YC's made $70 billion dollars from them. YC asking for assistance on their behalf is socializing the loses.

YC didn’t make SVB’s decisions or cause any of this and most SVB customers were not YC startups.

Your suggestion is equivalent to saying that if I were to support hundreds of kickstarters for various board games and resell them for a profit to collectors over the years and then kickstarter imploded after taking on extreme financial risks, then I should bail out all the new customers of kickstarter who paid and didn’t get their games. It makes no sense. The people running kickstarter should take the hit, not someone random other party working in their ecosystem.

SVB owners should get wiped out, not the people or companies who opened bank accounts.

The failure of the bank is certainly not YC's fault.

But, much of the profits they made, and losses they are now incurring are both a consequence of the zero interest rate environment and it's current unwinding.

If the goverment bails out YC's companies, when they are successful later, who is going to benefit the most from that?

As I said, most SVB customers were not YC startups.

There are thousands of businesses using SVB. If they only know they have 250k coming in the near future, and can’t be sure they’ll make payroll, what do you think happens to all of their employees? Or the other businesses relying on their products? Or anyone they owe?

This is the second largest bank failure in US history, and for now it’s confined to a single bank and the cost to stop the fallout is relatively low.

If decisive action is not taken by the end of this weekend, it’s going to get much, much worse.

> then kickstarter imploded after taking on extreme financial risks, then I should bail out all the new customers of kickstarter who paid and didn’t get their games

But what you're saying is the same thing: that taxpayers (random third parties who weren't even working in their ecosystem) should take the hit instead.

Addressing systemic risks that individual actors aren’t well incentivized to handle is part of what governments and taxes are for. The $250k of FDIC insurance per bank customer exists because otherwise incentives drive bank runs even for banks with broad consumer bases.

Spending taxes on preventing financial meltdowns from cascading actually makes the government and its citizens wealthier than not doing so.

But we're talking about businesses here. They are certainly well-incentivized to properly handle the money in these amounts. The risk of losing it (and potentially the business) sounds like excellent incentive.

From my POV, they did "properly" handle their money by putting it in a large, trusted bank with a great reputation and focus on their type of business.

What was your cash management strategy with your startup (assuming you have relevant experience)?

What growth engine? How many tech companies founded in the last 15 years are actually consistently profitable? The only one that comes to mind of note is AirBnb even if just started turning a profit.

> AirBnb

Honestly, if AirBnb is the poster child of tech startups, the only sensible thing to do is let this whole tech scene burn to the ground and salt the earth afterwards.

Who cares if it's 99% of GDP of that is going into the hands of venture capitalists?

Anyone who has really looked at the 2nd order effects.

SV-style tech startups distribute more equity to employees than any other sector of business I know of and the average VC’s returns are worse than private equity, worse than the stock market and worse than real estate. You only hear about the biggest winners, but venture capitalists are taking on very long odds and the vast majority lose. More importantly, we all benefit from the advances the industry leads to—such as this wonderful phone I’m typing this comment into that can access and search nearly any encyclopedia, map or song in the world in seconds, from almost anywhere.

Equity that will statistically be worthless?

You might as well say Hasbro distributes more money than most companies because of all of the Monopoly games they sell.

If startup equity is worthless then that will usually mean the VCs make no return on their investment.

If VCs make no return on their investment then they have just dumped millions of dollars into the pockets of startup employees and vendors.

And those employees would be statistically better off working for one of the public BigTech companies that give salaries + RSUs.

I can trade my RSUs for real cash every six months after they are deposited in my account. I know the potential value of my next RSU grant every 15 minutes as it is updated on my Google Sheets.

The VCs make a return by diversifying their bets. But as an employee for a startup, you are not well diversified.

On a related note, Warren Buffett made a bet with hedge funds that he could have better returns just by investing money in an index fund over 10 years - he won

No disagreement here. Ignoring the other pros/cons of BigTech vs. startup work culture that some might mention, many startup employees would take BigTech jobs if they could. Not everybody can land a BigTech job though.

Been a while since I've seen the trickle down economics argument

> such as this wonderful phone I’m typing this comment into that can access and search nearly any encyclopedia, map or song in the world in seconds, from almost anywhere.

Cell phones were not created by tech startups.

No, but most the apps on my phone were. This includes the web browser itself (pioneered by Netscape), Google search, web-based email (Hotmail), mapping (Mapquest), and many, many others.

Or… also to all of the people employed by the startups?

You mean the 'independent contractors'?

All of those VC-backed companies are out there spending that VC money by paying it to employees.