521–530 of 864 posts
Flagged!? Come on this is extremely topical, I cannot think of a more on-topic thing for HN. It brings together: - Silicon Valley - Startups - Y Combinator - Current Events Any one of those is an appropriate submission for Hacker News but altogether, it’s just … there is nothing more appropriate for HN. This belongs at the top of the front page where I encountered it.
YC has made a ton of money for itself already, why should the average taxpayer be responsible for helping them? Most people will agree it's unfortunate that depositors might lose some of the money they deposited. It's also unfortunate if you get robbed or your business catches on fire. That doesn't mean the government is obligated to reimburse you for your losses. Next time, consider paying for more insurance. Also,…
Note the complete lack of ANY contrition, accountability, etc in their communications on this.
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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…
> And it's a lot of money (e.g. 30% loss on $200bn is about $600 per US resident household). This calculation really put it in perspective. CEO of HN asks that every family in America send his friends $500.
Might seem like an ahole but can't you guys making 100k+ per year ride it out? We are talking about startup a here, have we forgotten the risks and implications that come with this model?
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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 h…
I'm saying that, had this situation not happened, defaulting to "what bank do other companies like us use?" would have been a perfectly reasonable strategy.
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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…
https://www.levernews.com/svb-chief-pressed-lawmakers-to-wea...
Might help if you are paywall-blocked.
It's too bad there was nobody who was supposed to be mentoring these startups, maybe giving them advice about business concepts like the benefits of diversification.
Yeah what if we create a network of competent, business savvy investors who are familiar with technology startups? That would be a great way to prevent this type of thing from happening, because they would know about proper risk management.
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YC's made $70 billion dollars from them. YC asking for assistance on their behalf is socializing the loses.
YC didn’t make SVB’s decisions or cause any of this and most SVB customers were not YC startups. Your suggestion is equivalent to saying that if I were to support hundreds of kickstarters for various board games and resell them for a profit to collectors over the years and then kickstarter imploded after taking on extreme financial risks, then I should bail out all the new customers of kickstarter who paid and didn’t…
But, much of the profits they made, and losses they are now incurring are both a consequence of the zero interest rate environment and it's current unwinding.
If the goverment bails out YC's companies, when they are successful later, who is going to benefit the most from that?
What would I gain as a taxpayer in return for this bailout? Would the taxpayer receive 10% equity in YC? It seems like YC could have insured these funds, but didn’t. They saved money and accepted the risk. This risk is now realized. Seems bizarre that YC would be made whole. Certainly it saves jobs, but it benefits YC more than anyone else.
These are deposits at a bank. We're advocating for protection of 37,000 small business accounts, a small number of which are YC. We discovered about 30% of YC companies would not be able to make payroll even after the $250,000 insured amount if they were to wait months for their payments. That is detailed on the FDIC website currently as the process for remediation. This petition represents the lived experience of th…
It seems to me that there's a lot of investors who could individually pitch in a few million without really missing it, but whose collective action would go a long way to mitigating the knock-on effects of a bank failure on small firms that are not themselves int he investment/financial engineering/risk management space, and can't be blamed (much) for trusting that a conservative-seeming brick-and-mortar bank would safeguard their cash deposits.
I think it's laudable that you're going to bat on behalf of YC companies, but you've got to be conscious of how it reads to the casual onlooker. 'Chastened investors rally round to help startups make payroll' is a much better headline than 'VCs beg Uncle Sam for cash lifeline'.
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.
I’m torn. When I put my money in the bank, I don’t consider that an “investment” and neither did the employees. I’m the last person to feel sorry for BigTech employees (I am one) making $300K+ a year (I don’t. I’m not complaining) who got laid off and didn’t save during the good times (I have used almost every penny of my after tax signing bonus/RSUs toward “increasing my net worth”). But most of the people working a…