You'd think if there was one place on earth where one would be wary of single points of failure would be the SV startup ecosystem ...
Urgent: Sign the petition now
221–230 of 864 posts
Re: Urgent: Sign the petition now
#222Earlier quoted context omitted.
These are depositors of a bank. Most startups only have one bank. Startups should live or die because they create good products and solve real problems in real markets, not because they made an arbitrary choice like which bank they started using. There's also a real risk of bank contagion if it is only safe to deposit in the largest banks.
Why do startups only have 1 bank? I own a bootstrapped startup with literally just 1 employee and am easily able to get an account in Chase or Citi. Why do startups with much more revenue not able to get the same account in major banks?
SVB was a major bank and most businesses in the USA only have one bank. Once you have an established relationship it’s just easier to do all of your banking with that bank.
Re: Urgent: Sign the petition now
#223Earlier quoted context omitted.
110% agree. At some point, risk HAS to be treated as what it is, risk, rather than just "another way to do things". We have so many banks treating risk as what it is, and pricing for it, well these people decided to go to another bank to get funding, well deal with it. It's not like the average citizen has this luxury.
The equity holders and management of SVB are likely to be wiped. In the petition we specifically call this out: we are not asking for their risks to be "socialized." Depositors have a reasonable expectation that when they choose a bank (especially a publicly traded bank that is regulated) that their deposits are safe. If this is not true, then most people will only bank with the largest banks. That's not a good situa…
Just to clarify, these depositors specifically exceeded the FDIC deposit insurance limit (250K), right? That isn't a new or unknown rule; either through ignorance or calculated risk, those depositors that exceeded the limit took a chance.
I don't disagree that something should be done in the future to prevent this, but when you gamble, sometime you lose.
Re: Urgent: Sign the petition now
#224Where was YC when SVB lobbied against stronger regulation so they could take more risk? Crickets. Edit: Sources in my other comment https://news.ycombinator.com/item?id=35114110
We are advocating better regulation to prevent this from happening in the future. It's in the petition.
"in the future"... I think that sums it up pretty well.
Re: Urgent: Sign the petition now
#225LOL, nope. Not interested in taking another spin on the “privatize gain, socialize loss” merry-go-round. The banks had to be saved in 2008 because they were, like, the financial system. I don’t see why private companies and funds that are much less integral to the functioning of the economy as a whole should be saved by the public fisc. Sorry about your disruption.
These are depositors of a bank. Most startups only have one bank. Startups should live or die because they create good products and solve real problems in real markets, not because they made an arbitrary choice like which bank they started using. There's also a real risk of bank contagion if it is only safe to deposit in the largest banks.
A competent CFO probably would have helped.
Re: Urgent: Sign the petition now
#226LOL, nope. Not interested in taking another spin on the “privatize gain, socialize loss” merry-go-round. The banks had to be saved in 2008 because they were, like, the financial system. I don’t see why private companies and funds that are much less integral to the functioning of the economy as a whole should be saved by the public fisc. Sorry about your disruption.
> The banks had to be saved in 2008 because they were, like, the financial system. There was a false choice there because there are multiple options that were strategically ignored by the people who own the banking system. The financial system can be replaced. The crypto people haven't been getting bailouts AFAIK and it doesn't seem to be hurting the ecosystem; we're running side by side experiments despite the best…
The crypto people would be getting a bailout through USDC - which is exactly why I don’t support this as a web3 developer. The ideal for crypto is a free marketplace and bad products that failed to do due diligence, were negligent, relied on false government promises, and lied to users must be allowed to fail.
Re: Urgent: Sign the petition now
#227Should have started with “ We are not asking for a bank bailout. ” Edit: my opinion reversed. I actually with the replies here. It is effectively what YC is asking for. It’s a matter of choosing who suffers: investors or private home buyers? Because Mortgage Backed Securities have been screwing individual home buyers for years.
No. Because that’s what they’re asking for but again, it shouldn’t sound like that.
Re: Urgent: Sign the petition now
#228Lol so they don’t want to take a loss, is that it? They invested and may go bankrupt.
Nothing bad will happen if these startups run into issues. The most solid will have revenue, they may have to get a loan. The less solid could layoff and raise more. Some might go bankrupt, but that’s part of the risk.
Sometimes people get fired, no back pay, and they have to make it work. In way of a different example, imagine a farmer losing his crop & tractor in a storm. They have to make it work.
Companies are really no different.
Re: Urgent: Sign the petition now
#229Earlier quoted context omitted.
Are you saying if I deposit more than $250k (which is NOT a lot for a business) into a reputable and regulated US bank at negligible rates of interest I should just accept the impact of the bank shutting down due to events unrelated to my actions and choices? And that my deposit should vanish into thin air?
SVB lobbied to not be regulated as strongly as other banks, and won. You would be perfectly fine at most other banks. This was a choice. https://www.theguardian.com/business/2023/mar/11/silicon-val... Edit: https://www.levernews.com/svb-chief-pressed-lawmakers-to-wea... > Eight years before the second-largest bank failure in American history occurred this week, the bank’s president personally pressed Congress to redu…
So SVB owners should take losses.
Not those who had bank accounts there and literally did nothing wrong to cause this or even contribute to it.
Re: Urgent: Sign the petition now
#230Unpopular opinion: the government should try to make depositors of banks whole when their banks fail.