,‘This is an “extinction level event” for startups and will set back startups and innovation for 10 years or more. BIG TECH won’t care about it. They have cash elsewhere. All the small startups, the Googles and Facebooks of tomorrow, will be extinguished if we don’t find a solution.’,
– Gary Tan, President and CEO of Y Combinator
Following Friday’s failure of Silicon Valley Bank, the biggest bank failure since the collapse of Washington Mutual in 2008, Gary Tan on Twitter called it an extinction-level event for startup businesses with a decade’s worth of potential set innovation. Is.
President and CEO of Startup Accelerator Y Combinator That tweet came after Federal Deposit Insurance Corp was placed in receivership of Silicon Valley Bank, a unit of holding company SVB Financial Group SIVB.
after it was shut down by California regulators.
SVB Financial faltered as its top tech borrowers burned exorbitant amounts of cash
One problem with FDIC receivership is that the federal regulator only insures deposits up to $250,000.
Had something to say about the body:
The Silicon Valley bank operates 13 branches in California and Massachusetts and has approximately $209 billion in total assets and approximately $175.4 billion in deposits by the end of 2022. According to the FDIC, the bank will reopen on Monday.
20 banks that are sitting on huge potential securities losses – as was SVB
Tan went on CNBC and made an even more dire prediction:
Of these “thousands of small businesses” and “big drivers of GDP” in the future, Tan said this: “They are never going to have a chance to happen in the future, and it will be to the detriment of thousands of people.” Jobs, if not thousands of jobs in the future.
“The financial world doesn’t have the capacity to save these companies, like, if we allow these companies to die over the next … weeks, we’re going to throw startup innovation wholesale in America … and it’s really It’s next week.”
Tan said companies have been calling him, asking how they are going to make payroll since all their cash is in SVB accounts.
“The FDIC really needs to keep these guys in mind, these are the little guys, if we hurt them, it hurts all of us,” Tan said. “This is a national-security issue. … It will spread throughout the economy.
Credit: www.marketwatch.com /