The Ratings Game
Emergency measures may have alleviated immediate cash needs, but the rising cost of funding poses a longer-term challenge
Startups may have been saved for now, but the real challenge is how they will get funding over the longer term.
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Even with a lifeline provided by U.S. regulators to guarantee deposits beyond the usual limits after Silicon Valley Bank failed Friday, many startups may not make it to 2024 as funding becomes more difficult to secure, according to Morgan Stanley.
Although actions by the Federal Reserve and the Federal Deposit Insurance Corp. guaranteed the bank’s deposits above $250,000 over the weekend, “the medium-term cash burn issue of start-ups remains as pertinent as it was a week ago,” Morgan Stanley strategist Edward Stanley said…
