I really think SVB is a symptom of the VC bubble bursting more than it is evidence of a systemic failure of the US banking system beginning a-la 2008. I assume that’s not what a lot of people who follow me want to hear. But I think it happens to be true.
Discussion
Cost of financing going up isn't the biggest factor you think?
The risk-free rate is nearly at 5% right now! Has anyone seen how shitty LP returns have been on average over the past 5 years? SVB had all their eggs in that basket, and they designed a balance sheet with a duration risk and asset strategy that didn’t take into account the possibility the music could stop. And the music has been stopping. Ask any founder who has tried to raise in the past six months.
A glorious age of 0% interest for ever. I guess only if you assume that does 30 years at 1.5% sound like a good idea?!?
dude, come on, we’re groupthinking over here
#BailOutTheVCs
What's your take on VCs in general?
It will be interesting to see it is handled compared to last time. Are VCs as critical as Wall Street in the eyes of the govt? I’m think so, 1000x
Savage 🔥
#Un-loquatious
I can do it
Nearly 50% of all venture capital-backed startups in the US had exposure to Silicon Valley Bank
SV was corny since 2015.
Over 1000 YC startups impacted, and they are only a fraction of total ecosystem. Also with many jobless, I hope Nostr and Web5 will be a great opportunity for everyone to find use-cases and start building on these ecosystems. At least don’t have to worry abt bank runs with Bitcoin!
It used to very common that incubators, accelerators, and VCs would either require or strongly suggest startups to open accounts at SVB. It made some of the transactions easier for sure. Not sure how common that has been recently, but SVB does a lot of outreach to the startup ecosystem.
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When I say we good, I mean u? I get to be a cocky little cuck for a reason
I’ll start a gofundme
this wasn’t a joke btw, I’m literally doing it. stay tuned.
(I mean, it *was* a joke, but it made me laugh so much that’s actually why I decided to do it)
Lol, or you can create your own shitcoin, fund politicians, get celebrity investors to endorse, play video games while speaking to institutional investors, raise loans through your own coin creations “assets and collaterals”, build hype, then rug-pull.
🌏 is updating.......
Appreciate the insight, Mike - helps me to better understand what's possibly going on 🙏
lots of us (me) dunno much about this stuff…could you explain more on vc bubble bursting?
like, how goes vc bubble burst —> to svb imminent failure?
low interest rate environment of last few years created environment of outsized capital deployment. VCs spent fast in big early rounds. Those startups deposited money into SVB.
SVB put that money to work but the assets they got have depreciated against interest rates (they lost billions).
Add to that, startups aren't raising as much. So deposits incoming to SVB are nowhere what they were. So they can't meet their deposit liabilities.
Your post is being well-received.
Added to the https://member.cash/hot feed
Apparently laws changed in 2018 and they didn’t have to actually meet reserves and of course, no policing of it so… SVB did the minimum. They’ll keep their yachts, Im sure. 🙄
This is the correct take
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