The Tantrum Venture Capitalists Threw over Silicon Valley Bank
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But I have never seen the VC community so vocally begging for instant government intervention for anything else in my life.
These VCs would be first ones to tweet about how the government agencies are a bloated mess, a revenue sink, an archaic institution that needs to sold for parts.
But when there was a fire in their backyard, they did not "innovate", "disrupt", or "take initiative". They hounded the government like entitled brats, to fix the mess which was in no small part their own doing.
Yup that's what we got to see this weekend - that SV libertarian "we'll take care of it ourselves" ethos.
Will claim nonstop about how society and the system just gets in the way and slows them down. Will break any rule to make more money claiming they're being helping and it's fair because they don't need back stops or safety nets just leave them be and they'll stay out of the way.
And yet the min their excess profits were at risk, they were literally begging the government to step in and save them.
Every single time I've ever seen a group claim it's fine to let them be exempt from rules of society because they'll handle their own problems, it turns out to be complete bs - because as soon as things get tough, they start asking for "society" to step in a save them.
Simply from my own life experience, every one whose ethos is eliminate regulations and oversight always turns out to a hidden "privatize profits and socialize losses".
Every single time a group claims "we don't need the support of X system or regulation we'll take care of it themselves if it happens" - it always ends up being "we didn't think we'd ever need the support that's why we wanted to cut it, but now they we're the ones in a bad situation please give us the support". It's always a lack of empathy and believing fate doesn't apply to them.
Crypto's frequent "Code is law. Oh no wait, were being screwed, code isn't law, let's fork the system."
"Don't bail them out anyone who asks for a bailout is an idiot and deserves to be punished. No we need bailouts now to keep our returns.!"
"Get rid of banking regulations they just are overhead and block innovation. Oh no, were about to destroy the economy by being reckless in the exact ways those regulations were meant to prevent."
There is a reason that every success group of humans have evolved into a society with social benefits being prioritize with individual benefit. Anyone who thinks a society can function solely by ignoring and not regulating societal impact of actions is incredibly naive.
In this case market failure would be the intended feedback mechanism. There's also the larger context of years of artificially cheap credit to consider. Lastly, there are malign incentives around banks buying treasury bonds, thereby loaning cash to the gov.
I agree. Changing the rules in the middle of the game isn't Hoyle. Not sure that the conclusion, "we need more power in the hands of capricious referees" follows.
What is your basis for this assertion? The words used don't even say they 'should be' made hole, but declare by fiat that it must happen.
That's often the truth. The government does a lot of bad things, and a lot of regulations are bad. When someone complains about the government it doesn't mean they also oppose the good things the government does, and it doesn't mean they oppose the concept of government.
Most VCs and major tech CEOs are Democrats. Look at their political contributions.
When the pandemic struck, there were a good bunch of them who couldn't wait to move to Texas or Florida.
I'll also bet that SV executives and VCs overwhelmingly donated to Democratic presidential candidates and other Democratic candidates out of state. It's not just buying favor with California politicians.
No, there were a few loud ones. Most of them stayed.
"No handouts, unless they are for me."
It may not be coming from income taxes, but it's definitely socializing the losses and I would argue it's effectively coming from the taxpayers.
To me as a low information armchair expert it seems bizarre that Thiel could move money out while SVB was having trouble moving money at all.
I also don't blame them for whining and complaining, likely anyone would do the same. The Fed sometimes has to make tough decisions, complying with everything that VCs want just reduces any faith or respect markets have for the Fed and its officers.
Of course we all want that, the issue is that there are long-established, clearly-defined rules for how much of your account is protected that somehow don’t apply to the rich.
For you or I it’s $250,000. Need more to be whole? Too bad, suck it up, that’s the law. But VC accounts? 100% recovery sir, sorry for the trouble!
>I also don't blame them for whining and complaining, likely anyone would do the same.
Except until last week most of these guys were crowing about PERSONAL RESPONSIBILITY and living with your choices and how handouts and bailouts were evil in response to workers and consumers asking for anything
Curiously though, when it became about their money, suddenly it’s GOVERNMENT HELP
Most bank failures result in all depositors being made whole - even over the limit. Normally by regulators “hinting” that a larger bank should acquire the failing banks assets whole.
FDIC exists to create faith in the banking system - no to just enforce a rule book on how deposit insurance is structured. The goal is for FDIC to never have to pay out in the first place - FDIC’s existence prevents the bank run from starting.
The obvious conclusion to the 250k limit (splitting deposits between banks) doesn’t really do anything to actually reduce risk in the banking system, or risk to FDIC. Splitting deposits like this is artificial behaviour that doesn’t have any real benefits to overall stability of the economy.
Because you're engaging in the classic Hacker News behavior of a narrow technical point that misses the larger context.
People aren't upset about the mechanics of the FDIC. People are upset that time after time the rich make blunder after blunder after blunder and time after time are protected from their own idiocy and hubris in circumstances where everyone else would be left to rot. The same people who, when the shoe is on the other foot, gleefully lecture everyone else about choice and consequences and patronizingly tell them to learn about better personal finance habits.
You're describing the biology of an individual tree and missing the forest. You've filled this discussion with many comments all missing the bigger picture of what's going on and why people are angry about this. You can't analyze events in a vacuum.
I actually think this has created a precedent that will protect deposits of over $250k at small banks. Which is not the domain of poor people, but also not necessarily that of billionaires. So this whole fiasco has created protections that more-or-less ordinary people may well benefit from.
Plus, although $250k is a lot for an individual, it isn't necessarily a ton for a business. For example, I once encountered a small software company of about four people, funded by "friends and family" investors (mostly immigrants), that had about $500k in the bank. The employees were solidly middle-class, and the founder was maybe on par with your typical dentist.
So I don't view this as only a bailout for billionaires, because I think bank failures can affect anyone with a little money.
However, I will grant you -- or volunteer -- the following comparison: Compare this rescue, to what hasn't been done for the residents of East Palestine. That situation is a little different, because the railroad can surely pay for it, so there's no need to consider passing any liability through, say (by analogy) to the railroad industry as a whole. If the executive and judicial branches had been as swift to act in that case as the FDIC, Fed, and Treasury have been in this case, then the people of East Palestine would have been evacuated immediately to comfortable digs, their houses bought for their pre-accident market value, and Norfolk Southern sued to pay for it all.
So while I think the right thing was done in this case, and think it will even benefit fairly-ordinary members of the upper-middle-class, I will grant you that the little guys too often do get steamrolled.
1000 businesses, 10 (same size) banks Scenario A: each bank has 100 depositors, each storing 100% of their deposit with the bank Scenario B: each bank has 1000 depositors, each storing 10% of their deposit with the bank
In both scenarios the total amount deposited at each bank is the same. The risk to FDIC if an individual bank fails is actually higher in scenario B. But the deposit insurance limit rules push us towards scenario B.
And when did VCs rail against “bailouts” in the past?
There is a pretty big difference between being a mainstream capitalist and being a libertarian.
And lest you think he's the only libertarian VC: https://www.newstatesman.com/quickfire/2023/03/silicon-valle...
And to them railing against bailouts while asking for them now (from the above article):
“Where is [the chairman of the Federal Reserve, Jay] Powell? Where is [the Treasury secretary, Janet] Yellen? Stop this crisis NOW,” tweeted the venture capitalist David Sacks – the same David Sacks who is a friend of Thiel and Musk, and who has previously heavily criticised “special-interest corruption” and bank bailouts. Bill Ackman, a billionaire hedge fund manager and Donald Trump supporter that has in the past complained about attempts by the government’s Securities and Exchange Commission to regulate one of his investment funds, performed some spectacular mental gymnastics over the weekend, calling on the FDIC to “guarantee all bank deposits”.
You seem to: 1. presume those two categories are mutually exclusive. They aren't. 2. Many of the libertarian values on the economic side, held by many in the VC/PE space regardless of political affiliation, means that just like Rand herself, they espouse -by action if not by word- "privatize gain, socialize risk" pretty much by rote.
Anyone shocked by this either isn't looking, hasn't been in this business very long, or is the person mentioned in the Steinbeck quote (paraphrased here for contextual re-appropriation) "the rubes see themselves not as an exploited set of growth-hackers and disruption-monkeys, but as temporarily embarrassed billionaires."
>a startup ecosystem and venture-capital apparatus that are too unstable, too risky, and too unmoored from reality to be left in charge of something as important as the direction of our technological development
So who should be in charge? Legislative committees? Government bureaucracies? Yeah, those should work :)
Letting people face the consequences of their venality? Now we're getting warmer.
These actually have a pretty great track record of, specifically, setting the direction of technological development. Often in a way that's more of a "here's what we want; now, private industry, go do it and we'll offer you X in return" rather than specifying the minutia, to be clear, but it's absolutely not a crazy notion. And I don't just mean NASA or the US MIC (DARPA, notably), but things like postwar Japan's heavily-government-directed R&D efforts and research-pooling initiatives, or Germany's skating-where-the-puck's-headed moves on renewable energy R&D and manufacturing back in (IIRC) the late 90s and early 00s. That we ought to rely on public efforts to direct technological development, at least to some significant degree, isn't obviously a bad idea.
https://www.amazon.com/Fifth-Generation-Edward-Feigenbaum/dp...
Or how about the US?
https://www.technologyreview.com/2011/07/25/192832/lessons-f...
So I presented three counter-examples. If you prefer to stay on an abstract plane, I think I'm out.
My post wasn't abstract. I'm just not interested in going example-for-example when my point was never "this literally always works and nothing else ever does", which is the point you seem to wish I'd advanced.
> So I presented three counter-examples.
To what end? The thing you scoffed at and dismissed remains not obviously a bad idea.
This does not mean it always works out well, but the benchmark for "damn solid" in this space is very very far from "perfect", in much the same way that an excellent batter in professional baseball still fails to get on base more than half the time—your line of attack here is just as baffling as someone countering "Joe's a solid clean-up hitter" with "yeah but look at this list of times he struck out!" It's omitting the context of what constitutes good in the space—meanwhile, he's near the top of the league in RBI. Continuing to trade anecdotes about times Joe hit a home run or times he hit an easy pop-fly to center field is just pointless noise, entirely beside the point.
That's why I keep pushing back that what you're trying to do here isn't even relevant to the point I was making, which point is quite far from being controversial, incidentally. I don't think both of us posting Amazon links to books covering the successes and failures of government-lead tech initiatives when I am not denying that plenty of failures exist in that space in the first place, is productive. If that's the way you want this to go, just pretend I've posted a series of links to mainstream macro, IPE, and tech and econ history textbooks in response to each of your (probably mostly valid!) "counter-points", because that's what I'd do, but it doesn't seem like a valuable exercise when I'm not even denying that examples of failures of these kinds of initiatives exist.
> your line of attack here is just as baffling as someone countering "Joe's a solid clean-up hitter" with "yeah but look at this list of times he struck out!"
Yes, but "Joe" has OPS numbers (which are more meaningful than the outdated RBI number, incidentally). What are your big Planning home runs?
Your "specific and oft-cited cases" are vague and not specific, on the level of "hey, Japan and Germany!" While mine are actually specific disasters.
"which point is quite far from being controversial," -- I think you mean in Ivy League faculties and scholarly journals, not in actual business publications.
"the Japanese Economic Miracle & MITI" -- yes, in fact I'm quite familiar with those. After the country was destroyed and a new society was being built, it was hardly possible not to hit a home run. Opportunity was everywhere you looked. How's it done since 1990? You haven't addressed that.
As for DARPA & NASA: you're half right. DARPA did help guide the Internet towards TCP and away from OSI. Note that the "industrial planners" in the US and in Europe were on the wrong side of that one, all the way. The French had Minitel, which was actually a pretty good idea, and then frittered it away.
As for NASA: the shuttle was a master class in how to waste money, so I don't think you want to point at that. And both NASA and DARPA were consistently opposed by nearly everyone on the left end of the ideological spectrum, It's only after you see how they turned out that you can manage to hold them up as shining examples. At the time I'm sure you'd have been opposed.
So drop the snobbery. I know the history better than you do.
Then stop pretending to be confused when I allude to cases that ought to be extremely familiar to anyone who's read up on this topic?
And stop making plainly-crap lines of argument like "it's hardly possible not to hit a home run" when a country is rebuilt after being destroyed when that's just... extremely not true, and the Miracle is such a big deal precisely because it's remarkable (though not unique—I'll go ahead and pre-empt the attack against a thing I didn't claim, given the tone of this exchange), and it's interesting and comes up all the time because it points to limitations of various simplistic models of what should work and what should not (like, say, the notion of government direction of technological development being categorically a bad idea). How has Japan done since 1990? What, is your argument that government-driven technological direction in the 60s and 70s is a key factor in the later malaise, rather than its being mostly irrelevant to that phase? Even if it was, my point was never that "this approach cannot possibly go wrong"! This is a narrow piece of the puzzle. You're not engaging with the substance, you're just casting about for gotchas. So what?
> So it's the sarcasm you object to? I guess that's all you've got.
Look, I'm done. You're not reading or posting in good faith, if that's what you've taken away from this.
or https://www.technologyreview.com/2011/07/25/192832/lessons-f...
I don't know what "space shuttle for the Moon" means. Can you explain?
Dodd Frank obviously is not good enough. If I were to guess, it was drastically weakened by lobbyists.
Sure, and we should blame Hammurabi while we're at it.
SVB was the case of a bank being stupid and not hedging against its risks. And why should they? Even if you massively mess up, there's a high probability the Fed does something to manipulate the market so you end up being just fine.
As long as you aren't the worst 1-3 positioned banks - you'll be fine.
The problem is the Fed and the incentives it creates by allowing banks to enjoy profits in good times but almost never suffer losses in times of incompetence.
You're right about the Fed Reserve, but Clinton and Gingrich were in power just a little over 2 decades ago. We can now add Trump to the roster since he had a direct hand in weakening Dodd Frank
SVBs problems didn't appear overnight. With each rate hike they were a bit worse, but had they been forced to act earlier rather than later it would have helped a lot. Regular stress tests would have performed that function.
And yet nobody knows who the fools running the bank were. We don't have their names all over the news. It's as if SVB was run automatically, with no humans at the helm.
The rich really get to destroy lives without consequence.
What are you really excoriating them for though? Destroying some capital? No one’s lives have been destroyed behind this mess
He’s already being painted as bogeyman, even before anyone has proven that he has done anything wrong.
SVB had two other problems that would not be identified simply by looking at minimum amounts: duration risk and lack of liquidity.
I wouldn’t be so sure. VCs didn’t tell the bank how to invest their deposits, but they caused some of the conditions for the illiquidity and they instigated the bank run.
Why were so many startups concentrated at SVB? VCs recc’d it to their investment companies.
Why did SVB’s liquidity dry up last year? VC funding dried up last year when interest rates rose.
How did the run on the bank accelerate so fast? VCs directed their investment companies to divest at the same time.
Why was SVB the first bank to be affected by the interest rate rises? Only about 7% of SVB’s deposit dollars were FDIC insured, compared to 40%+ of other banks of comparable size. And previous answers.
https://www.bloomberg.com/news/articles/2023-03-13/svb-failu...
https://fortune.com/2023/03/11/silicon-valley-bank-svb-ceo-g...
https://www.foxbusiness.com/politics/liberals-blame-trump-si...
And why are VC being blamed? Because apparently the lot of them can push their portfolio companies all into a single bank without doing basic business risk management like requiring fdic sweeps or audits of the svb balance sheets.
They came off as clowns this weekend.
I keep reading: "by lobbyists", "by Trump"...
But googling less then 5 seconds shows "Congress cut burdens for smaller and mid-sized banks in 2018". So blame Google ?
Or congresspeoples being more stupid then suicidal lobbyists ? I thinked elected officials should be kind of smart filter not a bucket for throwing money...
Mike Crapo Republican of ID was the sponsor in the senate.
House roll call: https://clerk.house.gov/Votes/2018216
Here is Trumps tweet on the subject. https://twitter.com/realDonaldTrump/status/99925823211057971...
For context, this rollback is actually a compromise. Jeb Hensarling of Texas lead a contingent that wanted to roll back Dodd-Frank entirely but it didn’t have the votes in the Senate because it was split more evenly between parties.
Dodd-Frank has been unpopular with conservatives since it passed. So what the lobbyists did was convince small town democrats to cross parties and vote for the bill saying it would strengthen small banks. And maybe it did! We haven’t seen a small bank failure since it passed and a few typically fail every year.
But it also let bigger regional banks off the hook.
> If you want people to blame, it’s Newt Gingrich and Bill Clinton for repealing the Glass Steagall Act.
The focus should be why Dodd Frank was watered down and neutered including placing the blame where it belongs. Most of the VCs in this case were just customers.
The other group built (like Mercury Bank) and innovated to reduce future situations like this.
Kudos to the second group.
Shame on the first group. It's sad their whining got rewarded.
Disclosures: I am an investor in a number of startups that had >$250K in uninsured deposits SVB, but I was still against the bailout b/c I think it just made America weaker in the long run. A 10% haircut would have been fine. I am also a tiny tiny investor in Mercury.
Quite a hilarious ending to see the panic and the collapse of the complete pyramid scheme. We are not even done yet since there will be more market moving news this week to completely vaporize them into pieces.
> My debut at @Slate: Venture capitalists are parasites who couldn't be trusted with the financial institution that held up their industry, let alone the direction of our technological development. Euthanizing them is imperative if we want a better world.
I probably wouldn't tweet out language about "euthanizing" "parasites" but maybe I just have a better grasp of history than the author.
There are good critiques of everyone involved in this elsewhere, I have no idea how a reasonable person could conclude this is the one that should be posted and shared.
[0]: https://twitter.com/bigblackjacobin/status/16353028722913812...
That kind of anger and _hate_ has become much more acceptable. Reasonable? No. Mainstream? Yes.
People in the Bay Area seem to live in buzzword land.
> Ruined housing market & transit systems, wagged war on labor law, accelerated the militarization of public space & the border, and intensified gambling.
https://twitter.com/bigblackjacobin/status/16353042104211496...
But sure, corporate social responsibility is a concept that has long predated the current ESG trend. We once had a society that at least paid lip service to noblesse oblige.
It's important to understand that noblesse oblige was transactional: it staved off the masses from revolting and even generated some good. When charity puts a target on your back, folks won't engage in charity.
They don't fear scolds; they fear pitchforks and, more realistically, _taxes_. You can call it cowardice but it's entirely rational.
Oh, it's be because tech companies need money to operate, and when they ask people for some of their money, the people who give them the money demand input over how that money is used. Hope that answers your question.
Now that the blood prophecy of 100,000 americans doing a universal bank run has not come to pass, he’s positioned himself as a messiah that tweeted us all back into god’s good graces.
> In the Y Combinator community, one-third of startups with exposure to SVB used SVB as their sole bank account. As a result, they will fail to have the cash to run payroll in the next 30 days. By that measure, we can estimate that payroll-related furlough or shutdown will impact more than 10,000 small businesses and startups. If the average small business or startup employs 10 workers, this will have an immediate effect of furlough, layoff, or shutdown, affecting over 100,000 jobs in the most vibrant sector of innovation in our economy.
https://www.ycombinator.com/blog/urgent-sign-the-petition-no...
Without the government's actions over the weekend, bank runs probably would have happened, and they still might.
The government did what the VCs recommended. Maybe not because of the tweets, but it still happened because what the VCs recommended was actually the right thing for the government to be doing! The systemic risk identified by the VCs is real!
I'm not attributing it to that.
I'm merely pointing out that the government is doing what the VCs were calling for, because it was clearly the correct move.
VCs ask the government to do a thing and people mock them and say it's a crazy thing to do. Then the government does that thing (whether or not they did it because VCs wanted it is entirely immaterial to my point) and you don't see the same people saying the government was doing a crazy thing.
Since 2013 there have been 71 banks fail according to the FDIC's bank failures in brief Infograph. Those 71 banks had assets totaling 23,399.20 million (or 23 billion). SVB had asses totaling 209,000 million (209 billion).[1]
Where are the 500 banks again and again every year over the last decade?
https://twitter.com/jason/status/1634771851514900480
It did lead me to a really interesting article about audience capture and how it twists “influencers” into saying and doing outlandish things though!
https://gurwinder.substack.com/p/the-perils-of-audience-capt...
I have been noticing this for a while without putting it in clear writing, and I'm glad someone did!
If a child is never allowed to face the consequences of their actions they will never learn.
If there's any ground for further actions against the management of the banks, I'm fully supportive of that, but a bunch of bank runs would've hurt everyone but them more than them.
We need to balance letting the depositors suffer with causing a system wide run, so I think the FDIC/Fed choice was reasonable, but I would have rather seen them, say, guarantee uninsured deposits, less the interest of those deposits earned over the past 18 months.
If government didn’t make it clear they were stepping in here, what do you think would have happened first thing Monday morning? Every small/medium business would have seen the writing on the wall and moved their funds out of small/medium banks and into the handful of “too big to fail” megabanks. Stepping in and making up the cost prevents contagion.
The 250k limit is somewhat of a red herring. If every depositor split their funds up to stay under the 250k limit, it doesn’t actually change the overall risk profile for the FDIC.
So you can get that risk-free extra 2% on your deposit up to 250k, or up to hundreds of millions, and the government will just pay in fine. That opens up new area of business imho.
But even if other bank runs didn't happen, there would be another consequence that I'm sure you wouldn't like either. People would understand that there are now two tiers of deposit safety: small banks where depositors might lose money above $250k if the bank fails, and "too big to fail" banks where that wouldn't happen (because they can't fail!). Everyone would move their deposits to the "too big to fail" banks, which would make those banks even bigger and more powerful.
Are we supposed to blame people for putting money in a bank that had a solid track record since the 1980s, and didn't have any regulatory red flags? Are we supposed to blame VCs for not knowing about the bank's investment problems when the regulators who were supposed to know about them didn't know either? Should we blame founders for taking banking advice from their funders and boards of directors?
Are we supposed to forget that the era of easy money the article dislikes was created by the Fed, and that the duration risk on long-term securities that doomed SVB was also realized because of the Fed's reaction to its previous mistakes?
We should blame everyone, including the government, for this mess.
When people like the author single out VCs and rant about AI being a boondoggle it's clear they just don't like or understand tech. Tech has been the space program of our generation.
We now carry devices in our pockets that put more information at our fingertips than entire civilizations could access throughout all of human history. Mobile payments have enabled entrepreneurial capitalism in impoverished parts of the world. Anywhere we are, we can get a map of our location and directions to anywhere we want to go.
The scale and technology that makes remote work even possible for much of the population didn’t even exist a decade ago. Some pieces existed but they never would have scaled the way we needed them to. If you didn’t lose your job during the pandemic, you ought to be grateful to the major cloud providers for the fact that your video conferencing software was able to function while you and almost everyone else were piling onto it. You should also be grateful there were multiple delivery companies able to bring you groceries and restaurant food when you weren’t allowed to leave the house. I know restaurants are grateful for the delivery services — so many more would have gone out of business if in-person transactions were the only way to sell their product!
Anyone who owned a total market index fund in the past decade has benefitted massively from the success of big tech, including most pension funds, university endowments, and many individuals. The creation of wealth has been enormous in scale and enormously socially beneficial.
VCs made all those good things possible and if we also get dog-walking services and NFTs of monkeys that's a small price to pay.
It does seem that VCs are not just a convenient scapegoat, but a big part of the story.
What was Thiel supposed to do, keep quiet about the problems at the bank and hope nobody else noticed? Then some other guy can be first to withdraw and take the blame, while Thiel gets soaked? Or maybe nothing happens, and the bank takes on even more deposits and fails even more spectacularly a year from now, and then people blame Thiel because he knew back in 2023 and didn't tell anyone?
YES! The $250K limit was literally in 100pt font (https://twitter.com/breckyunits/status/1635356025175027712). Amounts above that were at risk! Instead the government just ignored that, on a whim. This wasn't even in the fine print!
Can you explain to me now what rules I can and cannot pay attention to? I can't.
If the government didn't step it they would be ignoring the purpose of the FDIC. The purpose of the FDIC is to protect the banking system from runs and systemic risk. Deposit insurance happens to be the normal mechanism for doing that. When the FDIC realizes that $250k insurance is not enough to stem systemic risk, should they just forget about their mission and let the world burn?
250k is the absolute least a large depositor can recover in the event of a failure. Holding more than that is not some moral failure we should be crucifying businesses.
Instead we had whiners and panic peddlers get their 100% the dishonest way.
I would much rather have everyone take a couple % haircut than reward that kind of behavior.
It's one thing to criticize venture capitalists for promoting libertarian ideologies on one hand, and then instantly turning around and asking the federal government to bail out their portfolio companies' bank accounts on the other hand. It's OK to make fun of them too. To paraphrase the late J. K. Galbraith, in the US we see socialism in action mainly when private jets start descending on Reagan national airport, their passengers seeking federal handouts.
But the OP crosses the line into silly territory and keeps going past the line, with nonsensical statements such as "[the troubles at SVB] are emblematic of a startup ecosystem and venture-capital apparatus that are too unstable, too risky, and too unmoored from reality to be left in charge of something as important as the direction of our technological development." Left in charge? Of our technological development? That's not even wrong.