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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

#91

Post by rdl »

ttsgeysygd wrote: post #89
kkielhofner wrote: post #80

Earlier quoted context omitted.

Given the disaster and nearly unprecedented nature of these events I doubt anyone would bat an eye at a CEO taking the decisive action to do what needs to be done to survive (and fix it later). For many the past few days have been the startup equivalent of "fog of war". As others have noted it's not embezzlement/commingling and given the scenario "Wire out from SVB corp account to personal, document exact amount, and…

FWIW, on Thursday it wasn’t clear to me I had so little time to get money out and part of me felt like contributing to a bank run, before it was clear there was a bank run, was not being a good citizen. Still not sure how I feel about it all. SVB staff were great over the 10+ years we banked there. Tech was always crap but I liked the people. Very sad all around.

I totally agree re "contributing to a bank run" feeling shitty, but you have more obligation to your employees (especially), investors, and customers IMO than to your vendor (the bank). Congrats for being able to cover the payroll regardless, though.

(I am pretty confident there will be at least 250k + 50% advance-dividend early this week, and still optimistic but far from certain that a buyer will take the whole thing and it will be 100%. Last time people actually took losses of 50% above the FDIC amount (100k at the time) was 2008 (IndyMac).)

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

#92

Post by dragonwriter »

phphphphp wrote: post #67
icelancer wrote: post #47

Earlier quoted context omitted.

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.

Its $100 if it is both a first offense and not willful. For any willful or intentional delay, or a second or subsequent late paycheck regardless of willfulness, the penalty is $200 plus 25% of the payment that was due.

(And if any terminal paychecks are late, there are greater penalties – waiting time penalties equal to an average days pay for each day of delay up to 30 days – though I don’t recall if there is a wilfullness condition or modification to that.)

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

#94

Post by dragonwriter »

choppaface wrote: post #72
icelancer wrote: post #47

Earlier quoted context omitted.

Wage payment delays in the state of California are severely punishable under law: https://www.ottingerlaw.com/blog/wages-hours/employer-not-pa...

Except Musk has established precedent at Twitter that you can just fire employees for cause.

> Except Musk has established precedent at Twitter that you can just fire employees for cause.

“Established precedent” is…not a fair description of action which is being challenged in the courts, where no precedential legal decision has been made.

Also, firing employees would just make the California rule requiring immediate payment of final paychecks, with waiting penalties of 1 days pay for day of delay up to 30 days, applicable, as well as triggering other time-sensitive legal obligations that a company without access to cash might not want.

Plus, it means that once you get access to your cash again, you don’t have the employees (and might have a lot less positive image in the community you would want to hire from to replace them.)

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

#95

Post by grey-area »

baq wrote: post #83
grey-area wrote: post #58

Earlier quoted context omitted.

The fdic and fed probably will do exactly what Gary Tan and many others recommended - no bailout of the company or shareholders but organise a facility so that the depositors get 100%. They’re trying to sell it first but if that doesn’t work they don’t really have other options if they don’t want to be dealing with massive job losses and multiple bank runs next week.

Getting 90 cents on the dollar is not 'massive job losses' and most people outside of tech (SV VC tech precisely) think that the bank run risk is massively overblown. Anyway we'll see what FDIC does. They're good at what they do.

Isn’t this quite unusual (a bank run at a large US bank)?

I agree the fdic has done this before and if they can find a buyer or communicate well it should turn out fine next week.

There is a risk of contagion though and a risk of job losses if money is delayed for say 6-12 months. I don’t think it’s unreasonable to be worried about it if you’re impacted.

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

#96

Post by breck »

gfsdgsfgfds wrote: post #32
breck wrote: post #24

Earlier quoted context omitted.

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

My personal bank is Bank of America. I paid the $30 to do "1 business day" I read that as if I did it on Monday it would land Tuesday. Gusto was saying it had to be funded by Monday. Perhaps it would have worked out fine that funds would be unlocked on Monday and Gusto would have been fine with wire initiated on Monday, but this was Friday and everything seemed on fire. FWIW, Just looked at the screenshot of the wire…

Got it. So you are unfamiliar with the wire system. Most people are. I actually don't have anything good to say about it. (Sidenote: 24/7 crypto is far better, but crypto is still a bit of a wild west so I don't recommend for people who aren't comfortable being early adopters)

You are learning a lot and sounds like you figured out a way to not have your employees see any hiccup. Well done.

Thank you for replying and providing more info.

Nowadays one must assume ChatGPT bot/shill when talking to a new account.

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

#97

Post by dragonwriter »

loeg wrote: post #60
roboy wrote: post #41

Q 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…)

> Q from outside the US: why is capital needed for payroll mid month? The US largely does payroll biweekly (every two weeks). Sometimes weekly, although usually not in tech. It isn't like Germany or whatever where payroll is only once a month.

> The US largely does payroll biweekly (every two weeks).

Weekly, biweekly, monthly, and semimonthly are all common; In most states, there are rules setting minimum frequency (and sometimes regulating on what days as well as frequency), and they may vary by industry and job type. E.g., for California: https://www.dir.ca.gov/dlse/faq_paydays.htm

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

#98

Post by icelancer »

phphphphp wrote: post #67
icelancer wrote: post #47

Earlier quoted context omitted.

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.

That's for "not willful."

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

#99

Post by icelancer »

choppaface wrote: post #72
icelancer wrote: post #47

Earlier quoted context omitted.

Wage payment delays in the state of California are severely punishable under law: https://www.ottingerlaw.com/blog/wages-hours/employer-not-pa...

Except Musk has established precedent at Twitter that you can just fire employees for cause.

This is somewhat disputable, but regardless, it has nothing to do with delayed payments.

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

#100

Post by dragonwriter »

dboreham wrote: post #66
roboy wrote: post #41

Q 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 cou…

> there are laws that say an employer is committing a crime if wages are not paid on time.

Unless it is at least willful, its probably not a crime. It is, however, generally illegal and carries a civil cost even when not criminal.

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