It's no news that Silicon Valley Bank is experiencing some trouble.
Since most startups in the US bank with them, would you like to share some details of your current situation?
Ask HN: How is the SVB situation affecting your startup?
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Re: Ask HN: How is the SVB situation affecting your startup?
#2Personally, I don't think there's a real problem unless everyone panics.
Banks are well-regulated and stable and have been for decades. That said, my investors & cofounder have both expressed gratitude that our startup banks with Mercury and not SVB.
Re: Ask HN: How is the SVB situation affecting your startup?
#3Stripe Atlas has supported SVB accounts for a while. I believe it may have been the only bank account supported at the beginning, but regardless, I suspect there are a lot of Atlas companies backed by SVB accounts.
Re: Ask HN: How is the SVB situation affecting your startup?
#4No plans to move money out. But definite plans to create a new, additional account elsewhere and when payment for current orders in process comes in over the next 30 to 60 days, have those new funds go into the new account. (Basically, diversifying is good, and I shoulda/woulda/coulda done it sooner, but it was never my top priority... until now.)
Re: Ask HN: How is the SVB situation affecting your startup?
#5> most startups in the US bank with them
Is this true? And if so, how was this not a major red flag for investors earlier?
From what I gather as an outsider, it sounds like SVB has most of its assets in the form of loans to tech startups and most of its liabilities in the form of deposits from tech startups. This seems like an obvious recipe for disaster in the event of a tech downturn, no?
EDIT: People have clarified that the bonds are the big problem on the assets side, not the loans. They had a bunch of low interest rate bonds that now have to be sold at a loss because interest rates are much higher.
Re: Ask HN: How is the SVB situation affecting your startup?
#6Personally, I don't think there's a real problem unless everyone panics. Banks are well-regulated and stable and have been for decades. That said, my investors & cofounder have both expressed gratitude that our startup banks with Mercury and not SVB.
Technically, you are not “banking” with Mercury:
> Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
Re: Ask HN: How is the SVB situation affecting your startup?
#7Every single founder I know in Brazil who has an SVB account has either withdrawn their funds or is attempting to open another account with a different bank to do so completely.
Re: Ask HN: How is the SVB situation affecting your startup?
#8> most startups in the US bank with them Is this true? And if so, how was this not a major red flag for investors earlier? From what I gather as an outsider, it sounds like SVB has most of its assets in the form of loans to tech startups and most of its liabilities in the form of deposits from tech startups. This seems like an obvious recipe for disaster in the event of a tech downturn, no? EDIT: People have clarifie…
VC's are generally the ones that actively promoted SVB to their investments. There's literally a branch on Sandhill road.
Re: Ask HN: How is the SVB situation affecting your startup?
#9[deleted]
Re: Ask HN: How is the SVB situation affecting your startup?
#10> most startups in the US bank with them Is this true? And if so, how was this not a major red flag for investors earlier? From what I gather as an outsider, it sounds like SVB has most of its assets in the form of loans to tech startups and most of its liabilities in the form of deposits from tech startups. This seems like an obvious recipe for disaster in the event of a tech downturn, no? EDIT: People have clarifie…
SVB has an extremely low loan to deposit ratio (~.45). Most of their assets are in the form of treasuries, bonds, etc.
Depositor concentration is definitely high but that’s not particularly uncommon in banks (though for one of this size it is). But that concentration is what fueled their growth as well.