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> It's not VCs or SMB owners obligation to keep propping up failing banks. Thiel here did his job properly by advising his companies to take care of their own

> It's not VCs or SMB owners obligation to keep propping up failing banks. Thiel here did his job properly by advising his companies to take care of their own fate. He might've done his short term job properly, but there's a social contract he stepped on and the consequence of it is a lesser likelihood that ventures with his name on them (in any capacity. Advisor, investor, founder, whatever) will get favorable terms from lenders. He and others who pushed for rapid exits are now a high risk for lenders, especially any lenders already evaluating their exposure to startups and VCs.

testfoobar 4y ago
VCs have fiduciary responsibility to their Limited Partners. VCs must act in the best financial interest of their LPs. So if a VC knew or suspected that their investments were at risk due to bank insolvency, they have a fiduciary responsibility to act. Otherwise LPs could sue for breach of fiduciary duty.
- eganist 4y ago
  > VCs have fiduciary responsibility to their Limited Partners. > VCs must act in the best financial interest of their LPs. So if a VC knew or suspected that their investments were at risk due to bank insolvency, they have a fiduciary responsibility to act. Otherwise LPs could sue for breach of fiduciary duty. No VC is getting sued for not telling their startups to yank cash during a 48 hour bank run.
  - twblalock 4y ago
    Wait and see, I bet it will happen.
- FireBeyond 4y ago
  What happens if Thiel is discovered to have had insider information about the impending closure of the bank? In between the very specific timed messages on Wednesday, to get funds out on Thursday, and for Brex to have an application up and running by Friday afternoon to be ready to take loan apps for people, it certainly doesn't seem out of the realm of possibility. Does his fiduciary duty to LPs outweight the insider information? IIRC its actually illegal to encourage or push a bank run.

testfoobar 4y ago

VCs have fiduciary responsibility to their Limited Partners. VCs must act in the best financial interest of their LPs. So if a VC knew or suspected that their investments were at risk due to bank insolvency, they have a fiduciary responsibility to act. Otherwise LPs could sue for breach of fiduciary duty.

eganist 4y ago
> VCs have fiduciary responsibility to their Limited Partners. > VCs must act in the best financial interest of their LPs. So if a VC knew or suspected that their investments were at risk due to bank insolvency, they have a fiduciary responsibility to act. Otherwise LPs could sue for breach of fiduciary duty. No VC is getting sued for not telling their startups to yank cash during a 48 hour bank run.
- twblalock 4y ago
  Wait and see, I bet it will happen.
FireBeyond 4y ago
What happens if Thiel is discovered to have had insider information about the impending closure of the bank? In between the very specific timed messages on Wednesday, to get funds out on Thursday, and for Brex to have an application up and running by Friday afternoon to be ready to take loan apps for people, it certainly doesn't seem out of the realm of possibility. Does his fiduciary duty to LPs outweight the insider information? IIRC its actually illegal to encourage or push a bank run.