Josh Jensen Inspectify
Illustration by Lanette Behiry/Real Estate News

How it felt to have millions in SVB as it failed 

When SVB collapsed, it created some not-so-wonderful thoughts of “It’s a Wonderful Life” for Josh Jensen, co-founder of proptech startup Inspectify.

March 18, 2023
3 minutes

Key points:

  • At first, Josh Jensen thought an email calling out potential trouble with SVB was spam.
  • Inspectify was able to move enough money to cover payroll for a couple of months.
  • Jensen said he’s not giving up on SVB but will take things slow and diversify.

The morning Silicon Valley Bank collapsed, Josh Jensen wasn't necessarily surprised. The shock, and the "It's a Wonderful Life"-ness of it all, actually hit him the day before.

Jensen, co-founder of the proptech startup Inspectify, had just finished a presentation at a conference when he saw an email that he first thought was spam.

The email was from one of his investors, and it said "I don't know if you saw the news but there is some potential trouble with SVB and we want to support them as a partner but advise you to pull some cash out," Jensen recalled.

And that's when Jensen realized that "every VC in the Bay" was probably sending similar emails to a whole lot of companies. And he saw Twitter light up.

"It just became quite obvious what would happen," Jensen said.

The bank run was on, just like in the holiday classic movie, "It's a Wonderful Life." Except this was real, unfolding at gig speed and in full color.

"We can talk about whether it was right or wrong, but at the end of the day, you want to protect your portfolio," Jensen recalled.

And so Jensen and Inspectify made their move: Pulling capital out of a depository account into Treasury bills as a "quick hedge" to get additional FDIC protection. They also withdrew two months worth of capital. And then it was a waiting game.

"Eventually nobody would pick up the phone [at SVB]," Jensen said.

This is why, when the news of SVB's failure broke on March 10, Jensen wasn't surprised. And, fortunately, his company wasn't without resources and a plan for how to proceed.

Inspectify, which has about 50 employees, pulled them together to explain the situation in a transparent way. Yes, Jimmy Stewart was mentioned. 

"We told them our investors have our back and are supportive … that we have enough capital to make payroll for a month to two months … but we don't know what's going to happen," Jensen said. 

He told employees that they'd know more on Monday, but that there wasn't a lot they could do before then except try to breathe through it. And by Monday, the government had stepped in and guaranteed all of SVB's deposits.

In some ways, Jensen's journey with Inspectify prepared him for this moment. He started the company — which connects home inspectors with home buyers — three years ago, just as the pandemic hit. Then came the real estate boom of 2021, followed by the bust of 2022.

"I feel like every year we have a black swan event," he said. "It's just been so exhausting."

Even with black swans apparently traveling in flocks, Jensen said, "the reliability of my bank was not one that ever crossed my mind."

While things are different now, Jensen's not going to give up on SVB. They'll be part of a more financially diversified picture, and he'll get back into business with them slowly.

"They were a good partner for us and fill a very needed gap [from a venture debt perspective] for startups that can't just disappear."

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