Silicon Valley Bank is known for serving venture capital firms and the local tech startups those firms invested in. On Wednesday, the bank announced a bunch of bad news. It sold almost all of its securities, some $21 billion worth, at a $1.8 billion loss because deposits dropped quickly. The bank said this was because VC-funded companies were burning cash faster than it expected — at exactly the time when VC funding has slowed. To fill the hole in the balance sheet, the bank tried to sell $2.25 billion in new shares. That sale failed, Reuters and CNBC say.

While the Federal Deposit Insurance Corporation (FDIC) insures bank deposits up to $250,000 even in the event of a bank’s collapse, the deposits of many corporate customers are far beyond that mark. In its last annual 10-K filing, Silicon Valley Bank estimated that, at the end of 2022, it has deposits of $173.1 billion, with about $165.4 billion, or nearly 96 percent, uninsured by the state or federal government.

Rising interest rates seem to be the main culprit here. Not only did the rate hike slow VC funding but also startup companies have been burning the cash they kept deposited in the bank. And higher interest rates meant that when Silicon Valley Bank sold its bond portfolio, those bonds were worth less money.

Issues tied to rising interest rates and overall volatility are shaking up a number of smaller banks, with San Francisco-based First Republic Capital’s stock dropping after its parent company also announced a sale of assets for similar reasons, along with PacWest Bancorp.