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VCs and founders must believe SVB offers at least one, or why not go with a normal bank?

by morelisp 4y ago

gesticulator 4y ago
This has to do with a web of relationships and risk tolerance, not some product set…
- morelisp 4y ago
  Whatever you mean by "relationships" is in fact an "innovation" in the banking sense.
saurik 4y ago
And how did that work out for them? Are many of the people who were using SVB yesterday happy about their decision today? If they could go back in time and give up whatever that innovation was, and not be praying that they still have their money next week, are you saying most of them would be happy where they are? The problem here is that the system just isn't transparent enough: you put your money in a bank and I guess you just have to assume that they are really really smart or you lose your money... people make fun of crypto here constantly, but at least there everything is an open book. At the end of the day, the situation with SVB is actually worse than some scary DeFi protocol.
- nradov 4y ago
  The system is sufficient transparent. SVB was a publicly traded company. Customers who cared about risk could just read the reports. In the end any bank can fail. https://ir.svb.com/financials/sec-filings/default.aspx https://ir.svb.com/financials/sec-filings/default.aspx The depositors will get their money back, with perhaps a small delay. Which is more than you can say for scams like cryptocurrency.
  - monodeldiablo 4y ago
    Depositors will get their insured money back. Is there a commitment from the FDIC to make all depositors whole? If so, that's not typical.
    - morelisp 4y ago
      The FDIC insurance won’t make the rest whole, the bankruptcy process will. The assets are not fundamentally toxic and someone will buy them, with a haircut. Play stupid games, win 70 cents on your dollar.
nradov 4y ago
SVB was a normal bank. They specifically targeted tech industry startups through relationships with VCs and founders, but there was nothing special about the banking side.
deleted 4y ago
[deleted]

VCs and founders must believe SVB offers at least one, or why not go with a normal bank?

gesticulator 4y ago

This has to do with a web of relationships and risk tolerance, not some product set…

morelisp 4y ago
Whatever you mean by "relationships" is in fact an "innovation" in the banking sense.

saurik 4y ago

And how did that work out for them? Are many of the people who were using SVB yesterday happy about their decision today? If they could go back in time and give up whatever that innovation was, and not be praying that they still have their money next week, are you saying most of them would be happy where they are? The problem here is that the system just isn't transparent enough: you put your money in a bank and I guess you just have to assume that they are really really smart or you lose your money... people make fun of crypto here constantly, but at least there everything is an open book. At the end of the day, the situation with SVB is actually worse than some scary DeFi protocol.

nradov 4y ago
The system is sufficient transparent. SVB was a publicly traded company. Customers who cared about risk could just read the reports. In the end any bank can fail. https://ir.svb.com/financials/sec-filings/default.aspx https://ir.svb.com/financials/sec-filings/default.aspx The depositors will get their money back, with perhaps a small delay. Which is more than you can say for scams like cryptocurrency.
- monodeldiablo 4y ago
  Depositors will get their insured money back. Is there a commitment from the FDIC to make all depositors whole? If so, that's not typical.
  - morelisp 4y ago
    The FDIC insurance won’t make the rest whole, the bankruptcy process will. The assets are not fundamentally toxic and someone will buy them, with a haircut. Play stupid games, win 70 cents on your dollar.

nradov 4y ago

SVB was a normal bank. They specifically targeted tech industry startups through relationships with VCs and founders, but there was nothing special about the banking side.

deleted 4y ago

[deleted]