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I don’t think it’s so much “high risk” as it is “non-traditional.” In a normal new business, you have a factory, and all the machinery is assets, and if it goes
by Eric_WVGG 4y ago
I don’t think it’s so much “high risk” as it is “non-traditional.” In a normal new business, you have a factory, and all the machinery is assets, and if it goes under you can sell the physical trucks and widget presses.
That’s just not how America has worked for a long time now, and I don’t think most folks would describe American businesses as any riskier than in say Serbia.
This isn’t a “bad guy” story, as far as I can tell.
- varispeed 4y ago> I don’t think it’s so much “high risk” as it is “non-traditional.” Funny how tables have turned recently. Now it's other way around more often. If your start up is actually manufacturing something, a physical item, the banks deem the business as non traditional... Go figure...
- JohnFen 4y ago> This isn’t a “bad guy” story, as far as I can tell. I agree. There are no bad guys here. There's just a bank that took and chance and it bit them.
- brookst 4y agoIf there are bad guys it’s the VCs who coordinated the bank run. Even still, each of them was acting rationally and not maliciously, but they’re all savvy enough to know that racing for the exits is going to kill the bank.
- ashwagary 4y agoIf SVB's activity can be described as "yield chasing", there is no way clients, whatever their actions were, deserve more blame than the management.
- brookst 4y agoEh, if “clients” and “management” were totally distinct, I’d agree. My understanding, and I’d welcome correction from those more knowledgeable, is that the SVB was hardly independent from the VC powerhouses.