5 ms·

YC: We ask for depositors to be made whole

19 points by mgl 4y ago

not_your_vase 4y ago
According to Bloomberg, YC was amongst the ones encouraging the bank run. https://www.bloomberg.com/news/articles/2023-03-09/svb-ceo-becker-asks-silicon-valley-bank-clients-to-stay-calm?srnd=wealth https://www.bloomberg.com/news/articles/2023-03-09/svb-ceo-b...
- Ekaros 4y ago
  I say claw back that money and distribute it to debtors equally. Fair game? Socialize the losses among all who held money above the 250k.
johnbellone 4y ago
Not without taxpayers receiving equity. And not without restrictions. I’d like to know if the startups were forced to bank as a requirement of accepting funding. That dumb shit needs to be fixed.
- whodidntante 4y ago
  I know from personal experience that you were "coached" to do so. You could choose another bank, it is "your company", however it was clear that it was frowned upon and could quickly put you outside the circle of trust. Also, for the most part, when you get your real funding, a CFO is "brought in", as most founders teams do not include a CFO from the start. Similar for various services, technical and otherwise, if there was a portfolio company that offered these services. This is from almost two decades ago, things may be different now.
greenthrow 4y ago
Where was YC when thousands of tech workers have been laid off in recent months? Where will YC be when Meta lays off the 10,000+ more they are rumored to be preparing? It is extremely disingenuous to pretend they care about how the individual is affected. They only care right now because their investments are on the line. Also YC seems like it should be able to muster the resources to help its companies whether this storm. Where is the rugged, exceptional individualism championed by PG and others when something bad happens?
- deleted 4y ago
  [deleted]
- ignoramous 4y ago
  YC probably is encouraged by the recent BigTech layoffs as it frees managers and engs from the Vortex, and that they may now start companies. > They only care right now because their investments are on the line. Of course YC cares more about its startups and founders than others. How is this controversial? > Also YC seems like it should be able to muster the resources to help its companies whether this storm. We don't know that, but isn't the tweet you're critiquing is also YC clouting up to help its companies?
davidgerard 4y ago
Garry also posted this to HN and forced it to the front page, and readers roundly told him to get knotted and flagged the post: https://news.ycombinator.com/item?id=35114009 https://news.ycombinator.com/item?id=35114009 Garry is calling for a regulation. Many respondents cited the precise regulation that would have stopped this happening, which the CEO of SVB had lobbied to remove in 2018: https://www.theguardian.com/business/2023/mar/11/silicon-valley-bank-weaken-risk-regulations-svb https://www.theguardian.com/business/2023/mar/11/silicon-val... Garry hasn't addressed those responses as yet that I've seen.
- neilv 4y ago
  > and readers roundly told him to get knotted and flagged the post: Was it flagged by people critical of it, or by people who wanted to suppress the critical comments/backlash?
  - deleted 4y ago
    [deleted]
  - nickthegreek 4y ago
    Both.
bruce343434 4y ago
Privatize the gains, socialize the losses. Before the government supplies anything, the wallets of those at the top of SVB should be first to be liquidated. Otherwise, it's equivalent to just randomly awarding those top guys with millions of taxpayer money. Easy scheme, honestly. Set up a bank, get some deposits, gamble it away, walk away with gains you periodically skimmed off the top. Let the government deal with the fallout.
- cinbun8 4y ago
  That's not what happened though. SVB did not gamble with the money.
  - bruce343434 4y ago
    They did put money on a "sure bet", bonds and mortgage backed securities. Due to the fuckery with interest rates, those sure bets were suddenly unfavorable (at least if you have to cash them in early, which they did). The fact that stocks were sold tells me they knew about this going belly up eventually.
    - brodouevencode 4y ago
      What I would like to see come out of this is the banking system offer risk tiered accounts. No-risk tiers are FDIC insured, but the bank is not allowed to move that money anywhere. Higher tiers offer higher levels of risk, deposits are not guaranteed but receive better internet rates, and the banks are able to “gamble” in whatever way they choose. The current structure is fundamentally broken and no amount of regulation layered on top of that structure will provide the stability and security for customers while driving market innovation.
      - midoridensha 4y ago
        We already have this: it's called a "brokerage account", or various other names: "mutual fund", "ETA", "company stock", etc. If you want higher interest (gains) and risk, you buy stock, or a fund. Finally, if the bank can't move money anywhere, there's no reason for the bank to exist, and there's no way for it to pay interest (in fact, they'd have to charge you to keep your money). The whole way a bank works is by investing your money somewhere, then giving you a fraction of the proceeds (as interest). You seem to not understand at a fundamental level how a bank works.
CPLX 4y ago
I ask for all the taxi drivers who were completely fucked by Uber and Lyft to be made whole: https://www.nytimes.com/2018/12/02/nyregion/taxi-drivers-suicide-nyc.html https://www.nytimes.com/2018/12/02/nyregion/taxi-drivers-sui... I ask for VC funded delivery services to stop stealing tips from gig workers: https://www.nbcnews.com/business/business-news/why-instacart-doordash-workers-don-t-always-receive-tips-you-n965926 https://www.nbcnews.com/business/business-news/why-instacart... I’d also like to see social media held accountable for the harms done to children and communities and for our existing laws against anti-competitive behavior and collusion to be enforced against search and software platforms. The chutzpah of the Silicon Valley influencer crowd over this weekend has become seriously fucking unbearable. My feeds are full of sociopathic libertarians calling for government to make sure they never suffer any consequences for their failure to adequately manage risk? I mean GTFO. I’m all for regulation and I in fact do think the government should be heavily involved in preventing this kind of thing and helping if it ends up happening. But if we’re going to regulate let’s fucking regulate. Any answer to this tweet should start with a quick review of this guy and his friends campaign contributions and lobbying involvement. There’s nothing special about you. Your lives aren’t more important than the lives of the children of employees at the Carrier plant in Indianapolis, or the workers at the Amazon faculty on Staten Island. If your values system only applies to you and your friends it’s not much of a values system.
- MrMan 4y ago
  Yeah they can all burn
- haiti_outlaw 4y ago
  [flagged]
- resters 4y ago
  > sociopathic libertarians calling for government to make sure they never suffer any consequences for their failure to adequately manage risk FYI libertarians typically do not want the government / taxpayers to bail out companies for bad decisions.
  - 4y ago
GiorgioG 4y ago
A VC asking gov't for more corporate welfare. The gov't owes these companies nothing. VCs & Big Tech is free to pool some of their cash reserves to make these depositors whole beyond the standard FDIC insured amount of $250K.
gjs278 4y ago
[dead]
johnbellone 4y ago
Now the post is flagged?
- not_your_vase 4y ago
  Well, this is a YC website after all, and this post doesn't seem to go according to plan.
- johnbellone 4y ago
  It sounds about time for a community shakeup.
- deleted 4y ago
  [deleted]
- CPLX 4y ago
  This post should not be flagged it’s an important and current topic with thoughtful and substantive disagreements to learn about.
MrMan 4y ago
Ridiculous Shameful
resters 4y ago
Garry, are you going to allocate some shares of each of the companies to some public purpose in exchange for the gift you are requesting?
- johnbellone 4y ago
  Large percentage of shares.
bradleyjg 4y ago
With YC’s deep and broad connections in the VC, tech company, and ultra high net worth communities why doesn’t it organize a private bailout instead of asking for a handout?
- Cthulhu_ 4y ago
  Because all the money is in the same bank; can't do a private bailout if you can't access your money. (I'm half joking, I'm sure there's a lot of money there not at those banks. Also, the big companies have so much money, they can buy this bank and get a chunk of all the startups easily enough).
  - johnbellone 4y ago
    The music stopped. Hopefully some of the people that got out of their chairs went to a real bank.
whodidntante 4y ago
Seems a lot of stupid rich people (as in stupid and rich) who made their money on unfettered capitalism now want the taxpayers to pay for their mistake. Who puts millions of dollars in bank deposits ? Especially an undiversified bank where the limit of security is $250K. You put your money in short term treasuries and transfer what you need to pay bills. Lazy or ignorant does not mix well with large amounts of money. Back in the day when I had a VC startup (top tier valley VC), SVB was the place you were "coached" to use, as well as which companies to buy your "services" from (needed or not). Incest never works out too well. If the billionaires want a bailout, they can simply buy the bank and run it. Of course, they were the ones who added the kindling by encouraging people to take their money out, but now that they missed that opportunity, they are now asking for the public to bail them out.
resters 4y ago
Why is this flagged? Garry represents YC and his ridiculousness should not be suppressed from HN.
- greenyoda 4y ago
  It could have been flagged because there was a very big discussion of it earlier: https://news.ycombinator.com/item?id=35114009 https://news.ycombinator.com/item?id=35114009 (369 points, 743 comments)
  - cassianoleal 4y ago
    If that's the case, why is that one flagged then?
    - nickthegreek 4y ago
      Some people flag because they think that asking for a bailout is ridiculous. Other people flag because they want to hide the shame.
deleted 4y ago
[deleted]
joseftexas 4y ago
Not going to happen. Supreme court has ruled depositors as investors. The pecking order after 250K is just slightly better than unsecured loan and shareholders. Who would have though Lehmans 2.0 replay itself again.

19 points by mgl 4y ago

According to Bloomberg, YC was amongst the ones encouraging the bank run. https://www.bloomberg.com/news/articles/2023-03-09/svb-ceo-becker-asks-silicon-valley-bank-clients-to-stay-calm?srnd=wealth https://www.bloomberg.com/news/articles/2023-03-09/svb-ceo-b...

Ekaros 4y ago
I say claw back that money and distribute it to debtors equally. Fair game? Socialize the losses among all who held money above the 250k.

johnbellone 4y ago

Not without taxpayers receiving equity. And not without restrictions. I’d like to know if the startups were forced to bank as a requirement of accepting funding. That dumb shit needs to be fixed.

whodidntante 4y ago
I know from personal experience that you were "coached" to do so. You could choose another bank, it is "your company", however it was clear that it was frowned upon and could quickly put you outside the circle of trust. Also, for the most part, when you get your real funding, a CFO is "brought in", as most founders teams do not include a CFO from the start. Similar for various services, technical and otherwise, if there was a portfolio company that offered these services. This is from almost two decades ago, things may be different now.

greenthrow 4y ago

Where was YC when thousands of tech workers have been laid off in recent months? Where will YC be when Meta lays off the 10,000+ more they are rumored to be preparing? It is extremely disingenuous to pretend they care about how the individual is affected. They only care right now because their investments are on the line. Also YC seems like it should be able to muster the resources to help its companies whether this storm. Where is the rugged, exceptional individualism championed by PG and others when something bad happens?

deleted 4y ago
[deleted]
ignoramous 4y ago
YC probably is encouraged by the recent BigTech layoffs as it frees managers and engs from the Vortex, and that they may now start companies. > They only care right now because their investments are on the line. Of course YC cares more about its startups and founders than others. How is this controversial? > Also YC seems like it should be able to muster the resources to help its companies whether this storm. We don't know that, but isn't the tweet you're critiquing is also YC clouting up to help its companies?

davidgerard 4y ago

Garry also posted this to HN and forced it to the front page, and readers roundly told him to get knotted and flagged the post: https://news.ycombinator.com/item?id=35114009 https://news.ycombinator.com/item?id=35114009 Garry is calling for a regulation. Many respondents cited the precise regulation that would have stopped this happening, which the CEO of SVB had lobbied to remove in 2018: https://www.theguardian.com/business/2023/mar/11/silicon-valley-bank-weaken-risk-regulations-svb https://www.theguardian.com/business/2023/mar/11/silicon-val... Garry hasn't addressed those responses as yet that I've seen.

neilv 4y ago
> and readers roundly told him to get knotted and flagged the post: Was it flagged by people critical of it, or by people who wanted to suppress the critical comments/backlash?
- deleted 4y ago
  [deleted]
- nickthegreek 4y ago
  Both.

bruce343434 4y ago

Privatize the gains, socialize the losses. Before the government supplies anything, the wallets of those at the top of SVB should be first to be liquidated. Otherwise, it's equivalent to just randomly awarding those top guys with millions of taxpayer money. Easy scheme, honestly. Set up a bank, get some deposits, gamble it away, walk away with gains you periodically skimmed off the top. Let the government deal with the fallout.

cinbun8 4y ago
That's not what happened though. SVB did not gamble with the money.
- bruce343434 4y ago
  They did put money on a "sure bet", bonds and mortgage backed securities. Due to the fuckery with interest rates, those sure bets were suddenly unfavorable (at least if you have to cash them in early, which they did). The fact that stocks were sold tells me they knew about this going belly up eventually.
  - brodouevencode 4y ago
    What I would like to see come out of this is the banking system offer risk tiered accounts. No-risk tiers are FDIC insured, but the bank is not allowed to move that money anywhere. Higher tiers offer higher levels of risk, deposits are not guaranteed but receive better internet rates, and the banks are able to “gamble” in whatever way they choose. The current structure is fundamentally broken and no amount of regulation layered on top of that structure will provide the stability and security for customers while driving market innovation.
    - midoridensha 4y ago
      We already have this: it's called a "brokerage account", or various other names: "mutual fund", "ETA", "company stock", etc. If you want higher interest (gains) and risk, you buy stock, or a fund. Finally, if the bank can't move money anywhere, there's no reason for the bank to exist, and there's no way for it to pay interest (in fact, they'd have to charge you to keep your money). The whole way a bank works is by investing your money somewhere, then giving you a fraction of the proceeds (as interest). You seem to not understand at a fundamental level how a bank works.

CPLX 4y ago

I ask for all the taxi drivers who were completely fucked by Uber and Lyft to be made whole: https://www.nytimes.com/2018/12/02/nyregion/taxi-drivers-suicide-nyc.html https://www.nytimes.com/2018/12/02/nyregion/taxi-drivers-sui... I ask for VC funded delivery services to stop stealing tips from gig workers: https://www.nbcnews.com/business/business-news/why-instacart-doordash-workers-don-t-always-receive-tips-you-n965926 https://www.nbcnews.com/business/business-news/why-instacart... I’d also like to see social media held accountable for the harms done to children and communities and for our existing laws against anti-competitive behavior and collusion to be enforced against search and software platforms. The chutzpah of the Silicon Valley influencer crowd over this weekend has become seriously fucking unbearable. My feeds are full of sociopathic libertarians calling for government to make sure they never suffer any consequences for their failure to adequately manage risk? I mean GTFO. I’m all for regulation and I in fact do think the government should be heavily involved in preventing this kind of thing and helping if it ends up happening. But if we’re going to regulate let’s fucking regulate. Any answer to this tweet should start with a quick review of this guy and his friends campaign contributions and lobbying involvement. There’s nothing special about you. Your lives aren’t more important than the lives of the children of employees at the Carrier plant in Indianapolis, or the workers at the Amazon faculty on Staten Island. If your values system only applies to you and your friends it’s not much of a values system.

MrMan 4y ago
Yeah they can all burn
haiti_outlaw 4y ago
[flagged]
resters 4y ago
> sociopathic libertarians calling for government to make sure they never suffer any consequences for their failure to adequately manage risk FYI libertarians typically do not want the government / taxpayers to bail out companies for bad decisions.
- 4y ago

GiorgioG 4y ago

A VC asking gov't for more corporate welfare. The gov't owes these companies nothing. VCs & Big Tech is free to pool some of their cash reserves to make these depositors whole beyond the standard FDIC insured amount of $250K.

gjs278 4y ago

[dead]

johnbellone 4y ago

Now the post is flagged?

not_your_vase 4y ago
Well, this is a YC website after all, and this post doesn't seem to go according to plan.
johnbellone 4y ago
It sounds about time for a community shakeup.
deleted 4y ago
[deleted]
CPLX 4y ago
This post should not be flagged it’s an important and current topic with thoughtful and substantive disagreements to learn about.

MrMan 4y ago

Ridiculous Shameful

resters 4y ago

Garry, are you going to allocate some shares of each of the companies to some public purpose in exchange for the gift you are requesting?

johnbellone 4y ago
Large percentage of shares.

bradleyjg 4y ago

With YC’s deep and broad connections in the VC, tech company, and ultra high net worth communities why doesn’t it organize a private bailout instead of asking for a handout?

Cthulhu_ 4y ago
Because all the money is in the same bank; can't do a private bailout if you can't access your money. (I'm half joking, I'm sure there's a lot of money there not at those banks. Also, the big companies have so much money, they can buy this bank and get a chunk of all the startups easily enough).
- johnbellone 4y ago
  The music stopped. Hopefully some of the people that got out of their chairs went to a real bank.

whodidntante 4y ago

Seems a lot of stupid rich people (as in stupid and rich) who made their money on unfettered capitalism now want the taxpayers to pay for their mistake. Who puts millions of dollars in bank deposits ? Especially an undiversified bank where the limit of security is $250K. You put your money in short term treasuries and transfer what you need to pay bills. Lazy or ignorant does not mix well with large amounts of money. Back in the day when I had a VC startup (top tier valley VC), SVB was the place you were "coached" to use, as well as which companies to buy your "services" from (needed or not). Incest never works out too well. If the billionaires want a bailout, they can simply buy the bank and run it. Of course, they were the ones who added the kindling by encouraging people to take their money out, but now that they missed that opportunity, they are now asking for the public to bail them out.

resters 4y ago

Why is this flagged? Garry represents YC and his ridiculousness should not be suppressed from HN.

greenyoda 4y ago
It could have been flagged because there was a very big discussion of it earlier: https://news.ycombinator.com/item?id=35114009 https://news.ycombinator.com/item?id=35114009 (369 points, 743 comments)
- cassianoleal 4y ago
  If that's the case, why is that one flagged then?
  - nickthegreek 4y ago
    Some people flag because they think that asking for a bailout is ridiculous. Other people flag because they want to hide the shame.

deleted 4y ago

[deleted]

joseftexas 4y ago

Not going to happen. Supreme court has ruled depositors as investors. The pecking order after 250K is just slightly better than unsecured loan and shareholders. Who would have though Lehmans 2.0 replay itself again.