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Ask HN: How is the SVB situation affecting your startup?

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Re: Ask HN: How is the SVB situation affecting your startup?

#31

Post by orangepurple »

lordnacho wrote: post #26
lolinder wrote: post #16

Earlier quoted context omitted.

> Most of their assets are in the form of treasuries, bonds, etc. I believe you know what you're talking about, but if that's the case why are they struggling to raise capital to pay depositors? (I'm asking as an ignorant outsider to banking in general and SVB in particular.)

What doesn't seem to be so explicitly stated is that due to rates going up, the bonds are worth less than they were when rates were high. So they wouldn't have enough money if they turned the bonds into money. Guy lends you 100 at 3%, you buy 100 of bonds than pay you 5%. Guy asks for his money back, your bonds are worth only 80, big problem.

One of the biggest banks in the world failed to account for a capital management risk scenario where interest rates go up? Insane

Re: Ask HN: How is the SVB situation affecting your startup?

#32

Post by more_corn »

danpalmer wrote: post #3

Stripe Atlas has supported SVB accounts for a while. I believe it may have been the only bank account supported at the beginning, but regardless, I suspect there are a lot of Atlas companies backed by SVB accounts.

Oh man, nobody should ever use Stripe Atlas.

Re: Ask HN: How is the SVB situation affecting your startup?

#33

Post by phpnode »

Aperocky wrote: post #28
gizmo wrote: post #14

Earlier quoted context omitted.

It was a major red flag! You're right about their liabilities, but their assets are mostly longish duration bonds. When interest rates go up their main customer base (startups) will have a harder time raising money (bad for them) and the value of their bonds will go down (because new bonds offer more interest). And now they're forced to sell these bonds at a loss to cover the money outflow (customers leaving). They'r…

So a slow version of Terra Luna. Resilient system design doesn't just apply to engineers.

it's a totally different situation to Terra/Luna

Re: Ask HN: How is the SVB situation affecting your startup?

#35

Post by bhouston »

I think that the bank gets rescued, probably very soon, the next few days.

To let it fail will harm a significant portion of the US startup community and damage the country's ability to continue to innovate. In many ways, it is too big to fail because of its ties to the startup community.

I think there is no other solution right now be a federal rescue of SVB. It is likely insolvent right now if they had to sell their assets at firesafes prices. An orderly unwind would help all involved and preserve a lot of value.

Re: Ask HN: How is the SVB situation affecting your startup?

#36

Post by PaulHoule »

bagacrap wrote: post #30
eqmvii wrote: post #20

Earlier quoted context omitted.

CNBC this morning has had a few chirons implying private capitalization/sales talks have failed edit: maybe just the raise, and sales talks continue? https://www.cnbc.com/2023/03/10/silicon-valley-bank-financia...

CNBC is not a reliable source for anything except fear mongering

They aren't the only ones reporting on this.

Re: Ask HN: How is the SVB situation affecting your startup?

#37

Post by idopmstuff »

NickC25 wrote: post #34

I own put options that I bought yesterday at market open. It's not affecting my startup, but it's affecting my portfolio and I'm not happy that I can't sell those options.

Why can't you sell them?

Edit: I'm realizing now that you probably meant you have put options on other companies through an SVB account that you can't access because of account issues, not that you have puts on SVB, which was my initial read.

Re: Ask HN: How is the SVB situation affecting your startup?

#38

Post by samwillis »

more_corn wrote: post #32
danpalmer wrote: post #3

Stripe Atlas has supported SVB accounts for a while. I believe it may have been the only bank account supported at the beginning, but regardless, I suspect there are a lot of Atlas companies backed by SVB accounts.

Oh man, nobody should ever use Stripe Atlas.

I'm interested to hear why?

Re: Ask HN: How is the SVB situation affecting your startup?

#39

Post by readyoursicp »

idopmstuff wrote: post #37
NickC25 wrote: post #34

I own put options that I bought yesterday at market open. It's not affecting my startup, but it's affecting my portfolio and I'm not happy that I can't sell those options.

Why can't you sell them? Edit: I'm realizing now that you probably meant you have put options on other companies through an SVB account that you can't access because of account issues, not that you have puts on SVB, which was my initial read.

I read them as puts on SVB, but he can't sell them because they halted trading on SVB.

Re: Ask HN: How is the SVB situation affecting your startup?

#40

Post by NickC25 »

idopmstuff wrote: post #37
NickC25 wrote: post #34

I own put options that I bought yesterday at market open. It's not affecting my startup, but it's affecting my portfolio and I'm not happy that I can't sell those options.

Why can't you sell them? Edit: I'm realizing now that you probably meant you have put options on other companies through an SVB account that you can't access because of account issues, not that you have puts on SVB, which was my initial read.

No, I own put options on SIVB itself.

Trading was halted in premarket and has yet to reopen. Honestly, it's disgusting. The amount of profit I would have made would be more than life-changing at a time when I could really use the money.

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