Will Canestaro, managing director of Washington Research Foundation and WRF Capital, was contacted by GeekWire on Friday to seek his opinion on how the closing of Silicon Valley Bank might affect biotech firms and the IT sector. Here is his response.

SVB was a crucial and well-connected node in the ecosystem of startups and venture capital. It can only be removed from the financial system by hurting privately held businesses and the economy.

I've been getting calls and emails all day, and we've been determining how exposed our portfolio firms are to SVB. The federally insured limit will be sufficient for most early-stage and lower cash-burn startups to cover payroll and continue operating until everything is resolved.

However, larger businesses will rely on Santa Clara's DINB to promptly resolve the issue.

Remembering that a crisis of confidence isn't always a crisis of fundamentals is crucial. All signs point to SVB's assets being more significant than its liabilities. My current worry is when money will be available rather than whether or not SVB deposits will be lost.

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 I'm also encouraged by the FDIC's prompt and decisive response, which suggests they have been watching the situation since the beginning of the week. Regulators have a lot to gain by continuing to encourage a soft landing.

The most likely scenario is that a plan will be developed over the coming weeks, the assets of SVB will become accessible for withdrawal, and another bank will buy out SVB at a slight discount. The things I'll be keeping an eye out for are:

Investor irrationality for VCs with cash held at SVB over the following few weeks. The insured $250,000 won't be enough to cover large and later-stage enterprises with considerable assets encumbered in SVB until this is resolved.