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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#401

Post by nightmarish »

garry wrote: post #191
toomuchtodo wrote: post #42

Earlier quoted context omitted.

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…

We are asking for new regulation that would prevent this from occurring.

[flagged]

Re: Urgent: Sign the petition now

#402

Post by hyperpape »

simonw wrote: post #261
afavour wrote: post #57

[deleted]

Groupthink on this kind of decision is usually a feature, not a bug. When you're a startup founder, you have to focus your efforts on the unique problem you are trying to solve. For generic problems like "which bank should I use" taking a shortcut like "the one my peers are using already" is generally a great idea - saves you from having to waste your time investigating options that usually don't make a material diff…

I think this is debatable. Let

    P = group makes better decisions than individual 
    Q = there’s no downside to everyone making the same decision

    P && Q => yay groupthink
    ~P && Q => could go either way
    P && ~Q => could go either way
    ~P && ~Q => groupthink is bad
I think we have pretty good evidence of ~Q though, and P isn’t obvious. Was SVB better than throwing a dart at a picture of major banks? I can believe it, but I haven’t heard a substantive reason.

P.S I mean for “not obvious” to be load bearing. Upthread, someone says SVB is much easier to work with for founders. If so, maybe it was a reasonable decision. But if so, that’s on the merits (aka P && ~Q).

Re: Urgent: Sign the petition now

#404

Post by cactusplant7374 »

garry wrote: post #315
jimrandomh wrote: post #37

Statement by the FDIC: https://www.fdic.gov/news/press-releases/2023/pr23016.html Key paragraph: > "All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDI…

$250,000 will be available initially, which is doable for payroll of up to 15 to 25 people for one month, generally if you're a startup. FDIC website indicates remediation time in the months-to-years. This is the concern.

Why did YC encourage startups to put their eggs in one basket?

Re: Urgent: Sign the petition now

#405

Post by somewhereoutth »

altdataseller wrote: post #129
garry wrote: post #90

Earlier 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?

Possibly 'bootstrapped' is the key factor here - many non-bootstrapped startups will want to open an account with a very big cheque and little else (from the bank's point of view), and likely will fall foul of Anti Money Laundering policies.

Re: Urgent: Sign the petition now

#406

Post by oldgradstudent »

tikkun wrote: post #157
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.

Disagree. People who invested in SVB should be wiped out, probably. People who deposited in SVB should not be wiped out. Depositors in banks aren't expected to do due diligence on the financial statements of the bank they're depositing in. Have you read the 10-K filings of your bank in detail?

> Depositors in banks aren't expected to do due diligence on the financial statements of the bank they're depositing in. Have you read the 10-K filings of your bank in detail?

If you have less than the insured amount you are not expected to do anything.

If you have significantly more than the insured amount you should do your homework and manage your risk. Anyone who was alive during the 2008 crisis should be aware of the problem.

Re: Urgent: Sign the petition now

#408

Post by IncRnd »

DennisP wrote: post #258
gameshot911 wrote: post #62

Earlier quoted context omitted.

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.

Just about everyone in the US who has a business bank account faces that same issue. There have been hundreds of bank failures before this. SVB account holders are not unique and probably won't get special treatment.

Re: Urgent: Sign the petition now

#409

Post by scarface74 »

rahimnathwani wrote: post #185
garry wrote: post #144

Earlier quoted context omitted.

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…

The possibility of changing the rules of the game once it's started can create moral hazard. For example, if people believe that the govt will use taxpayers' money to reimburse funds that were not FDIC protected, then they won't be careful about picking their bank. And it's a lot of money (e.g. 30% loss on $200bn is about $600 per US resident household). But I'm conflicted, because: - the federal administration doesn…

While I saw first hand what happened in 2008 and afterwards I said “fuck it” and let my three underwater properties that were combined worth a quarter million less than I owed go and did “strategic defaults”, I can’t imagine running a business and having my funds spread across enough banks to meet the $250K protected amount and still try to run payroll and meet all of my other obligations.

Re: Urgent: Sign the petition now

#410

Post by Ekaros »

dragontamer wrote: post #297
garry wrote: post #167

Earlier quoted context omitted.

Many startups chose SVB because they were the ones willing to open a bank account for them at all. I remember going to a branch of Bank of America to open a bank account for Posterous and not being able to.

> Many startups chose SVB because they were the ones willing to open a bank account for them at all. I mean, given the epic scale, herd-mentality of tech startup types to cause a $46 Billion bank run in a singular day (March 9th), can you blame them? Its clear that other banks have seen systemic risk in focusing on this sector, and are pickier about choosing their customers. ------- I get that this is a problem in an…

Now I wonder what is the intersection of those asking for this petition and the ones that organised this bank run... As things might not be so bad if it wasn't organised...
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