It seems weird to hear about this generosity from Altman’s family, as opposed to - from one of those companies who was helped.
Humble brag?
OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse
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Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse
#62Earlier quoted context omitted.
I don't really know much about venture capital but this sounds like a gross oversimplification. More like, the startups that are saved will be a mixed bag of worthwhile startups and dead-end startups. Meanwhile some worthwhile ones will sadly be left behind with the dead-end ones.
Ofcourse it is an oversimplification but it really is that simple. If the business is profitable, it will survive. If its still relying on free money to pay the bills, its time to make it profitable.
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Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse
#63Earlier quoted context omitted.
Isn’t it generally a cardinal sin of business finance though?
Interesting that its viewed so critically in the US. If documented its no problem and not uncommon at all in Germany. In fact many business owners pay something like credit card bills personally and reimburse through the company later.
Wouldn't this be other way around. First pay yourself and then spend that money on company bills? Which sounds very iffy to me as European.
Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse
#64One of those rare opportunities to clearly assess VCs from the outside, and surprisingly good steady reaction by him and Khosla. Who else?
Is there the opposite list? VCs like Ackman, Sacks, Calcanis, Cuban all firmly belong on it. Nothing from them but blame directed at others (biden, yellen, zelinsky, the fed, fdic, regulations – everyone but themselves), dangerous misinformation (including fake photos and videos of bank runs), and demands for an immediate government bailout. I wish someone would compile a video of how quickly these "rugged libertarians" have done a 180 on their views on regulation and "socialism" now that their own money is on the line.
Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse
#65Earlier quoted context omitted.
Isn’t it generally a cardinal sin of business finance though?
Interesting that its viewed so critically in the US. If documented its no problem and not uncommon at all in Germany. In fact many business owners pay something like credit card bills personally and reimburse through the company later.
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Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse
#66Q from outside the US: why is capital needed for payroll mid month? Are there some automatic insolvency processes if it is missed by a day? Why do the companies fall apart if there is just a few days of payment delay? (I mean it is obviously a shit situation, and having to tell the team payment might take a few days more than usual is bad, I am just surprised how 2 days of no-cash seem to wreak havoc…)
a) most employees are paid every 2 weeks and b) there are laws that say an employer is committing a crime if wages are not paid on time. So any properly run business takes great care to ensure that adequate cash is on hand to cover wage commitments (not just the money due to employees but also taxes due to state and federal governments). When thar cash goes up in SVB smoke, that's a big and immediate problem. You could in theory be sued or even go to jail.
Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse
#67Q from outside the US: why is capital needed for payroll mid month? Are there some automatic insolvency processes if it is missed by a day? Why do the companies fall apart if there is just a few days of payment delay? (I mean it is obviously a shit situation, and having to tell the team payment might take a few days more than usual is bad, I am just surprised how 2 days of no-cash seem to wreak havoc…)
Wage payment delays in the state of California are severely punishable under law: https://www.ottingerlaw.com/blog/wages-hours/employer-not-pa...
“If you receive a late paycheck, California Labor Code 210 requires employers to pay a penalty of $100 for an initial violation.”
Severely is overselling it.
Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse
#68Earlier quoted context omitted.
Isn’t it generally a cardinal sin of business finance though?
Interesting that its viewed so critically in the US. If documented its no problem and not uncommon at all in Germany. In fact many business owners pay something like credit card bills personally and reimburse through the company later.
That is far more common in the US (basically paying expenses on your personal cards, expensing to the company after the fact). You can also advance on some expenses sometimes (this can be abused so there are some accounting restrictions on how you'd do it, etc.).
What is weird/scary (especially when not documented clearly and in advance) is moving your entire bank balance into a personal account. Aside from government/tax/legal, you'd have your investors (in a venture/angel backed company) to justify it to. It's justifiable in this truly exceptional case of SVB imploding and no other bank account being available. (It gets harder to justify in a larger company with lots of investors and more money involved; moving a $100mm balance in a company where you were down to 10% ownership to a personal account even in this situation would be weird AF and depending on the banks involved might cause you problems. I probably still would have emailed counsel and investors/etc. on thursday morning to ask what to do; likely would have sent it to lawyers to handle actually in the huge-account situation.)
Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse
#69Earlier quoted context omitted.
Isn’t it generally a cardinal sin of business finance though?
It's an "antipattern" (and usually a strong sign that something is badly wrong) but it's not illegal... "sinful" is a useful hint that something is "norm" related.
Yeah, I didn’t say illegal. Often “cardinal sin” is just a playful way of saying “something thou shalt never do.”
Re: OpenAI CEO Sam Altman sent startup six-figure loan after SVB collapse
#70Earlier quoted context omitted.
Interesting that its viewed so critically in the US. If documented its no problem and not uncommon at all in Germany. In fact many business owners pay something like credit card bills personally and reimburse through the company later.
That is far more common in the US (basically paying expenses on your personal cards, expensing to the company after the fact). You can also advance on some expenses sometimes (this can be abused so there are some accounting restrictions on how you'd do it, etc.). What is weird/scary (especially when not documented clearly and in advance) is moving your entire bank balance into a personal account. Aside from governmen…
I see. That makes sense. Thank you for clarifying.