Adam Falkof Quoted in National Law Journal Article About Possible Broader Impact of Silicon Valley Bank Collapse
Adam Falkof, Real Estate partner in the Quarles & Brady Chicago office who also advises on Emerging Growth Companies and Venture Capital, was quoted in a National Law Journal article about what potential changes in the financial services sector as a result of the collapse of Silicon Valley Bank earlier this year.
The article offered perspective from legal professionals about possible regulatory changes, as well as how those in the venture capital (VC) space might respond. Falkof shared his insight about how VCs might adjust to deal with the current higher risk in the market. An excerpt:
Many lawyers reported their clients moved money to big banks, along with some community banks or private lenders. Quarles & Brady partner Adam Falkof noted that for many clients, these decisions were implemented in a matter of hours or days. “It’s not of our fear of losing money because of what the FDIC did,” Falkof said. “It’s fear of inaccessibility.” The concern is: “Can I get my money on Friday for payroll?”
Falkof said in the short-term, that puts additional pressure on startups. “We’ve seen VCs become much more nervous about the funding environment,” he said. “Startup investing is already highly speculative. When you think about the risk, there are three dials: the idea, the team, and the economy. With that third dial—the economy—cranked all the way up, that means investing strategically is monumentally riskier than it was six months ago.”