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Most startups fail. Propping these companies up now with government money (that is, our money) will just make the failures cost more, ultimately. What we're r
by jmull 4y ago
Most startups fail.
Propping these companies up now with government money (that is, our money) will just make the failures cost more, ultimately.
What we're really talking about here is bailing out investors who, of course, knowingly took these high risk flyers.
(BTW, the rising interest rates affects everything about this kind of investment. All kinds of things that made sense in the era of free money are going to stop working now. SVB is just one sad step in the process of this stuff grinding to a halt. It's not the the start of it, and it's certainly not going to be the end.)
- somsak2 4y agoI really doubt that when these startups put money into a bank account they were "knowingly taking a high risk."
- JohnFen 4y agoThey weren't knowingly taking a high risk, because the risk wasn't high. But they were knowingly taking a risk, and this time the dice rolled up unfavorably. That's the nature of risk. Even low risk things go bad, just not as often.
- jmull 4y agoWe're talking here about bailing out startups. The VC investors, founders, and even employees (to a somewhat lesser extent) made a high-risk decision to invest their time and/or money into something that would probably fail. (Also, it's not like a tax-payer funded bailout is the only way these startups can stay afloat... take a bridge load... find an opportunistic investor. Of course the startup investors would much prefer a taxpayer funded bailout because other options will cost them more money and/or a share of the startup. As many are pointing out: they are seeking to socialize the risks and keep the rewards.)