ZeroHedge added an update to their earlier update:
Founders Fund, Other VCs Advise Companies To Pull Cash From SVB
Update (1730ET): SVB must have seriously upset someone...
Founders Fund, the venture capital fund co-founded by Peter Thiel, has reportedly advised companies to pull money from Silicon Valley Bank..
The firm told portfolio companies that there was no downside to removing their money from the bank, according to the people, who asked not to be identified because the information isn’t public.
Additionally, Bloomberg reports that Garry Tan, the president and CEO of Y Combinator, warned its network of startups that solvency risk is real and implied they should consider limiting their exposure to the lender.
“We have no specific knowledge of what’s happening at SVB,” Tan wrote in a post viewed by Bloomberg News.
“But anytime you hear problems of solvency in any bank, and it can be deemed credible, you should take it seriously and prioritize the interests of your startup by not exposing yourself to more than $250K of exposure there.” He added, “Your startup dies when you run out of money for whatever reason.”
Venture firm Tribe Capital has advised its portfolio companies to move some, if not all, of their balances from SVB.
“What’s important to understand is that banks all have leverage and they use deposits, so almost by definition any bank with a business model is dead if everyone moves,” Tribe co-founder Arjun Sethi told portfolio companies in communication reviewed by Bloomberg.
“Since risk is non-zero and the cost it tiny, better to diversify your risk if not all,” he added.
An email thread of more than 1,000 founders from Andreessen Horowitz was abuzz with the news Thursday, with many encouraging each other to pull cash from the bank.
SIVB shares down further after hours (-70%), back below $80...
....MUCH MORE
Huh.
Shades of Senator Chuck Schumer when he caused the bank run that led to the collapse of IndyMac in 2008
