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OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse

businessinsider.com

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Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse

#21

Post by xiphias2 »

breck wrote: post #17
gfsdgsfgfds wrote: post #12

Just one anecdote of many. I'm a founder of a bootstrapped startup. We are/were with SVB. On Thursday I tried to get a Brex cash account setup to move some operational cash there but it didn't happen in time. I thought of wiring money out of SVB to my personal account but decided it felt too dodgy. Payroll for 2 weeks ending March 15th had to be funded through Gusto by tomorrow (March 13th). So I did all I could do w…

Your 2 week payroll is more than $250,000 and you are bootstrapped? I call B.S. Something doesn't add up. Coming from an anon account no less.

People don't have access to that $250k right now, it takes time.

Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse

#22

Post by youngtaff »

sql-spy wrote: post #2

Startups that are worth saving will be saved. Cashflow won't be what kills some of these startups.

Startups that can be sold will be saved…

From a pure financial point of view Uber would never be viewed as a startup that was worth saving… for it’s investors the whole point of the IPO was to cash out and leave someone else holding the loss making baby

Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse

#23

Post by nostrebored »

breck wrote: post #17
gfsdgsfgfds wrote: post #12

Just one anecdote of many. I'm a founder of a bootstrapped startup. We are/were with SVB. On Thursday I tried to get a Brex cash account setup to move some operational cash there but it didn't happen in time. I thought of wiring money out of SVB to my personal account but decided it felt too dodgy. Payroll for 2 weeks ending March 15th had to be funded through Gusto by tomorrow (March 13th). So I did all I could do w…

Your 2 week payroll is more than $250,000 and you are bootstrapped? I call B.S. Something doesn't add up. Coming from an anon account no less.

FDIC insured funds haven’t been disbursed yet right?

Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse

#24

Post by breck »

gfsdgsfgfds wrote: post #19
breck wrote: post #17

Earlier quoted context omitted.

Your 2 week payroll is more than $250,000 and you are bootstrapped? I call B.S. Something doesn't add up. Coming from an anon account no less.

It is not. SVB account is frozen. Nothing in or out. Wire had to land March 13th so had to be sent Friday.

A wire on the 13th lands on the 13th.

Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse

#25

Post by breck »

xiphias2 wrote: post #21
breck wrote: post #17

Earlier quoted context omitted.

Your 2 week payroll is more than $250,000 and you are bootstrapped? I call B.S. Something doesn't add up. Coming from an anon account no less.

People don't have access to that $250k right now, it takes time.

Everyone will have $250K tomorrow.

Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse

#26

Post by wpietri »

giraffe_lady wrote: post #11
wpietri wrote: post #5

Earlier quoted context omitted.

Depends on your perspective. One of the articles of faith in this industry is that good startups get investment and succeed, while bad ones fail. To whatever extent that's true, it won't be particularly worse here. Startups who made treasury management errors and are experiencing cash crunches can make very good cases for bridge loans and extra investment from their existing investors. If their investors are like, "n…

I'm normally very against the HN norm of just naming a fallacy and considering an entire argument dismissed but in this case I think it does apply. This is not a Just World, some unworkable companies will get bridge funding because of their connections and no other reason. Aside from that timing is always a thing. There's certainly a company out there that is 8 months away from proving the soundness of their idea tha…

Yeah, I'm not arguing that "whatever will arrive at the most perfectly correct conclusion". (And I don't think that sql-spy was arguing that either.) What I'm saying is that I don't think this particular circumstance is going to be any less just than usual.

Indeed, I think there's good reason to expect it to be more just given that what we're talking about is mostly a short-term cash crunch that's easily explained. E.g., one company is raising $1 bn for bridge loans: https://techcrunch.com/2023/03/11/brex-ceo-is-trying-to-rais...

That kind of support is not something marginal startups have access to in normal times.

Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse

#27

Post by resource0x »

vagabund wrote: post #7

Commendable of course but also feels like a no brainer. Depositors will almost certainly be made whole. Word will spread of the deed and the goodwill generated will more than repay the low-risk short term loan.

What is six-figure loan? Is it like $100,000? Is it really a heroic act worthy of posting on the front page?

Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse

#28

Post by sql-spy »

giraffe_lady wrote: post #11
wpietri wrote: post #5

Earlier quoted context omitted.

Depends on your perspective. One of the articles of faith in this industry is that good startups get investment and succeed, while bad ones fail. To whatever extent that's true, it won't be particularly worse here. Startups who made treasury management errors and are experiencing cash crunches can make very good cases for bridge loans and extra investment from their existing investors. If their investors are like, "n…

I'm normally very against the HN norm of just naming a fallacy and considering an entire argument dismissed but in this case I think it does apply. This is not a Just World, some unworkable companies will get bridge funding because of their connections and no other reason. Aside from that timing is always a thing. There's certainly a company out there that is 8 months away from proving the soundness of their idea tha…

Circumstances changed.

Running a startup means time is never on your side. If you are still 8 months away from proving "soundness" of your idea then you are already too late.

Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse

#29

Post by dboreham »

Waterluvian wrote: post #18
rdl wrote: post #16

Earlier quoted context omitted.

Not a lawyer, but I would be pretty comfortable with SVB -> personal account if you documented why and communicated about it in advance with board/counsel. (Obviously the next step would be opening a Chase/etc. account and sending the funds on to that, not using your personal account for company business on an ongoing basis, but a limited number of emergency transactions should be fine.)

Isn’t it generally a cardinal sin of business finance though?

Also nal and naa but no: it's "comingling" that's bad. If you explicitly document the transactions, don't do it all the time, and ideally use matching amounts in and out, it's not comingling.

Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse

#30

Post by wpietri »

swatcoder wrote: post #15
wpietri wrote: post #5

Earlier quoted context omitted.

Depends on your perspective. One of the articles of faith in this industry is that good startups get investment and succeed, while bad ones fail. To whatever extent that's true, it won't be particularly worse here. Startups who made treasury management errors and are experiencing cash crunches can make very good cases for bridge loans and extra investment from their existing investors. If their investors are like, "n…

> One of the articles of faith in this industry is that good startups get investment and succeed, while bad ones fail. Is it? I thought it was that startups with exciting books and good networks get a chance to ratchet into the next round of funding. Great startups drown all the time for not being a VC rocketship, when they they could have grow into a perfectly successful cruiseliner under traditional fundraising or…

I'm not saying it's true. I'm saying it's an article of faith.
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