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Despite SXSW's sunny, hot opening weekend, a Silicon Valley Bank-sized shadow hung over over the conference's tech and venture capital sessions. 

Why it matters: At times, after news of the bank's foundering broke, it felt like a mass group therapy session.

What's happening: On stage, in the middle of their panels, startup executives and investors stared at their devices, and anxious questions about the bank's collapse cropped up in Q&As.

Reign Ventures announced it was canceling its SXSW events because of the bank's failure. 

Executives dropped out of their scheduled in-person meetings to take private calls and manage the crisis. 

Catch up quick: The U.S. government on Friday assumed control of Silicon Valley Bank — where many SXSW attendees park their cash — temporarily shutting all branches and freezing withdrawals.

Yes, but: SXSW hasn't been a dour affair. Pre-planned parties and schmoozing among marketing and sales leaders carried on.  

At a Friday night event hosted by TV streaming service Roku, shortly after it filed an 8-K form revealing nearly $500 million of its $1.9 billion in cash was tied up with SVB, the vibe still felt celebratory — purple glitter drinks, purple snacks, lots of hugs and smiles, per Axios Pro's Kerry Flynn.

The big picture: Austin has spent the last decade-plus attracting investor money and startup ingenuity by marketing itself as a Silicon Valley alternative. A lot of firms who set up shop here have their money entwined with the (suddenly) failed bank.

Between the lines: Messages of sympathy posted on LinkedIn by Austin tech firms to SVB bankers suggest how critical the bank was to so many.

"Silicon Valley Bank has stood by me as an entrepreneur and my companies through thick and thin," John Berokwitz, CEO of real estate tech firm OJO posted on Friday. "We will do the same as it’s the right thing and good for the broader eco system. If tech lost the banking solutions of SVB it would be a big detriment to all involved.

What they're saying: "Being at #SXSW during the #SVB meltdown is like being on vacation in Buenos Aires when Argentina won the World Cup, except the precise opposite in every way," Fast Company editor-in-chief Brendan Vaughan observed on Twitter.

"This is going to be a reset of the venture industry and Austin won’t be immune from that reset," Joe Milam, an Austin-based founder of AngelSpan, which invests in start-up firms, tells Axios. "We're going to see a culling of the current players.

"But Austin and Texas have such a tailwind they'll be among the first to recover."

Zoom in: Making the rounds at SXSW, "about half the people got their money out and half not. And the half that did not are sweating about not making payroll," Henrik Johansson, Austin-based CEO of Gembah, a marketplace for consumer product creations, tells Axios. "The ones that did not are smiling and shaking hands — and also freaking out."

Johansson had banked with SVB for 15 years but was able to get his money out on Thursday after an urgent message from an investor. (He declined to disclose how much his holdings in SVB were.)

"We were able to get our money out right before people couldn't anymore, which felt terrible. I felt morally conflicted: If everybody is doing this, the result is inevitable. But I had a fiduciary responsibility to my shareholders."

What's next: "If I were running a big tech company and had a lot of cash, I'd be looking for fire sales this week," Jason Schenker, chairman of the Austin-based Futurist Institute, said during his session Saturday — "Founding, Funding, and Running a Startup in a Time of Economic and Financial Market Uncertainty."

"Many companies can't meet their payroll," Schenker said. "You're going to see a very fast slew of acquisitions."

Axios requested an interview with the Austin-based vice president of SVB and did not hear back.

SXSW muddles through Silicon Valley Bank misery

SVB's collapse cast a pall over the annual gathering.

Attendees stroll by the Austin Convention Center and SXSW banners.

SXSW attendees outside the Austin Convention Center on Saturday. Photo: Jordan Vonderhaar/Bloomberg via Getty Images

Despite SXSW&#x27;s sunny, hot opening weekend, a <a class="gtmContentClick" data-vars-link-text="Silicon Valley Bank" data-vars-click-url="https://www.axios.com/economy-business/svb-silicon-valley-bank" data-vars-content-id="c34a8a31-629d-427a-82e4-a6628bf44777" data-vars-headline="SXSW muddles through Silicon Valley Bank misery" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/economy-business/svb-silicon-valley-bank" target="_self">Silicon Valley Bank</a>-sized shadow hung over over the conference&#x27;s tech and venture capital sessions. Why it matters: At times, after news of the bank&#x27;s foundering broke, it felt like a mass group therapy session.What&#x27;s happening: On stage, in the middle of their panels, startup executives and investors <a class="gtmContentClick" data-vars-link-text="stared at their devices" data-vars-click-url="https://techcrunch.com/2023/03/10/svb-is-already-the-talk-of-sxsw/" data-vars-content-id="c34a8a31-629d-427a-82e4-a6628bf44777" data-vars-headline="SXSW muddles through Silicon Valley Bank misery" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://techcrunch.com/2023/03/10/svb-is-already-the-talk-of-sxsw/" target="_blank">stared at their devices</a>, and anxious questions about the bank&#x27;s collapse cropped up in Q&amp;As.<ul><li>Reign Ventures announced it was <a class="gtmContentClick" data-vars-link-text="canceling its SXSW events" data-vars-click-url="https://twitter.com/ReignVc/status/1634582688710402048" data-vars-content-id="c34a8a31-629d-427a-82e4-a6628bf44777" data-vars-headline="SXSW muddles through Silicon Valley Bank misery" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://twitter.com/ReignVc/status/1634582688710402048" target="_blank">canceling its SXSW events</a> because of the bank&#x27;s failure. </li><li>Executives dropped out of their scheduled in-person meetings to take private calls and manage the crisis. </li></ul>Catch up quick: The U.S. government on Friday <a class="gtmContentClick" data-vars-link-text="assumed control" data-vars-click-url="https://www.axios.com/2023/03/10/silicon-valley-bank-government-control-fdic" data-vars-content-id="c34a8a31-629d-427a-82e4-a6628bf44777" data-vars-headline="SXSW muddles through Silicon Valley Bank misery" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/03/10/silicon-valley-bank-government-control-fdic" target="_self">assumed control</a> of <a class="gtmContentClick" data-vars-link-text="Silicon Valley Bank" data-vars-click-url="https://www.axios.com/2023/03/10/silicon-valley-bank-run-svb-stock" data-vars-content-id="c34a8a31-629d-427a-82e4-a6628bf44777" data-vars-headline="SXSW muddles through Silicon Valley Bank misery" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/03/10/silicon-valley-bank-run-svb-stock" target="_self">Silicon Valley Bank</a> — where many SXSW attendees park their cash — temporarily shutting all branches and freezing withdrawals.Yes, but: SXSW hasn&#x27;t been a dour affair. Pre-planned parties and schmoozing among marketing and sales leaders carried on. <ul><li>At a Friday night event hosted by TV streaming service Roku, shortly after it <a class="gtmContentClick" data-vars-link-text="filed an 8-K form" data-vars-click-url="https://www.sec.gov/ix?doc=/Archives/edgar/data/0001428439/000142843923000010/wk-20230310.htm" data-vars-content-id="c34a8a31-629d-427a-82e4-a6628bf44777" data-vars-headline="SXSW muddles through Silicon Valley Bank misery" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.sec.gov/ix?doc=/Archives/edgar/data/0001428439/000142843923000010/wk-20230310.htm" target="_blank">filed an 8-K form</a> revealing nearly $500 million of its $1.9 billion in cash was tied up with SVB, the vibe still felt celebratory — purple glitter drinks, purple snacks, lots of hugs and smiles, per Axios Pro&#x27;s Kerry Flynn.</li></ul>The big picture: Austin has spent the last decade-plus attracting investor money and startup ingenuity by marketing itself as a Silicon Valley alternative. A lot of firms who set up shop here have their money entwined with the (suddenly) failed bank.Between the lines: Messages of sympathy posted on LinkedIn by Austin tech firms to SVB bankers suggest how critical the bank was to so many.<ul><li>&quot;Silicon Valley Bank has stood by me as an entrepreneur and my companies through thick and thin,&quot; John Berokwitz, CEO of real estate tech firm OJO <a class="gtmContentClick" data-vars-link-text="posted on Friday" data-vars-click-url="https://www.linkedin.com/posts/johnberkowitz_silicon-valley-bank-has-stood-by-me-as-an-activity-7039936159644336128--4xC?utm_source=share&amp;utm_medium=member_desktop" data-vars-content-id="c34a8a31-629d-427a-82e4-a6628bf44777" data-vars-headline="SXSW muddles through Silicon Valley Bank misery" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.linkedin.com/posts/johnberkowitz_silicon-valley-bank-has-stood-by-me-as-an-activity-7039936159644336128--4xC?utm_source=share&amp;utm_medium=member_desktop" target="_blank">posted on Friday</a>. &quot;We will do the same as it’s the right thing and good for the broader eco system. If tech lost the banking solutions of SVB it would be a big detriment to all involved.</li></ul>What they&#x27;re saying: &quot;Being at #SXSW during the #SVB meltdown is like being on vacation in Buenos Aires when Argentina won the World Cup, except the precise opposite in every way,&quot; Fast Company editor-in-chief Brendan Vaughan <a class="gtmContentClick" data-vars-link-text="observed on Twitter" data-vars-click-url="https://twitter.com/bvaughan71/status/1634314885411622914" data-vars-content-id="c34a8a31-629d-427a-82e4-a6628bf44777" data-vars-headline="SXSW muddles through Silicon Valley Bank misery" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://twitter.com/bvaughan71/status/1634314885411622914" target="_blank">observed on Twitter</a>.<ul><li>&quot;This is going to be a reset of the venture industry and Austin won’t be immune from that reset,&quot; <a class="gtmContentClick" data-vars-link-text="Joe Milam" data-vars-click-url="https://www.linkedin.com/in/joemilam1/" data-vars-content-id="c34a8a31-629d-427a-82e4-a6628bf44777" data-vars-headline="SXSW muddles through Silicon Valley Bank misery" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.linkedin.com/in/joemilam1/" target="_blank">Joe Milam</a>, an Austin-based founder of AngelSpan, which invests in start-up firms, tells Axios. &quot;We&#x27;re going to see a culling of the current players.</li><li>&quot;But Austin and Texas have such a tailwind they&#x27;ll be among the first to recover.&quot;</li></ul>Zoom in: Making the rounds at SXSW, &quot;about half the people got their money out and half not. And the half that did not are sweating about not making payroll,&quot; Henrik Johansson, Austin-based CEO of Gembah, a marketplace for consumer product creations, tells Axios. &quot;The ones that did not are smiling and shaking hands — and also freaking out.&quot;<ul><li>Johansson had banked with SVB for 15 years but was able to get his money out on Thursday after an urgent message from an investor. (He declined to disclose how much his holdings in SVB were.)</li><li>&quot;We were able to get our money out right before people couldn&#x27;t anymore, which felt terrible. I felt morally conflicted: If everybody is doing this, the result is inevitable. But I had a fiduciary responsibility to my shareholders.&quot;</li></ul>What&#x27;s next: &quot;If I were running a big tech company and had a lot of cash, I&#x27;d be looking for fire sales this week,&quot; Jason Schenker, chairman of the Austin-based Futurist Institute, said during his session Saturday — &quot;Founding, Funding, and Running a Startup in a Time of Economic and Financial Market Uncertainty.&quot;<ul><li>&quot;Many companies can&#x27;t meet their payroll,&quot; Schenker said. &quot;You&#x27;re going to see a very fast slew of acquisitions.&quot;</li></ul>Axios requested an interview with the Austin-based vice president of SVB and did not hear back.

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