Why is everyone talking about Silicon Valley Bank?

Silicon Valley Bank headquarters in Santa Clara, California, US, on Thursday, March 9, 2023. SVB Financial Group bonds are plunging alongside its shares after the company moved to shore up capital after losses on its securities portfolio and a slowdown in funding. Photographer: David Paul Morris/Bloomberg

The startup world was thrown into chaos this week when a lender little-known outside of Silicon Valley sparked a wave of panic in tech circles that dragged down banking shares around the world.

Events snowballed after Silicon Valley Bank (SVB) announced a share sale to shore up its finances, following a significant loss on its portfolio. So what does SVB bank do and why has it sparked panic?