261–270 of 864 posts
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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 difference to your business.
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.
These are depositors of a bank. Most startups only have one bank. Startups should live or die because they create good products and solve real problems in real markets, not because they made an arbitrary choice like which bank they started using. There's also a real risk of bank contagion if it is only safe to deposit in the largest banks.
What happens if the startup you're referring to is a bank itself?
tfw venture capitalists want socialism
Sorry, a small business is a machine shop or hair studio. They don’t bank with SVB.
These are startups that get millions in funding for often very dubious purposes. There are a few gems among them - but let them stand on their own.
Or course, the real culprit is years of low rates and QE that has justified all of this. Time to stop.
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My general understanding is that with many banks, if you walked in and said "Ya a bunch of people gave us $10M, and we're basically going to be cash flow negative for the next decade, will run out of money unless people invest again, and we're 90% likely to be out of business in 5 years", they'd likely not want to work with you. They especially wouldn't be offering you additional lines of credit.
SVB on the other hand seemed to be understanding that the business model of SV start-ups was different than more traditional companies, and was a lot more willing to work with them and accept a level of risk.
It sure seems now that the risk associated there didn't necessarily work out (perhaps the biggest understatement I've made in a long time), but that's the reason that so many businesses in the tech start-up/bay-area used them.
As to why they used it solely, I can't answer,m but I've heard that raising debt from SVB required you to keep the majority of your account holdings with SVB (which really doesn't seem that unreasonable)
Earlier quoted context omitted.
110% agree. At some point, risk HAS to be treated as what it is, risk, rather than just "another way to do things". We have so many banks treating risk as what it is, and pricing for it, well these people decided to go to another bank to get funding, well deal with it. It's not like the average citizen has this luxury.
The equity holders and management of SVB are likely to be wiped. In the petition we specifically call this out: we are not asking for their risks to be "socialized." Depositors have a reasonable expectation that when they choose a bank (especially a publicly traded bank that is regulated) that their deposits are safe. If this is not true, then most people will only bank with the largest banks. That's not a good situa…
[1] https://news.ycombinator.com/item?id=27468549 [2] https://news.ycombinator.com/item?id=27654940
Are they like the mandatory checking accounts for the day-to-day management ? That should indeed be bailed out immediately, to unfreeze their processes.
Or is that investment? I don't care if investors loose money for once.
And how can a bank 'loose' money from checking accounts, without anyone profiteering or getting the money for friends ? Banks shouldn't be supposed to invest with checking accounts. They should just hold the book, and charge you a yearly fee if they need.
I saw a claim go by on Twitter that (some?) VCs required their companies to bank with SVB. Frankly, the thread it’s in feels a little histrionic, and I hesitate to believe it. But surely someone here on HN can confirm/deny? Source: https://twitter.com/bhargreaves/status/1634245405205471245
"11 of 15 YC startups with IPOs bank with SVB. And 7 of those began with SVB Startup Banking."
"Silicon Valley Bank: The choice of YC game changers"
(The SVB web site is still up, for now. But logins are disabled.)