Live data from Hacker News

Urgent: Sign the petition now

ycombinator.com

251–260 of 864 posts

Re: Urgent: Sign the petition now

#251
post #90
post #8

LOL, 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.

Why did startups choose a bank so heavily invested in long duration assets while having long duration liabilities and 0 (zero) interest rate hedges? If VCs told them to open accounts there, what were they thinking? You do due diligence on your founders but skip it on the banks? Guys please.

Re: Urgent: Sign the petition now

#252

Earlier quoted context omitted.

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.

[deleted]

Re: Urgent: Sign the petition now

#253
post #98
post #32

Earlier 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?

I know that 250k cash is not a lot for a company with a few folks on payroll. But why wouldn’t you distribute cash across multiple banks as a business? It hasn’t to be this situation, but if your accounts are flagged for fraud or someone hacks an account, aren’t you safer by distributing cash in multiple banks?

>I know that 250k cash is not a lot for a company with a few folks on payroll. But why wouldn’t you distribute cash across multiple banks as a business?

On the topic of FDIC insurance and startups... I'll put in a shameless plug for a startup I helped launch 20yrs ago: *Promontory Interfinancial Network" https://www.intrafi.com/solutions/depositors/

It was a startup them (now acquired), and created a bank deposit product "CDARS" which took customer deposits and distributed it across (k = N/Even cooler, as k other people did it at k other banks, the service would just swap deposits across all the banks. It was a super-cool and valuable product, and i'm proud to say I helped write the matching engine for it back in 2002.

I realize this doesnt help startups with locked funds at SVB, but I'm pointing out -- there are options out there to have 100% FDIC insured safety for both individuals and startups.

Re: Urgent: Sign the petition now

#255
My feeling is that this request is premature and will ultimately be unnecessary. Unless the conditions inside SVB were far worse than what even the most negative naysayer believed, the advance dividend paid next week will be more than enough to meet payroll for the coming month.

I hope I’m not wrong…

Re: Urgent: Sign the petition now

#256
The FDIC will be releasing cash on Monday so businesses can make payroll and so on.

The eventual return on uninsured deposits will likely be around 80-90c on the dollar.

How can we stop this happening again? Simple: we put back the Basel III rule that SVB lobbied to have not apply to them, the absence of which let them do the dumb things that got them into this position: https://archive.is/gmJxU

Re: Urgent: Sign the petition now

#257
I work as a group partner at Y Combinator. Over the last 48 hours I've talked to numerous founders of YC companies who told me they can't make payroll to their employees next week. In many cases they had raised millions of dollars which is currently locked into their SvB accounts. Even if they get access to the insured $250k on Monday that won't last long and in many cases not even cover the payroll they are planning to run. YC wrote this petition with these founders in mind who in good faith trusted that their money would be safe in Silicon Valley Bank.

Re: Urgent: Sign the petition now

#258
post #32

Earlier 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?

You don't lose everything, only a percentage based on what the FDIC isn't able to recover after the sale of all assets. And - yes.

That process takes a long time. Most startups would be out of business by then.

Re: Urgent: Sign the petition now

#259
Why not get a loan? Can someone explain what fundamental difficulty there is in taking out a temporary loan to make payroll until the FDIC sorts things out and you make X% of your money back?

Re: Urgent: Sign the petition now

#260
post #123
post #47

Earlier 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? Yes, because that is how risk works. > And that my deposit should vanish into thin air? No, you should insulate yourself from that risk, either by spreading o…

>No, you should insulate yourself from that risk, either by spreading out your cash between multiple institutions, or obtaining deposit insurance beyond the government's, or (most likely) both. Why would I do that when I can bank with a too-big-to-fail bank like JP Morgan Chase, Citibank, Wells Fargo, or Bank of America?

In the case of many founders, especially non-US citizens, those banks won’t open accounts for them.
Post reply on HN