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> This whole story is so bewildering, probably the only bank I can think of that was killed by its own customers (flaky VC herd) despite being generally healthy and having picked the least worst option last year (maturity risk). VCs now banding together is laudable, but why there wasn’t a Buffett type preferred stock rescue earlier this week to save their literal community bank is kinda beyond me.

That was my take as well: https://news.ycombinator.com/item?id=35103411

I'd love to see the partners of Sequoia, Union Square, YC, and other VC firms grilled by members of Congress over this.

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> I'd love to see the partners of Sequoia, Union Square, YC, and other VC firms grilled by members of Congress over this.

Yup, and how Peter Thiel and his fund just so happened to say "You need to move your money out of SVB, and you need to do it TODAY", on Thursday, to all their startups...

And by Friday night were offering those same people bridge loans via Brex…

That doesn't sound like bad advice from him

It's a self fulfilling advice.

Though granted, SVB is a ticking time bomb since all of their deposit went to low yield long term securities. So such a run would have been an eventuality in the current interest rate.

The question is, who else is doing this.

+1 re LTCM resolution, also great example.

I’d rather hope that in the unlikely event of there being no private market buyer(s) and a public solution becoming necessary, that lawmakers will at least force some wider ecosystem stakeholders to chip in.

The SVB CEO’s call of basically begging for people to support them the way they tried to support them for 40 years was very emotionally relatable. It’s one story if they’d gotten back with “Greg, we really spent day and night pouring over the balance sheet etc but couldn’t get there”, but as far as I recall TPG was the only publicly known group to even seriously look and consider.

It sometimes makes me think that if there’d ever be a war in my lifetime, the very last regiment I’d want to serve in would be the Bay Area one. Imagine being in a foxhole with Sacks crying for the government, Balaji just stringing random words together, and 80% of the rest just opportunistically and led by Thiel weaseling out through the back trench…

+1 despicable behavior.

If even one option or short position is found for anyone involved I hope they face jail time (spoiler: they won’t).

Why would shorting be illegal?

Tempted to come up with a market manipulation angle, but actually great question.

If eg Founders Fund put on a decent short right before mailing the portfolio, I wonder how one could pierce through a “how’s that different from Hindenburg / Adani” defense.

Fingers crossed for a good Matt Levine take next week…

Shorting is not illegal - market manipulation is.

You can't blame the participants in a bank run on the bank run. Blame management that put the bank in a bad financial position.

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