Hear me out: shouldn't venture capital be providing backstop capital for it's ventures? The money is there, and will eventually be unfrozen; the individual startups only need access to make the next one or 2 payroll runs.
VC firms don't hold capital either - LPs do. They may be able to do a capital call, but it'll take time.
Many SVB startups with more than 20 - 30 employees can't make payroll on Monday.
Edit: It's also unclear today whether the assets held by SVB can cover all the missing deposits, since they will likely need to be sold under market rates to liquidate all of them in the near-term.
> VC firms don't hold capital either - LPs do. They may be able to do a capital call, but it'll take time.
Are you (and the YC boss) suggesting that the government is more nimble than VC machinery at deploying capital when shit hits the fan?
Re: your edit: how is it unclear? There are no allegations of fraud or other irregularities- the thesis that they put depositors funds in long-term bonds (with positive interest) and then had a run
> Are you (and the YC boss) suggesting that the government is more nimble than VC machinery at deploying capital when shit hits the fan?
I can't speak for YC. VC is almost certainly faster, but it's not built to wire money over the weekend. The issue happens when the FDIC insurance isn't enough make payroll on Monday. I don't think the government can bail anyone out in that time period either, but a lack of solutions doesn't make it any less of a problem.
> How is it unclear?
On paper, they have enough in assets (as of Dec), but there's no way to know if the market takes that price as the FDIC sells it off to cover the deposits in the coming months. Typically liquidating a position impacts the price of an asset.
Maybe with 'mark to maturity' accounting which banks can use in some circumstances. But T-bonds aren't cash in hand. There is a loss to be realized when selling before maturity. This leads to using 'mark to market' accounting which helps to ensure more prudent reserves.
