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Is this an incoming tech crash?

adam_arthur 4y ago
More likely a credit event affecting low quality debt/companies. Usually these trigger broader recessions Will be hard to raise for startups without compelling profitability metrics, though
pjc50 4y ago
It's more slow dominoes from the crypto crash, I suspect. I'm not worrying about contaigion yet, these guys aren't exactly Lehman.
- throwaway20222 4y ago
  Anecdotally about SVB and crypto; I really wanted to put my funding round assets into Silicon Valley Bank for my last start up. However, when I was speaking to their bankers, I mentioned that there was a possible element of the platform that would be Web3 based. The SVB team immediately paused my application and insisted that they do a deep dive into all of my investors, my bank accounts, and my pitch decks. My pitch deck did not include materials about web3 since it was so tertiary to our core strategy, and this discrepancy between what I had told them and the paper materials was such that it raised enough of an alarm at SVB that the refused to take my deposit. They were really concerned about anything web3 so I wonder if they limited their exposure. Or maybe it was just us they didn’t like.
  - popcalc 4y ago
    I would have done the same.
  - capableweb 4y ago
    Probably they just perform more extensive due diligence because of the market, as cryptocurrencies are more risky. I know of plenty of cryptocurrency companies that use SVB.
  - auntienomen 4y ago
    Web3 is probably a red flag for aml/kyc.
- paulgb 4y ago
  I think it's more that the crypto crash and SVB liquidity issues are dominoes from the interest rate environment. SVB wasn’t particularly deep in crypto AFAIK, although if I’m remembering correctly I think I once met someone on a specifically crypto-focused team there. (It stands out in my memory because I consider it a minor red flag when dealing with banks.)
tekla 4y ago
Doubt it. FTX has shown crypto is completely irrelevant to the rest of the economy.
- antibasilisk 4y ago
  FTX collapsed in 2022, I don't think we should be so quick to dismiss contagion given we're still watching the fall out. The subprime mortgage crisis didn't happen overnight.
pvarangot 4y ago
If it's tech that was giving out USD loans and accepting crypto as collateral yes maybe.

More likely a credit event affecting low quality debt/companies. Usually these trigger broader recessions Will be hard to raise for startups without compelling profitability metrics, though

pjc50 4y ago

It's more slow dominoes from the crypto crash, I suspect. I'm not worrying about contaigion yet, these guys aren't exactly Lehman.

throwaway20222 4y ago
Anecdotally about SVB and crypto; I really wanted to put my funding round assets into Silicon Valley Bank for my last start up. However, when I was speaking to their bankers, I mentioned that there was a possible element of the platform that would be Web3 based. The SVB team immediately paused my application and insisted that they do a deep dive into all of my investors, my bank accounts, and my pitch decks. My pitch deck did not include materials about web3 since it was so tertiary to our core strategy, and this discrepancy between what I had told them and the paper materials was such that it raised enough of an alarm at SVB that the refused to take my deposit. They were really concerned about anything web3 so I wonder if they limited their exposure. Or maybe it was just us they didn’t like.
- popcalc 4y ago
  I would have done the same.
- capableweb 4y ago
  Probably they just perform more extensive due diligence because of the market, as cryptocurrencies are more risky. I know of plenty of cryptocurrency companies that use SVB.
- auntienomen 4y ago
  Web3 is probably a red flag for aml/kyc.
paulgb 4y ago
I think it's more that the crypto crash and SVB liquidity issues are dominoes from the interest rate environment. SVB wasn’t particularly deep in crypto AFAIK, although if I’m remembering correctly I think I once met someone on a specifically crypto-focused team there. (It stands out in my memory because I consider it a minor red flag when dealing with banks.)

tekla 4y ago

Doubt it. FTX has shown crypto is completely irrelevant to the rest of the economy.

antibasilisk 4y ago
FTX collapsed in 2022, I don't think we should be so quick to dismiss contagion given we're still watching the fall out. The subprime mortgage crisis didn't happen overnight.

pvarangot 4y ago

If it's tech that was giving out USD loans and accepting crypto as collateral yes maybe.