SVB was offering attractive loans to account holders, and many took them up on it. If you just got a funding round you are already running your business on bor

SVB was offering attractive loans to account holders, and many took them up on it. If you just got a funding round you are already running your business on borrowed money. Imagine that a bank told you, deposit the cash from that funding round with us and we will give you even more funding! That's pretty attractive when interest rates are super low. When the free money spigot got turned off, mainly by the Fed raising rates, some of the account holders started spending their cash rather than running on more loans. The same increase in interest rates that caused that change in depositor behavior also caused SVB's long-term bond investments to lose value. SVB effectively doubled down on the low-interest rate era by both depending on depositors living on loans (rather than withdrawing deposits) and investing in low-interest long-term investments at the same time.