The collapse of Silicon Valley Bank left many companies, mostly startups, scrambling for cash. One such company was Asian food startup Omsom. The company told customers at the time that it had all of its capital in an account at SVB. In the premier episode of the second season of Lead This Way, Omsom co-founder Vanessa Pham tells Yahoo Finance's Brooke DiPalma the lessons she learned from the crisis.
Click here for the full Lead This Way episode featuring Omsom co-founder Vanessa Pham.
Editor's note: This article was written by Stephanie Mikulich.
Video Transcript
SEANA SMITH: Well, it has been one year since the collapse of Silicon Valley Bank, a major wake-up call to the industry that left so many small businesses and investors scrambling to secure their capital, which ultimately led to the demise of the bank. Within a 48-hour period, $42 billion was withdrawn from that bank. In season two of our series "Lead This Way", which debuts this Thursday in our 11 AM hour, Brooke DiPalma sat down with the co-founder and CEO of one of the startups that was impacted by the fallout. Brooke, what did you learn?
BROOKE DIPALMA: Good morning, Seana. I was absolutely-- I sat down with Vanessa Pham, who founded the Saucy Noodle startup Omsom with her sister, Kim Pham. Now, the two sisters found themselves in a bit of a nightmare when they began to hear whispers that Silicon Valley Bank was going under. That's the place where the then-three-year-old company had all of their capital. In our interview for "Lead This Way" season two, she recalled the fear and quick thinking she had in response to that moment.
VANESSA PHAM: Nothing can really prepare you for that type of, you know, uncertainty. I had heard rumblings around, uh, the industry, I was actually at a conference at the time, about people kind of scrambling to pull their money out of Silicon Valley Bank. I immediately had to figure out what our options were. And at the same time, Kim and I started working together on how we wanted to communicate what was going on to our community. And so, when most other brands were kind of running away from-- from communicating about it, we decided to come together and share what was going on. And that ultimately led to, uhm, making a really challenging time something where we felt supported. But, yeah, absolutely to this day, still can't even like fathom how-- how we were able to move through that. It was crazy.
BROOKE DIPALMA: And Vanessa went on to share a few hard-earned lessons learned from the collapse. Those lessons-- lessons, including be sure to diversify where you put your money, research the bank to understand the health and risk of a bank's balance sheet, and build out a support network and contingency plan. Asking yourself questions like, is there an investor that could help you make payroll or is there quick access to short-term capital? But Kim and Vanessa weren't alone. Its investors learned a lot from the collapse too. Elly Truesdell, co-founder of the VC firm New Fare Partners, who's an investor in Anthem as well, she told Yahoo Finance that, well, she learned a lot too. She said that first she said the whole entire VC industry had a quick wake-up call around balance and appetite for risk, forcing them to step back from irresponsible deal making and frothy valuations. And she then said that she learned to be sure to look closely at every contract, partnership, relationship that they're in, and do your due diligence on how companies are managing their portfolio, including who they're banking with. But of course, the Silicon Valley Bank collapse is just one of many obstacles put in front of startups way, especially for female and minority-owned founders. And we learned so much about how Vanessa Phe-- Pham navigated all that and so much more in this new episode of "Lead This Way", guys.