The nepotistic trust fund babies who work at VCs have never experienced any pain or loss in their lives. They will lie and cheat to avoid it.

I hope they experience maximum pain and loss.

VC backed founder here whose company is impacted by this.

“Nepotistic trust fund baby” I am not. My family has no money, no connections. I went to Portland State University. I had no VC connections whatsoever.

Our company was originally bootstrapped off of personal savings accumulated by working and living way below our means. No friends or family invested or gave us loans. I’ve had no inheritance and expect none.

We did not see a deposit account as a risky investment in any way.

Did you have more than $250k sitting in SVB? We're you unaware of the $250k FDIC insured limit? Or were you, and didn't act on mitigating this potential problem? Any particular reason?

Yes, I was aware. I don’t think there’s a moral imperative to help us, necessarily. I would only ask that tech depositors not be treated differently due to the schadenfreude I see in this thread.

Consider companies small enough to have no one whose job it is to do finance. As a founder you’re already working long hours and bank failure is not a risk that is top of mind compared to lack of product market fit.

As far as I can tell, everybody is asking that tech depositors get treated like any other uninsured depositor. That being fairly, under the long-established rules.

As a founder, I am sorry that VCs apparently don't help with treasury management. That strikes me as something that should be a clear part of their value prop.

How would you act to mitigate it?

Most banks don’t really like working with startups and sometimes freeze their money over AML controls that don’t play nicely with investor checks. If there’s a way to purchase insurance against this risk, I’ve never heard of it, and it’s probably too expensive for early stage startups.

He was targeting VCs, not founders. I’m sorry you’re going through this though.

He was implying that depositors should be treated in a specific way because of the assumptions he makes about who they are.

You chose profits over morals, and now there are no moral people to save your profit.

Ha ha.

Hope should be reserved for good things. I hope the ones who truly had no idea what they were risking come out better and wiser.

I grew up food insecure.

TBH I don't support the idea of any bailouts, but the idea that someone of your temperament is "making sure people like you don’t get to crash the economy again" doesn't make me feel any less worried.

Public face private face. And good. I’m not here to make anyone on YC comfortable.

Please don’t trample productive discussion on HN. The OP clearly was posting about financial investment issues and not poverty.

But it’s not unprecedented for the VC community to confuse capital issues and human rights issues: https://www.npr.org/sections/alltechconsidered/2014/01/26/26...

The rich want to have their cake and eat it too. If they keep pushing their luck the guillotines will be brought out eventually. It's probably about time they realize they don't get to always win.

It'll get worse if they're bailed out! It would totally change the perception of risk if they'll be saved every time they shit the bed.

Oh no people might continue putting money in bank deposit accounts at banks regulators have said are solid, we definitely don't want people doing things so totally unnecessary and crazy.

what are the implications of a bank that cannot fail no matter how reckless it is with everyones money?

The bank is already shut down, dead, gone, past tense. It's shareholders are wiped out, as they should be. Nobody is calling to save a bank that doesn't exist anymore. We're talking about the depositors. I think this has been confusing to a lot of people.

you're calling for the state to insure 100% of all deposits?

Only when the depositors have lobbyists on their payroll ;)

These are businesses that had a reasonable expectation for their deposits to be there, and we are not advocating for a bailout of SVB's management or equity holders.

Sir you should talk rather firmly to your VC friends who told their portfolio companies to withdraw to maybe not spread FUD next time because things happen. It sucks this time around. Get those founders bridge loans instead of replying to a rando on the internet (though I appreciate the opportunity to interact).

If you want to understand why SVB failed, feel free to read writeups in proper financial publications, like FT or Bloomberg, and please avoid "mainstream" sites by clueless journos with zero finance knowledge. This one is good: https://www.ft.com/content/0387e331-61b4-4848-9e50-04775b4c3...

SVB didn't fail because of "FUD", but because of a dumb decision to invest at the top. SVB is squarely at fault here.

Unpaywalled: https://archive.is/xMscB

I'd like to see a post-mortem or some sort of regulatory investigation to understand how it all went wrong. SVB had a risk management department, so what compelled SVB to make the decision that sealed its fate?

There can be more than one link in a causal chain. The broad problem was bank executive choices. But the urgent problem was a bank run caused in part by VCs telling everybody to take their money out.

> These are businesses that had a reasonable expectation for their deposits to be there

These are businesses who willing took a chance that their deposits might not be there.

The worst part about this is if SVB does get bailed out by the government, everyone will wire their money out anyway. YC is not going to leave their money if it's back stopped again.

So the message is: "Please shore up and reopen SVB, so we can get our funds out. Then you can shut it back down."

We were told the capitalist elites deserve their outsized payouts because of all the risk they took and how that was the most meritocratic thing and how dare Government think to interfere with the beauty of the free market.

Now the risk has shown its downside, Big Government is asked to bail them out?

All I know is: I'd love to go to this casino. Win? It's mine. Lose? The house covers me.