There’s a lot of virtual pearl-clutching going on at the heart of the startup kingdom of VCs and its pet piggy bank, Silicon Valley Bank (SVB). With no desire to try and rehash the reasons why a region known for its lack of hubris would suddenly find itself facing the realities of macroeconomic storms, we need to look at what this means to the broader universe of tech startups, particularly those working on display technologies.
When Your Bank Doesn’t Have George Bailey to Keep it Honest
The news has gone around the world, SVB collapsed last week, and its crash was hastened by Tweets from the VC community in Silicon Valley urging their portfolio companies to get their money out of the bank, causing a run on deposits. The process of going from a bank that was looking to raise money to cover losses by selling shares to a rapid loss of funds as people pulled their money out, making their liabilities deteriorate even quicker was, ironically, due to technology, specifically the fact that account holders could use online banking and electronic transfers to move their money quickly.
Does any of this have any bearing on the display industry? Well, not for the big panel manufacturers in China and South Korea. But, it does have implications for new technology companies hoping to capitalize on opportunities in the shift to organic materials in display design and manufacturing. It could actually turn out to be positive.
The first thing that you can take away from the collapse of SVB is that if it were any other regional bank, you probably would have felt bad for some local depositors, left it to the FDIC to sort out the mess, and you would have moved on. Banks fail all of the time. Not one this big since the 2008 financial collapse, but still, stuff happens. This is happening at the favorite bank of the hive-minded VCs of the valley, their home court, where the companies they invest in live, work, and, in turn, are encouraged to put their money.
It’s humbled a whole region that has been immune to that word for many, many years. In fact, you would probably be just as right in thinking that they are faking hubris right now and all they want is a bail out. I mean, this is the place where Google’s founders wrote about how they were skeptical about advertising when they were starting out because it would distort search results, and then went out and built a company that does nothing but distort search results to get ad dollars.
The upshot of all this angst over SVB’s Icarian fall is that it is going to force VCs and their portfolio companies to diversify. Everyone will find a new bank, and the mystique of being on the books at SVB evaporates.
Startups are Everywhere
All startups are not in Silicon Valley. VCs in Silicon Valley don’t have all the startup money, either. With SVB at the heart of seeming all the money going around the tech ecosphere, it was a club that was hard to break into, and everyone in tech, at some point, tries to break through and find a place at the table with all the peacocks strutting around, and talking about disruption, and paradigm shifts, and all that.
| Company Name | Location | Description |
| Avegant | United States | Develops light field displays for use in VR headsets and other applications. |
| Dispelix | Finland | Develops near-eye display components for use in AR/VR headsets and smart glasses. |
| DigiLens | United States | Develops waveguide displays for use in AR/VR headsets and other applications. |
| FlexEnable | United Kingdom | Develops flexible displays for use in wearables, automotive applications, and other products. |
| Holo-Light | Austria | Develops software and hardware solutions for AR/VR applications, including holographic displays. |
| Jade Bird Display | China | Develops flexible OLED displays for use in smartphones, wearables, and other devices. |
| Light Field Lab | United States | Develops holographic displays that project 3D images without the need for glasses or headsets. |
| Mojo Vision | United States | Develops contact lenses with integrated microdisplays, which can display augmented reality (AR) information directly to the user’s eye. |
| Ostendo Technologies | United States | Develops MicroLED displays for use in AR/VR headsets and other applications. |
| PlayNitride | Taiwan | Develops MicroLED displays for use in consumer electronics, including smartphones, smartwatches, and AR/VR devices. |
| VueReal | Canada | Develops MicroLED displays using a proprietary nanowire printing technology, which can be used in a variety of applications, including AR/VR headsets and smartwatches. |
| Ximmerse | China | Develops AR/VR headsets and related software and hardware, with a focus on enterprise applications such as training and simulations. |
Display startups don’t fit into the typical profile of a Silicon Valley venture. They are normally niche IP companies, with no cornering of a consumer market, and no high-margin service model that scales rapidly with every added AWS instance. Display startups probably have a hard time getting the recognition and cash that they need. It’s not cheap to be in display tech, either. However, if the bubble around the valley has truly burst, and if the fall of SVB signals a change in the bottleneck that was the Bay Area startup scene, there’s going to be a lot of space opening up for startups that couldn’t find a fit there.
But, for the sake of balance, there is another side to SVB that should not go unnoticed. This is the side that is referenced in the quote below, from one of the most powerful VCs in the world, not just the valley.
Before SVB sprang to life, it was difficult, if not impossible, for a start-up to secure a relationship with a large, established bank. Small west coast technology companies were incomprehensible or insignificant to the large east coast banks whose customers included international airlines, heavy industry, and nationwide retailers. Our companies, often started by people in their twenties, were bypassed or ignored.
Famed Sequoia Capital partner, Mike Moritz
It may be that the rich history of SVB, its supportive beginnings of the maverick business models of Silicon Valley, should not go unnoticed. But, the valley isn’t that cute anymore. It was about 30 years ago. After the dot com boom and bust, the stratospheric rise of Apple, Google, Meta, Tesla, Salesforce, Nvidia, and many other companies that followed, and a pandemic explosion in wealth that just about crushed any little guy that still stood, what SVB was is just nostalgia. So, yeah, it probably means this is the end of an era. I think that could be really good for startups in display tech because they actually produce tangible IP. People are going to want to hold to something like that during these trying times.
