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Many were restricted by covenant with their investors to only use SVB.

by kemiller 4y ago

grugagag 4y ago
Id like to hear more about that.
- roflyear 4y ago
  I've heard it was mostly they had credit agreements with svb that required them to bank exclusively with svb
  - eternalban 4y ago
    Is this correct then? : SVP gives easy credit to VC friends. VC friends use that credit as investment in startups who are told they must use SVP. So money moves from magic-money-printer -> SVP -> VC -> Startup -> SVP. Then SVP takes those deposits and invests it elsewhere. Now they are making money from loan to VC and reinvestment of those same monies that are deposited back. So a bank like SVP seems designed to enable VCs with easy credit to de-facto control an important (and balooning) niche of the economy and by their control over the beauty pageant of which startup idea gets money (and PR) they also control what kind of technology becomes dominant. (For example, these VCs share significant credit/blame for creating the surveillance tech. They share blame for creating an engineering culture that must serve full throttle growth business models. etc.) Is there a social graph of SVP and VCs involved? Are these people pals, friends, "effective" ideologues, etc.?
    - belter 4y ago
      That social graph is the definition of the VC ecosystem.
    - roflyear 4y ago
      > VC friends use that credit as investment in startups who are told they must use SVP. Maybe, but I was talking specifically about startups themselves being given loans by SVB then requiring the startup to bank there. But I am sure investors also pushed startups to SVB... if your investor (who maybe is highly invested in SVB ... ) says "you should use this bank" are you going to say no? The pressure is immense. > Is there a social graph of SVP and VCs involved? Are these people pals, friends, "effective" ideologues, etc.? I'd be more surprised if they weren't.
belter 4y ago
Because it was providing loans to the VCs and they saw it convenient, to force their startups there. High risk for High reward... "The rise and stunning fall of Silicon Valley Bank" - https://www.axios.com/2023/03/11/silicon-valley-bank-rip https://www.axios.com/2023/03/11/silicon-valley-bank-rip
deleted 4y ago
[deleted]

Many were restricted by covenant with their investors to only use SVB.

grugagag 4y ago

Id like to hear more about that.

roflyear 4y ago
I've heard it was mostly they had credit agreements with svb that required them to bank exclusively with svb
- eternalban 4y ago
  Is this correct then? : SVP gives easy credit to VC friends. VC friends use that credit as investment in startups who are told they must use SVP. So money moves from magic-money-printer -> SVP -> VC -> Startup -> SVP. Then SVP takes those deposits and invests it elsewhere. Now they are making money from loan to VC and reinvestment of those same monies that are deposited back. So a bank like SVP seems designed to enable VCs with easy credit to de-facto control an important (and balooning) niche of the economy and by their control over the beauty pageant of which startup idea gets money (and PR) they also control what kind of technology becomes dominant. (For example, these VCs share significant credit/blame for creating the surveillance tech. They share blame for creating an engineering culture that must serve full throttle growth business models. etc.) Is there a social graph of SVP and VCs involved? Are these people pals, friends, "effective" ideologues, etc.?
  - belter 4y ago
    That social graph is the definition of the VC ecosystem.
  - roflyear 4y ago
    > VC friends use that credit as investment in startups who are told they must use SVP. Maybe, but I was talking specifically about startups themselves being given loans by SVB then requiring the startup to bank there. But I am sure investors also pushed startups to SVB... if your investor (who maybe is highly invested in SVB ... ) says "you should use this bank" are you going to say no? The pressure is immense. > Is there a social graph of SVP and VCs involved? Are these people pals, friends, "effective" ideologues, etc.? I'd be more surprised if they weren't.

belter 4y ago

Because it was providing loans to the VCs and they saw it convenient, to force their startups there. High risk for High reward... "The rise and stunning fall of Silicon Valley Bank" - https://www.axios.com/2023/03/11/silicon-valley-bank-rip https://www.axios.com/2023/03/11/silicon-valley-bank-rip

deleted 4y ago

[deleted]