Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC

Re:Joint Statement by the Department of the Treasury, Federa... by BadCookie on Monday March 13, 2023 @10:24AM (#35136104)

What price are VCs paying for concentrating too much of their portfolios into a bank that was careless? No price. And that is what is upsetting some people.

The VCs didn’t concentrate their money like this for no reason. They got some benefit out of it, surely (easier access to loans for their portfolio companies, I suspect). And VCs are, or should be, sophisticated enough to be accountable for concentrating their capital without purchasing insurance.

There’s no clear way for VCs to pay the price they should pay without some startups being collateral damage. I think that’s the crux of the disagreement about what should have been done.

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Re:Joint Statement by the Department of the Treasury, Federa... by astrange on Monday March 13, 2023 @04:21PM (#35141929)

VC portfolio companies don't need loans; that's what they have all that cash for. It's also why SVB had everything in treasuries because they couldn't loan it out.

Founders used SVB because regular banks, if they see you have a failed startup in your history, won't give you a home loan.

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Re:Joint Statement by the Department of the Treasury, Federa... by BadCookie on Monday March 13, 2023 @07:19PM (#35144637)

Venture debt is a thing. I worked for a startup that had a loan through SVB ... so I don't think you're quite correct, though I don't know how common those loans were.

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Re:Joint Statement by the Department of the Treasury, Federa... by BadCookie on Monday March 13, 2023 @07:30PM (#35144789)

In fact, here's a page on the SVB website about venture debt: https://www.svb.com/startup-insights/venture-debt/how-does-v...

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