> Funny how everyone loves this idea but it only ever hurts small companies.
Why does size matter? These VC funded "small companies" are so sketchy that they needed their own special bank to manage the risk, and now their special bank just failed.
It's not the government's job to protect the weird VC funded moonshot "business model."
So because traditional banks do not understand these non-traditional businesses they are "sketchy". That's a bit of a stretch. I've worked for two different companies with serious income in the 10s of millions who are still paying their salaries/taxes a decade later that were treated with disdain by traditional banks. One of which used SVB for that exact reason. Neither raised VC.
Nothing about SVB's failure had to do with tech startups. It's entirely because their executives gambled on a giant ball of mortgage debt with the worst timing. And now tech companies are paying the consequence. Much like how everyone else did in 2008.
It's trendy to blame VCs and the tech 'bubble' but this isn't the time. And I should reiterate I don't agree gov should be excusing the bankers behavior to save tech startups.
Market corrections are normal, they need to happen otherwise we just end up with a tiny group of ololigopolies with a free reign from consequences. Bad actors need to be punished.
The only way this sort of hand ours from startups needs to be just like the reaction to 2008 should have been: not punishing small/medium companies for the actions of a $200B bank and their like. YC has a reputation of being wealthy VCs so it does nothing to help this point.