There was a moment where they could have mustered up a bridge loan to SVB, probably at very favorable terms, saved their companies and acquired some decent assets while they're at it.
Instead they DDOSed their own bank, tanked a large portion of their portfolio, and now are asking for a bailout.
It seems like the VCs should shore up their companies until SVB is wound down or take the losses. It's not like they don't have the capital.
I can imagine how that conversation would pan out:
"Hello, Mr PIMCO Manager. Hi, we need 80% of your committed capital in less than 2 hours in order to bail out a failing bank in which we are not a shareholder or board member. Oh yes, I don't know how much we need, but its, like, a lot. Unfortunately, we don't have any collateral on this if FDIC takes over, but I'm working on it!
Oh yea, about those mark-to-market positions, can we talk about that later please? Can we count on your capital? "
One, they couldn’t. It’soutside their mandates; they’d have to raise new funds from LPs. Two, why? Just have your start-ups pull their capital and bank with the countless other banks providing the same services as SVB.
> SVB “didn’t have nearly as much capital as an institution that risky should have had”
https://www.bloomberg.com/news/articles/2023-03-10/svb-spect...
blaming the customers for wanting to save their money and claiming as if they were the cause of the bank's recklessness seems really strange.
Are you saying every bank in the world has assets significantly less than liabilities due to over exposure on long term low interest rate bonds?
Imagine using this excuse in any other situation: "It's not the food poisoning at my restaurant that's causing me to go out of business it's those darned customers who stopped eating here!"
I wonder if any US bank could muster up $100b in 24 hours.
(On most days with lots of withdrawals, like on common pay days, banks will see lots deposits too. They aren't one-directional and out of the blue.)
I'm not sure you have the right scale in mind. The shortfall associated with this bank may be into the tens of billions. That's a monstrous sum even for SoftBank.
bridge loan or bailout?