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Out of interest, why did so many VC funds and their playthings bank with SVB?
by jimnotgym 4y ago
Out of interest, why did so many VC funds and their playthings bank with SVB?
- MaxfordAndSons 4y agoIt's in the name
- metalspot 4y agobecause SVB was making loans to the startups they invested in. startups had a contractual obligation to bank exclusively with SVB and then SVB would give them loans, so they had a fat cash balance on their balance sheet, but they couldnt actually withdraw the money. SVB was getting paid to make startups look good so they could raise more money.
- jimnotgym 4y agoSo it sounds like the depositors did know they were working with a higher risk bank?