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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#331

Post by lolinder »

WhatTheFlak wrote: post #303
axlee wrote: post #127

Earlier quoted context omitted.

There was nothing arbitrary about that choice. This bank promised better deals BECAUSE they were not careful enough about the risk it entailed. That was their competitive advantage, and they made bank for it. Well, tough luck, now it's not anymore: it has nothing to do with being a large bank or a small bank, it has to do with healthy business practices.

Wait so now everyone has to sit down and evaluate their banks balance sheet before trying to do business with them? Silicon Valley Bank had nothing wrong with it's business practices other than they were concentrated in one particular industry, and a slowdown in VCs pumping money resulted in them shrinking deposits suddenly. They asked their investors for money, some VCs basically yelled fire in a crowded theatre and…

> everyone has to sit down and evaluate their banks balance sheet before trying to do business with them?

No, if you're not keeping more than $250k in the account, you don't have to do the homework. If you're keeping more than $250k in the account, you can afford to pay someone $1k to do a bit of due diligence.

Re: Urgent: Sign the petition now

#332

Post by version_five »

nwienert wrote: post #38

For posterity, the chefs kiss title of this submission as of now is: “YC Is Asking for a Bailout”

I posted it, I'm aware of the rules about titles, but honestly I thought my title was way more clear about what the story was. In retrospect I should have called it "Tell HN: YC is asking for a bailout", think that would have been fair. The fact that it's been edited here is not cool with me, especially as the story is unfavorable to YC (though I certainly believe readers are smart enough to draw their own conclusions)

Re: Urgent: Sign the petition now

#333

Post by [deleted] »

morelisp wrote: post #318
pixl97 wrote: post #189

Earlier quoted context omitted.

I mean the 250-500k limits have been around for a long time now, that said they are rather low due to inflation. Most larger companies reduce this risk by spreading assets over a number of banks. Just banking with a large bank does nothing if they fail.

Not that long, it was raised from $100k to $250k in 2008. They were up for review last in 2020, and again in 2025. Most people - people - have far, far less than this. And it's fundamentally about protecting people - institutions, like we're discussing here, are supposed to be considerably more risk-aware.

[deleted]

Re: Urgent: Sign the petition now

#334

Post by blagie »

drexlspivey wrote: post #170
blagie wrote: post #92

I'm 100% in support of a bailout... ...with the federal government taking equity in return, at the last valuation, diluting existing owners. That would let the businesses keep running, without the "privatize gain / socialize loss" merry-go-around.

What equity are you talking about? It’s already wiped out, anyone can buy SVB for $1

Equity in startups which had deposits there.

If you need $100k next month to meet payroll, and you had it deposited in SVB, the Fed will cut you a cheque for $100k, and in return, receive $100k in equity at the more advantagous (to the Fed) of your last valuation and your next valuation.

Re: Urgent: Sign the petition now

#336

Post by garry »

UmYeahNo wrote: post #15

When we little guys put our eggs in one basket, or put excessive reliance in business we have no control of we get accused, sometimes implicitly, sometimes explicitly, of being incompetent. That we should've known better. Hmmm.... The cynic in me says this letter is less about bailing out the small companies trying to make payroll and more about the VC's not wanting to lose massive investments.

We're trying to help our founders, and this is a moment where awareness of this problem in DC and in the halls of power matter.

Re: Urgent: Sign the petition now

#337

Post by Toine »

gustaf wrote: post #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…

What does the government have to do with that ?

Re: Urgent: Sign the petition now

#338

Post by bcrosby95 »

garry wrote: post #101
wnevets wrote: post #67

Earlier quoted context omitted.

Government interference in the economy is bad* *Unless it's to bail me out.

FWIW I've never had that perspective, so I'm not sure why you are saying that.

I don't know what your views on all this is.

The problem is many of your peers in your space actively advocate, lobby, and spend lots of $$$ to reduce regulations whose aim is to try to prevent this sort of stuff. SVB themselves were pushing to be exempt from stress tests in Dodd-Frank, which they were successful at achieving back in 2018. If regulation is really a concern, why continue banking at a company that was actively lobbying to be exempt from regulations that already existed?

Anyways, I'm not gonna pass judgement either way. People make mistakes. However, it's a constant battle, and when ground is gained its easily lost. It's a tireless fight against monied interests trying to make more money in any way possible. People are going to understandably be frustrated at petitions like this.

Re: Urgent: Sign the petition now

#339

Post by lamontcg »

nocoiner wrote: 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.

With this being the top-voted sentiment we are so very, very fucked.

In the 2009 crisis the banks got bailed out because we were in the position of very nearly breaking the buck on money market funds. The interconnectedness of the entire financial system meant that we were plausibly looking at a situation where most businesses wouldn't be able to make payroll soon. ATMs could start to not give out cash. The whole short-term lending market was in danger of freezing up solid.

The lesson from that seems to not have been "we need to regulate things better up front so companies cannot make bets that place the system at risk and imperil everyone" but "fuck it, let it all burn down".

And we've got Republicans controlling the House that will drive the financial system into a brick wall hoping that they can blame it all on Biden and take over in the next election.

Honestly starting to think the right idea might be to stock up on food, water, gas and toilet paper like I'm worried about another pandemic and go bury $10k in the backyard. People have gotten fucking insane.

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