While the shuttering of SVB in recent days represents a
material loss to the venture capital and start up industries and to
our clients, collaborators, and friends with Cayman Islands
structures, recent confirmation from the relevant authorities that
depositor funds will be available in full is tremendously welcome
news.

It has also been heartening to see so many industry participants
offering assistance and information to those impacted.

Notwithstanding this, and considering the numerous queries we
have received to date, we felt it worth highlighting the
following:

Short term funding

To the extent that any Cayman entity with deposits at SVB
remains unable to access sufficient funds for its immediate cash
flow needs within the required period, it may consider (as a number
have already) entering into short form loan notes with one or more
of its investors (or indeed with its founders) to help bridge the
gap.

Accordingly, and as noted through various channels previously,
we have prepared template documents that should be capable of being
rapidly tailored to the commercial specifics and are providing this
to anyone (whether or not they are a client of Carey Olsen) free of
charge upon request. Please reach out to the contacts below for
further information.

How to receive and make payments

Without an operational account available, a large number of
founders have been in touch to ask how to make payments or receive
sums (e.g. investment proceeds) at the Cayman level.

While it remains advisable to seek advice that no concerns (e.g.
in relation to tax) arise in each relevant jurisdiction, our view
is that founders should, at least until an alternative becomes
available, consider having such sums received into or paid from an
account elsewhere in the group (e.g. at the LLC level).

It is important however to ensure that the characterisation of
such payment (e.g. as a capital contribution from the Cayman entity
to the LLC) is properly documented. Please contact us for further
information

Which banks are viable alternatives to SVB

At present, we are not in a position to provide a list of
recommended banks that provide the same banking coverage as SVB.
Although we are aware of a variety of possible options from
clients, reports on the applicable terms and conditions (e.g.
minimum deposit balance) vary. We expect that, in time, there will
be ample banking options available, but in the interim, in addition
to the use of other group accounts as above, we would largely
recommend that clients reach out to existing banking contacts for
assistance.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.