“It appears to me that there was no liquidity issue until a couple of VCs called it,” Greene said. “They were irresponsible, and then it became self-fulfilling.

The bank's downward spiral began when it surprised investors with news that it needed to raise $2.25 billion to shore up its balance sheet, leading to a bank run that saw customers withdraw $42 billion of deposits. Some members of the venture capital (VC) community have blamed the VCs for causing a "hysteria-induced bank run" that led to the bank's demise.

SVB primarily serves startups in Silicon Valley. The bank suffered from dislocations caused by higher rates and the withdrawal of deposits by startup clients. The sudden need for fresh capital sparked another wave of deposit withdrawals, leading to concerns about a bank run. The CEO's attempts to instill confidence were unsuccessful, and the stock continued to collapse.

On Thursday, SVB customers received emails reassuring them that it was "business as usual" at the bank. By Friday, the bank ditched efforts to sell shares and instead looked for a buyer. However, the bank's flight of deposits made the sale process harder, and that effort failed too. The California financial regulator stated that the bank is now insolvent due to a deposit withdrawal. Depositors face an uncertain timeline for retrieving their money, with insured deposits expected to be available as early as Monday, but it's unclear when the uninsured deposits will be freed up.