It’s hearsay, honestly, but I heard that participating in their venture loan program involved keeping your deposits exclusively with them as a form of collater

It’s hearsay, honestly, but I heard that participating in their venture loan program involved keeping your deposits exclusively with them as a form of collateral. For hyperoptimistic founders and VC’s, the opportunity for loans where they aren’t otherwise available may have thrown responsible banking practices out the window. It would fit the character of the startup industry, seems reasonable from a lending standpoint, and explains why VC’s are now acting like they got caught with their pants down, so I’m curious of there’s truth to it.