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Was SVB actually lending money to companies with no revenue? Isn't that where VCs should be?
by throwawaysleep 4y ago
Was SVB actually lending money to companies with no revenue? Isn't that where VCs should be?
- chernevik 4y agoI'm sure they weren't lending to zero revenue companies but there are lots of new small companies with some revenue and capital that need some momentary liquidity: credit lines, bridge loans to next equity funding, etc. And loans/services to people with stakes in such companies. Need a loan to fund exercise of options in a private company that's doing well? SVB might do something like that, Citibank not so much. A knowledgeable bank can safely make such loans but no regulator will.