3 ms·

YC's made $70 billion dollars from them. YC asking for assistance on their behalf is socializing the loses.

AlchemistCamp 4y ago
YC didn’t make SVB’s decisions or cause any of this and most SVB customers were not YC startups. Your suggestion is equivalent to saying that if I were to support hundreds of kickstarters for various board games and resell them for a profit to collectors over the years and then kickstarter imploded after taking on extreme financial risks, then I should bail out all the new customers of kickstarter who paid and didn’t get their games. It makes no sense. The people running kickstarter should take the hit, not some random other party working in their ecosystem. SVB owners should get wiped out, not the people or companies who opened bank accounts.
- WalterSear 4y ago
  The failure of the bank is certainly not YC's fault. But, much of the profits they made, and losses they are now incurring are both a consequence of the zero interest rate environment and it's current unwinding. If the goverment bails out YC's companies, when they are successful later, who is going to benefit the most from that?
  - AlchemistCamp 4y ago
    As I said, most SVB customers were not YC startups. There are thousands of businesses using SVB. If they only know they have 250k coming in the near future, and can’t be sure they’ll make payroll, what do you think happens to all of their employees? Or the other businesses relying on their products? Or anyone they owe? This is the second largest bank failure in US history, and for now it’s confined to a single bank and the cost to stop the fallout is relatively low. If decisive action is not taken by the end of this weekend, it’s going to get much, much worse.
- JohnFen 4y ago
  > then kickstarter imploded after taking on extreme financial risks, then I should bail out all the new customers of kickstarter who paid and didn’t get their games But what you're saying is the same thing: that taxpayers (random third parties who weren't even working in their ecosystem) should take the hit instead.
  - AlchemistCamp 4y ago
    Addressing systemic risks that individual actors aren’t well incentivized to handle is part of what governments and taxes are for. The $250k of FDIC insurance per bank customer exists because otherwise incentives drive bank runs even for banks with broad consumer bases. Spending taxes on preventing financial meltdowns from cascading actually makes the government and its citizens wealthier than not doing so.
    - JohnFen 4y ago
      But we're talking about businesses here. They are certainly well-incentivized to properly handle the money in these amounts. The risk of losing it (and potentially the business) sounds like excellent incentive.
      - AlchemistCamp 4y ago
        From my POV, they did "properly" handle their money by putting it in a large, trusted bank with a great reputation and focus on their type of business. What was your cash management strategy with your startup (assuming you have relevant experience)?

YC didn’t make SVB’s decisions or cause any of this and most SVB customers were not YC startups. Your suggestion is equivalent to saying that if I were to support hundreds of kickstarters for various board games and resell them for a profit to collectors over the years and then kickstarter imploded after taking on extreme financial risks, then I should bail out all the new customers of kickstarter who paid and didn’t get their games. It makes no sense. The people running kickstarter should take the hit, not some random other party working in their ecosystem. SVB owners should get wiped out, not the people or companies who opened bank accounts.

WalterSear 4y ago
The failure of the bank is certainly not YC's fault. But, much of the profits they made, and losses they are now incurring are both a consequence of the zero interest rate environment and it's current unwinding. If the goverment bails out YC's companies, when they are successful later, who is going to benefit the most from that?
- AlchemistCamp 4y ago
  As I said, most SVB customers were not YC startups. There are thousands of businesses using SVB. If they only know they have 250k coming in the near future, and can’t be sure they’ll make payroll, what do you think happens to all of their employees? Or the other businesses relying on their products? Or anyone they owe? This is the second largest bank failure in US history, and for now it’s confined to a single bank and the cost to stop the fallout is relatively low. If decisive action is not taken by the end of this weekend, it’s going to get much, much worse.
JohnFen 4y ago
> then kickstarter imploded after taking on extreme financial risks, then I should bail out all the new customers of kickstarter who paid and didn’t get their games But what you're saying is the same thing: that taxpayers (random third parties who weren't even working in their ecosystem) should take the hit instead.
- AlchemistCamp 4y ago
  Addressing systemic risks that individual actors aren’t well incentivized to handle is part of what governments and taxes are for. The $250k of FDIC insurance per bank customer exists because otherwise incentives drive bank runs even for banks with broad consumer bases. Spending taxes on preventing financial meltdowns from cascading actually makes the government and its citizens wealthier than not doing so.
  - JohnFen 4y ago
    But we're talking about businesses here. They are certainly well-incentivized to properly handle the money in these amounts. The risk of losing it (and potentially the business) sounds like excellent incentive.
    - AlchemistCamp 4y ago
      From my POV, they did "properly" handle their money by putting it in a large, trusted bank with a great reputation and focus on their type of business. What was your cash management strategy with your startup (assuming you have relevant experience)?