Silicon Valley Bank (SVB) collapsed with stunning speed on Friday, March 10, 2023. Just before the bank’s failure, Alison Greenberg, co-founder and CEO of Ruth Health, received a message from one of the company’s seed investors urging her to withdraw her company’s depository funds from SVB immediately. After consulting with other company investors and network connections, Audrey Wu (co-founder) withdrew funds in various increments to avoid triggering SVB’s algorithmic withdrawal limits while bringing the accounts at or below the FDIC’s $250,000 insurance threshold. Absent these actions, Greenberg and Wu would have been unable to pay their employees. Greenberg and Wu openly prioritized protecting their team of employees and the patients they served, which suggested a servant leadership management style. This incident not only highlighted the importance of trusting one’s chosen bank for deposits, but also the importance of trusting peer companies that use the same bank for deposits exceeding the insurance threshold. This case is relevant to undergraduate and graduate students in leadership and management courses (such as Essentials of Leadership, Advanced Leadership, Management Skills, Ethical Leadership, etc.) and Economics courses (such as Game Theory). It requires students to consider game theory principles when assessing risks. 

Experience level
Intermediate
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Brian A Marks, University of New Haven

Aaron S. Marks, Iona University