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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

#111

Post by ghaff »

rdl wrote: post #49
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…)

Most companies in the US do payroll on either a 2 week cycle (which sucks because some months you do 3 and some times you do 2), or 1st and 15th (or otherwise twice a month). March 15 is a very common payroll date. They're batch processes, done by dedicated payroll firms, since there are lots of tax/other obligations as well. Missing payroll by even one day causes 1) lots of drama with employees 2) starts some legal…

Some people like the "extra" checks of a 2 week cycle. Others prefer twice monthly cycles because it better aligns with expenses like mortgages and utilities.

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

#112

Post by wongarsu »

mhb wrote: post #10
rat9988 wrote: post #8

Earlier quoted context omitted.

Does someone have a name for this fallacy?

Tautology

"Startups that are worth saving will be saved" feels like the same category of statement as "It's always in the last place I look". They both describe common sense behavior (save things worth saving, or stop searching once you found what you're looking for). But they are not tautologies in the strict sense, you can make them false; and quite frequently they are false in practice, mostly due to imperfect information.

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

#113

Post by rdl »

ghaff wrote: post #111
rdl wrote: post #49

Earlier quoted context omitted.

Most companies in the US do payroll on either a 2 week cycle (which sucks because some months you do 3 and some times you do 2), or 1st and 15th (or otherwise twice a month). March 15 is a very common payroll date. They're batch processes, done by dedicated payroll firms, since there are lots of tax/other obligations as well. Missing payroll by even one day causes 1) lots of drama with employees 2) starts some legal…

Some people like the "extra" checks of a 2 week cycle. Others prefer twice monthly cycles because it better aligns with expenses like mortgages and utilities.

Lots of people like the extra checks, but very few companies like paying that way; it makes modeling so much harder. If you were doing weekly financials maybe but most companies do monthly.

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

#114

Post by ghaff »

rdl wrote: post #113
ghaff wrote: post #111

Earlier quoted context omitted.

Some people like the "extra" checks of a 2 week cycle. Others prefer twice monthly cycles because it better aligns with expenses like mortgages and utilities.

Lots of people like the extra checks, but very few companies like paying that way; it makes modeling so much harder. If you were doing weekly financials maybe but most companies do monthly.

I'm not sure. I've been with a company that's switched to a bi-weekly. But not sure of the reasoning. But probably something to do with payroll predictability.

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

#115

Post by saalweachter »

rdl wrote: post #68
davidkuennen wrote: post #51

Earlier 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…

Also, imagine the case where you do this and you're wrong. You panic but you're in the minority and there's no bank run and a week or two goes by and the bank is still fine.

Now you've got a weird thing to explain and no vindication.

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

#116

Post by rdl »

saalweachter wrote: post #115
rdl wrote: post #68

Earlier quoted context omitted.

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…

Also, imagine the case where you do this and you're wrong . You panic but you're in the minority and there's no bank run and a week or two goes by and the bank is still fine. Now you've got a weird thing to explain and no vindication.

Philosophical problem of "justified true belief"/Gettier problem. (https://en.wikipedia.org/wiki/Gettier_problem -- I learned about this from one of the Rap Genius founders when I was back in YC, lol.)

Generally the law handles this through the "reasonable man" standard; i.e. "would a reasonable man, knowing what you did at the time, have done what you did?" This would allow you to shoot someone in self-defense who was holding a realistic looking toy gun at a child (which you believed to be a real gun, unlawful intent, etc. at the time).

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

#117

Post by rdl »

dragonwriter wrote: post #86
nostrebored wrote: post #23

Earlier quoted context omitted.

FDIC insured funds haven’t been disbursed yet right?

> FDIC insured funds haven’t been disbursed yet right? The bank was closed on Friday, and at the time an announcement was made that the Deposit Insurance National Bank of Santa Clara would open with all insured deposits on Monday (this will not happen if between now and Monday a buyer is found and that bank instead takes over operations on Monday.) There’s not really a “disbursement” of insured funds, just a transfer…

As of about an hour ago, the government through some weird indirection is basically guaranteeing 100% of the par value of all the assets, so SVB or the DNIBoCA (I guess? honestly not sure which) should re-open Monday AM with 100% of assets available to depositors. i.e. bullet dodged.

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

#118

Post by piperswe »

rdl wrote: post #73
physicsguy wrote: post #59

Earlier quoted context omitted.

Quite interesting, here in the U.K. it’s generally monthly payroll, usually towards the end of the month, something like closest working day after the 25th is common

In Puerto Rico (where I live) there's an even weirder system -- people usually get/expect (and certain classes of employment obligate) a "13th month" check. Pretty common in LaLtAm; exists in some of Southern Europe too.

Western Europe as well, it's called a holiday allowance in the Netherlands

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

#120

Post by gus_massa »

rdl wrote: post #73
physicsguy wrote: post #59

Earlier quoted context omitted.

Quite interesting, here in the U.K. it’s generally monthly payroll, usually towards the end of the month, something like closest working day after the 25th is common

In Puerto Rico (where I live) there's an even weirder system -- people usually get/expect (and certain classes of employment obligate) a "13th month" check. Pretty common in LaLtAm; exists in some of Southern Europe too.

In Argentina we changed the mandatory "13th month" in December to a mandatory "half month" in July and another "half month" in December.
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