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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#451

Post by nicenewtemp84 »

garry wrote: post #167
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.

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.

There is no way this is accurate. I've started several bank accounts for the smallest most poorly articulated, poorly documented, businesses you can imagine starting from 18 years old. Never had a problem.

Re: Urgent: Sign the petition now

#452

Post by [deleted] »

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.

[deleted]

Re: Urgent: Sign the petition now

#453

Post by haiti_outlaw »

AlchemistCamp wrote: post #72
dougmwne wrote: post #14

I honestly can’t think of a sector less deserving of a bail out.

Why is that? This is small and medium sized venture-backed startups, a sector that’s taken a tiny fraction of US investment but represented a major portion of its GDP growth. They did nothing wrong and were failed by their bank. Why are small tech startups building something new less deserving than say, giant banks that knowingly took extreme risks in 2008, or giant auto businesses that refused to modernize and truly…

> actually innovating and building new things instead of giant incumbents.

Let's not use so much lip gloss on this particular pig.

Many startups are just building some shitty apps that exploit labor in this horrible gig economy while they are kept afloat with VC money until they are dumped into the general public via IPO. This marketing fluff has no place here.

Venture capitalists and startup founders are playing the apex of capitalism. Failure and risk is part of the game. Being saved with taxpayer money is antithetical to that.

Re: Urgent: Sign the petition now

#454

Post by nv22 »

burlesona wrote: post #132

I mean YC and all the VCs killed SVB by causing a run on the bank. This is not the only business that VCs have harmed by spreading FUD (in many cases unfounded or even fabricated with dubious motives), and then acting as a herd. I have tremendous sympathy for the many small startups who had nothing to do with this, but a lot less for the VCs in this case. SVB was well capitalized and while there could be losses here…

Exactly. SVB is well capitalized just by looking at their balance sheet. It doesn't have risky assets-all treasuries. Only problem is liquidity.

It wouldn't fail if these VCs don't spread fears in the first place. Now they want their companies get their money back. They killed SVB and now want to act as victim.

Re: Urgent: Sign the petition now

#455

Post by axlee »

lolinder wrote: post #308
jlmorton wrote: post #160

Earlier quoted context omitted.

Sorry, I'm not sure if you're confused, but these are simple bank accounts. There was no high interest yield. The average interest yield was a fraction of a percent. No one was chasing any yield. No one was taking any risks. It's a bank account. Are you suggesting tens of thousands of small business customers need to do due dilligence on the investment practices of their banks? And what about all the other regional b…

They were definitely doing high interest yield: > ## Up to 4.50% annual percentage yield > Help make your money last longer with our Startup Money Market Account. Like with a savings account, you’ll earn up to 4.50% APY on deposits — so you gain a longer runway. Certain restrictions apply. https://www.svb.com/startup-banking

Bingo. Anyone who has dealt with SVB knows that. And that's just the public part.

Re: Urgent: Sign the petition now

#456

Post by Clubber »

nosefrog wrote: post #230

Unpopular opinion: the government should try to make depositors of banks whole when their banks fail.

They do, but there is a limit of $250K that the FDIC (taxpayers) guarantee. It's been $250K since 2008, but they should allow it to keep up with inflation, which would be approximately $355K now. The rest needs to come from the sale of the bank's assets, but that takes a while.

I believe the petition is asking that the government cover the difference by paying out now and assume the risk of the bank's assets not covering the difference.

Re: Urgent: Sign the petition now

#457

Post by Ekaros »

hijinks wrote: post #100
mska wrote: post #10

Is SVB the default bank for YC companies?

SVB is pushed on most companies raising money because the VCs can easily transfer money from their account to the company. So companies looking to raise are pushed to open a SVB account. If they keep the money there is up to them.

So is this about the VCs money?

Re: Urgent: Sign the petition now

#458

Post by shkkmo »

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…

The 250k isn't enough to hold them over for a week until the uninsured partial dividends get paid out?

I don't get how any of these companies are at risk of immediate failure. What I do see happening is these startups may lose some smallish percent of their account balance. These startups banked at a bank that actively lobbied for less regulation of risk and had over the FDIC insurance limit in their account so that seems entirely fair and reasonable.

To make matters worse, this petition is being put forward by a VC company that actively helped cause the crisis by encouraging a bank run.

However, instead of taking any of that responsibility, I see more fearmongering to get people on-board with socializing the losses.

Re: Urgent: Sign the petition now

#459

Post by lisasays »

el_nahual wrote: post #150
lisasays wrote: post #96

We have a simple ask: Regulators need to step in and implement a backstop for depositors. This is not a bank bailout. What kind of double-speak is this? How is "implement a backstop for depositors" anything other a "bank bailout?"

A bailout protects the equity and debt holders of a bank. This has nothing to do with that--it's about making sure the depositors of a bank get the cash they were holding there.

I'll go with the Wikipedia definition of the term, which seems quite straightforward:

A bailout is the provision of financial help to a corporation or country which otherwise would be on the brink of bankruptcy.

I'm not aware of a commonly accepted definition of the term that is restricted to protection for the company's investors.

Re: Urgent: Sign the petition now

#460

Post by IncRnd »

jarym wrote: post #32
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.

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?

Are you saying that the more successful you are means that everyone else should cover your losses due to your banking relationships?
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