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Vinod Khosla says fallout of Silicon Valley Bank bust will linger for months

It will take three to six months for the startup world to return to business as usual after the failure of Silicon Valley Bank, the billionaire venture capitalist Vinod Khosla predicts.

Khosla said his firm, Khosla Ventures, encouraged founders of its portfolio companies to leave everything but three months of funds in Silicon Valley Bank. “We didn’t want to cause a bank run,” he said in an interview on Bloomberg Television on Friday. “Unfortunately, all our peers didn’t do the same.”

US authorities have opened investigations into the bank’s collapse. Khosla said he is encouraging companies to put their money back into SVB because “money is safe” there, with the institution under government control.

Khosla was speaking days before he heads to Washington for a dinner with lawmakers to discuss “our technology race and economic war with China.” He said the event was set up “long before current events” and “it’s not really related to TikTok.” TikTok, owned by Chinese parent company ByteDance Ltd., is under increasing pressure from US lawmakers, who have discussed banning the app in the US altogether.

The dinner, earlier reported by the Wall Street Journal, is called the Hill & Valley Forum, and will be attended by other tech leaders, including Peter Thiel.

“It’s related to the larger technological race we have for global technology power,” Khosla said. “Many of us feel the US, and the Western world in general, should invest in technology.”

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