14 ms·
LMAO. Can't even believe how many people were confidently asserting that nothing was wrong yesterday. If you had more than $250k in SVB yesterday you probably
by woeirua 4y ago
LMAO. Can't even believe how many people were confidently asserting that nothing was wrong yesterday. If you had more than $250k in SVB yesterday you probably just took a huge haircut.
Hundreds of startups will become illiquid as a result of SVB's collapse, and there will be major layoffs here in the next 90 days as founders realize that they lost their funds and cannot raise in the current VC environment.
- briandear 4y agoI bet a lot of VCs had significant money in that bank as well. Even if companies could raise money, there wouldn't be as money available.
- JumpCrisscross 4y ago> a lot of VCs had significant money in that bank Everyone I know pulled yesterday.
- eddsh1994 4y agoIn a fractional reserve people can't all win
- eddsh1994 4y agoDon't know why this is being downvoted - if a bank takes $100 and keeps $20 liquid while investing $80, and then everyone comes for their money, the first $20 is available but the rest will be slower if not completely lost. If everyone tried to take their money yesterday some people will win but a large number will lose... If there wasn't a run on the bank chances are it could have (slightly?) weathered the storm.
- pclmulqdq 4y agoEveryone who can read a balance sheet could figure out there was a lot of trouble after the announcement of the sold securities for a significant loss. The VCs telling portfolio companies to ride it out may have been looking for bagholders to ensure that they can get their own money out.
- dougmwne 4y agoThe trouble in a bank run is that it’s impossible for everyone to have gotten their money out yesterday. Those first in line caused the collapse, the rest are out of luck. Nice to hear you have lucky friends.
- gsibble 4y agoI know a lot of individuals and startups, most over the $250k limit, who did not get out in time. SVB disabled wires and transfers for many yesterday.
- gumby 4y agoVC firms don't generally have tons of cash sitting around compared to their fund size. When you raise a fund, an LP does't just hand you $20 mil, then simply promise to send you up to $20 mil when you ask for it.
- johnbellone 4y agoThe same people that were saying that yesterday were removing their deposits. They just wanted to be there first.
- hef19898 4y agoThere are three ways to succeed in this business: Be first, be smarter or cheat. And I don't cheat. Margin Call is such a timeless, great movie!
- johnbellone 4y agoIndeed!
- skywal_l 4y agoAnd even though I like to think myself as smart, it's a hell of a lot easier to be first!
- hef19898 4y agoDidn't he say sometjing like "while believe we have a hell lotta smart people under this roof, it is a lot easier to be first"? After all, it wasn't brains that got him in his chair, earning the big bucks, he can assure you!
- highwaylights 4y agoDo you care to know why I earn the big bucks? I’m here for one reason alone. To guess what the music might do a week, a month, a year from now. And standing here tonight I’m afraid that I. Don’t. Hear. A. Thing. Just… silence.
- FireBeyond 4y agoAnd to spin the quote further: "And there are a lot of smart people in Silicon Valley. It's a hell of a lot easier to be first."
- xapata 4y ago
- mangosteenjuice 4y agoA good lesson for everyone who forgot the last cycle. Slowly, then all at once.
- plonk 4y agoSVB isn't Lehman Brothers.
- themitigating 4y agoDo you think it's strange people are excited for the economy to fail?
- gretch 4y agoI think people are excited that we can get back to money tracking with actual value generation and not financial hacking. Events like these are similar to Enron and Theranos. No, I'm not excited to see "the energy industry" or "the medical industry fail", but that's not really what it was, was it?
- highwaylights 4y ago[flagged]
- vineyardmike 4y ago> If you had more than $250k in SVB yesterday you probably just took a huge haircut. You may not lose money. The money isn’t gone yet. The restructuring may save the money. There’s a playbook for this sort of thing.
- prasadjoglekar 4y agoYou most definitely will. SVB already fire-sold 21Bn in MBS and took a 1.8Bn loss on that. Someone is eating that loss.... Separately, this is going to cause a lot of finance vultures to look at other banks who also have MBS portfolios on their books. The show's only beginning.
- timr 4y agoNo, this isn't true. SVB has some unknown amount of cash and other assets on hand. We have no idea what that is right now, or what percentage this is of the shortfall. Someone will buy SVB, and they will put capital in as part of the purchase.
- hnthrowaway0315 4y agoI wonder if anyone has Bloomberg terminal access can take a look and check whether there are disruptions in MBS and its hedging tools.
- vitorsr 4y agoI have access to Refinitiv. I think it looks fine? https://workspace.refinitiv.com/web/cms/?pageId=mbshome https://workspace.refinitiv.com/web/cms/?pageId=mbshome
- hnthrowaway0315 4y agoThanks. Do not have an account but I get it.
- 4y ago
- matheusmoreira 4y agoIf people have to be reassured to begin with, it's already over. Money only exists because people keep believing it does. As soon as they stop believing it's gone.
- banku_brougham 4y agoThat gummint fiat money looking better all the time.
- Bud 4y ago[dead]
- omgomgomgomg 4y agoBut why would the startups become illiquid? Do they get the investments from the banks or do they park the investment money in this bank? And why this bank, when there are many more risk averse institutions out there?
- NordSteve 4y agoFor business banking, you want a bank that understands your business. SVB was in the first rank of banks that understood startups. Many startups aren't particularly sophisticated financially and just kept their capital in cash in the bank.
- hef19898 4y agoWhat did James Ray say again about FTX? Something along the lines of "a group of highly unsophiscated people"? Man, the CFOs of the affected start-ups should all look for a new job. By the way, preventing things like that is something a good MBA does.
- CyanLite2 4y agoThey become illiquid because they don't have access to their money that was in SVB. They can't make payroll, can't pay vendors and landlords. The employees will leave first. Vendors next.
- omgomgomgomg 4y agoBut normally, they will be bought by another bank coming Monday and resume business. The fdic assigns a buyer and pays the buyer, from what I understand. Edit. I just realized, in the us, if there is no bidder, the fdic can close down the bank or run it itself.
- deleted 4y ago[deleted]
- morpheuskafka 4y ago> Hundreds of startups will become illiquid as a result of SVB's collapse, I know SVB was like a "high tech bank" that partnered with things like Stripe Atlas, but is there any reason that startups were using it for their regular operating funds? Other than the name, was there something that actually made this bank particularly suitable for them?
- borski 4y agoThey 'understand' startups. That is, they were willing to work with founders of new ventures, didn't require insane proof of provenance of funds (because suddenly millions of dollars would appear overnight), and would support founders with mortgages, for example, that were running companies that weren't yet necessarily profitable but were well-funded nevertheless.
- LightFog 4y agoThey were proactive in incubators and allowed new companies to open accounts and make large deposits right away, when many mainstream banks wouldn’t or were too slow. I’m guessing plenty of startups stuck with them through inertia at least.
- cragfar 4y agoI can't say specifically for tech startups, but a lot of times lenders will require you to use their banking services as a funding requirement.
- 0x457 4y agoTry to walk to BofA as an entity that didn't exist yesterday and see how that goes.
- yieldcrv 4y agoIts not that bad. But it works better at a criminal bank. Particularly one that might open a bunch of extra accounts for you when you aren't looking. Obviously that means opening the first account won't be the problem either. Get a big criminal bank and they won't freeze your account for dumb reasons. Or smart reasons. So just follow the settlements with the federal government, its advertising.
- andrewcamel 4y agoYep... I bet this is about to pull forward a lot of startup death. Gun now to VC heads to save things. Forcing decisions they were hoping they wouldn't have to make for at least another 6-12 months.