed, yet it’s hard to believe there wasn’t time for at least a short FAQ of messaging for SVB’s Becker to follow. At the very least, he should have gone into that call armed with a list of ways to encourage people on the call to remain confident in the firm. 

No one wants to hear your banker tell you not to panic. Most PR professionals would have stressed to Becker that under no circumstances should he use that word, because once it is uttered, it affirms what people are already feeling. 

Additionally, there was no opportunity for people to ask questions. We frequently work with CEOs who want to hold a press conference and control what’s said by not taking questions, even from friendly reporters. We work with them to understand that their willingness to take questions reflects on their confidence in their position and the news being released. 

By moderating these calls, much can be accomplished. Parameters can be set ahead of time for who gets to ask questions and which questions are addressed. Obviously, being willing to take the questions does not guarantee that things would have gone differently for SVB. Still, it could have allowed them to present the firm in a more human way and more connected to its community of stakeholders. The courage required to take questions on a topic like your company’s health can make a CEO instantly relatable -– and trustable. 

The first social media bank run 

There’s only so much a company can do to control public perception. In the case of SVB, panic rose swiftly. The stock price plummeted, and TechCrunch reports Mark Suster of Upfront Ventures said he heard that “$12 billion exited from SVB…[or]…”6.5% to 7% of [its assets] that left in one day.” Then, Peter Thiel, USV, and Coatue were the first to send messages and mass emails to portfolio companies to pull out funds immediately. 

Bloomberg reports that General Catalyst’s Hemant Taneja said, “the run on the bank was an unintended consequence of many investors trying to do the right thing for their own companies” and that “panic wasn’t the way to handle it.” Instead, he suggests VCs could have guided companies to withdraw enough operating capital for six months rather than pulling out all their cash.

Once the FDIC took control of SVB, the industry rallied around the bank to stem the bleeding. Led by Y Combinator, over 5,000 CEOs and founders representing over 400,000 employees signed this petition imploring the US government to take action to “save American innovation.” Conference calls and backdoor meetings carried on over the weekend between VCs, startups, regulators and politicians, ultimately culminating in what’s being called a “defacto bailout” by the Wall Street Journal Editorial Board. As of this writing, it remains to be seen how much contagion the banking sector will experience. 

Maintaining a positive perception of a brand is paramount for any company, especially when the firm’s health relies on its customers feeling safe. It’s clear SVB’s leadership neglected to consider the emotional implications of their press activities. Had they led with more emotional intelligence, perhaps they could have slowed down events enough to give regulators an opportunity to find the firm a buyer. Perhaps, the bank run could have been decelerated. Perhaps the news of SVB’s troubles would have remained a nascent topic of discussion in startup circles, and not a glaring red flag warning people worldwide that more banking troubles might follow. 

Lisa Ann Pinkerton is founder and CEO of the award-winning Technica Communications, founder and Chairwoman of the non-profit Women In Cleantech & Sustainability, co-host of The Earthlings Podcast


2 Responses to “Where Silicon Valley Bank’s PR went wrong”

    Ronald N Levy says:

    Instantly understandable are Allison Carter who looks and writes like the smartest kid in the neighborhood, and Sean Devlin who is repeatedly identified as one who enjoys “a good pint.” But even if you have both Allison Carter’s intellect and Sean Devlin’s gift for writing clarity despite enjoyment of a good pint, can you imagine what “isometric crisis” means, or where Silicon Valley Bank’s PR and president went wrong? And whether everything proposed in this report would
    actually be lawful?

    Olivia Esquivel says:

    This is an interesting and timely case study into the importance of crisis communication. Author Lisa Ann Pinkerton provides a good example of where Silicon Valley Bank initially went wrong with their response to the crash. By giving a lackluster and scrambled press conference, SVB dug themselves further into an already messy situation. -Olivia Esquivel, writer/editor for Platform Magazine

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