The truth is VCs are terrified their investments in their startups are going to go to 0. That’s why the biggest most vocal people are VCs talking about this. So they are framing the “we need to make depositors whole” as if they care about small business when really they are just talking their own book.
The real solution is that VCs should give a loan to all their startups so that they can make payroll. Isn’t that their value-add? They should be the backstop for their investments. But instead they want the government to step in.
It’s another example of “socialize the losses but privatize the gains.”
Exactly, none of them are pointing out what percentage of the money that is currently tied up was going to be sent out as payroll for people making under 100k/year over the next 30 days.
If the Fed came out and said "We have reviewed all the depositors and their situations and we are funding 100% of payroll and basic operating costs needs for the next 90 days" The VCs would immediately come up with another reason why ALL depositors need to be made whole immediately.
Their goal isn’t to see a run on SVB. But to save their investments they all told their startups to pull their money which cause svb to collapse. Now they want the rest of their money safe which is why they want a bailout.
The real solution is that VCs should give a loan to all their startups so that they can make payroll. Isn’t that their value-add? They should be the backstop for their investments. But instead they want the government to step in.
It’s another example of “socialize the losses but privatize the gains.”