The Ledger
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Delangue: 95% of a VC's Value Is Financial Capitalization and Support
“Investors are first and foremost investors, right? Meaning that their main value add is to deal around To help you on financial matters. So for example, when SVB go down, right? And then to help you to always capitalize the company the right way. So they're, i…”
Ackman: Lack of SVB Guarantee Would Have Caused Regional Bank Runs
“Woke up Saturday morning after the events of the week, pretty convinced that if the government didn't, at a minimum, guarantee deposits at Silicon Valley Bank, we'd have a massive run at pretty much every regional bank on Monday.”
O'Driscoll: 70% of US tech unicorns are actually worth under $1B
“I think the data there says 20 to 30% max. In other words, which of the meat, if you say you have to be roughly a hundred million bucks, roughly growing more than 20% and vaguely at or near profitability, what they were saying is that percentage is, you know, …”
Carney: The Federal Reserve Will Cap Interest Rates at 5.25%
“And you know, if we had been talking at the end of February, early March before Silicon Valley bank, I would have said something to the effect of, I think the fed may have to go to six percent fed funds. Now I think they'll probably stop at five, five and a qu…”
Carney: Mid-Sized Regional Banks Face Systemic Danger From Flighty Corporate Deposits
“Kind of barbell strategy was, it was dangerous to be in that awkward middle where you're a large regional, and therefore you have a lot of corporate deposits, deposits above the minimum, They turn out to be much more flighty. What we saw with Silicon Valley, w…”
Stebbings: VCs did not cause the Silicon Valley Bank run
“Can I be honest, it really pissed me off when I saw a lot of people say, oh, VCs are to blame for the bank runs. I was like, are you kidding me? Have you studied the mechanics of how banks work in SVB's balance sheet? It was not VCs that caused the bank runs.”
Maples: Protecting SVB depositors does not resemble a bailout
“Yeah, it's incredible to me that you could put your money in a bank, that there's not transparent reporting that the federal government said was okay, and now it's like somehow an entrepreneur's fault because The bank's assets weren't what they said they were,…”
Reses: SVB made a critical error by announcing an unclosed capital raise
“They should have raised the money. Made the announcement that they raised the money and that they were in great position. And so that dynamic and the advice they were getting in that situation, very unusual.”
Reses: Banks with concentrated customer bases will face panic deposit withdrawals
“And I do think those banks will start to see deposit pulls just out of panic, even if they have a very strong balance sheet.”
Reses: Startups made major mistakes concentrating all capital at SVB
“A lot of companies made a lot of mistakes about their own assessment of risk. In addition to just, you know, the powder keg that happened the moment people realized that SVB might be a challenge.”
Stebbings: Founder Casually Downplayed $111M SVB Exposure During Bank Run
“I had one brilliant email, and it said we have a hundred and twelve million in cash a 111 of which was in SVB. Uh-huh. Not to worry. I'm sure we'll get it resolved soon.”
Dickson: SVB asset values exceeded total deposits at year end
“Now, if a quick look at their, and SVB's balance sheet as of year end if you take the market value of their investment portfolio, both the AFS securities and the health for maturity securities plus their loan portfolio, which should be saleable it's more than …”
Dickson: Only nine US banks failed in five years post-financial crisis reforms
“After, after Lehman's collapse, and that the global financial crisis, almost 400 banks failed in this three years after Lehman went down. And so then the regulatory frameworks were amped up, liquidity and capital requirements were amped up, and in the last fiv…”
Dickson: FDIC will orchestrate SVB sale to prevent systemic crisis
“I'm in complete agreement because I think the FDIC is fully aware that the potential crisis of confidence among depositors is something that must be avoided at all costs, and the simplest and most elegant solution to that is orchestrating continuity through a …”
Dickson: SVB failed due to duration and concentration risks, not credit risk
“For SVB, but unlike Lehman, their investments were in agency-backed MBS and Treasuries, relatively conservative and low risk at the time. They just went long on duration for their investments, and they had concentration risk in their depositor base.”
Stebbings: Only 1-2 of 100 Portfolio Founders Did SVB Scenario Planning
“Respectfully, I, Probably had one or two out of maybe a hundred.”
Ackman: SVB was unique in its disproportionate long-duration asset exposure
“Silicon Valley Bank was, I would say, unique in the disproportionate amount of exposure they had to, kind of, long-duration fixed-income assets versus other banks.”
Dickson: SVB invested over $90B in long-dated MBS
“So SVB invested heavily in long-dated securities, over ninety billion dollars, mostly in MBS with maturities greater than 10 years.”
Dickson: SVB depositors tried to withdraw over $40B in one day
“When that didn't materialize, depositors panicked and attempted to withdraw over forty billion dollars in a single day.”
Dickson: SVB's $15B mark-to-market gap exceeded its Q4 market cap
“At the end of 22, they reported ninety-one billion dollars of held to maturity securities, with the actual value of seventy-six billion. That 15, fifteen billion dollar gap Was bigger than their market cap for most of the fourth quarter.”
Reses: Only 2% of SVB depositors were under $250k limit
“SVB also was uniquely concentrated in terms of larger deposits. I think only two percent of their depositors were below the 250,000 amount per account. The rest were above.”
Akhund: Mercury is the only startup-focused challenger bank in the U.S.
“If you take what we're doing at Mercury, there's no one else really doing a startup focused challenger bank. I would say the zero, which is really good. The only people we're competing against is Silicon Valley Bank and First Republic and Chase.”
Rampell was the first investor in SMB bank Mercury
“Like, I was the first investor in Mercury the, you know, SMB bank, and like, until SVB failed, I don't think they never stole a customer from SVB.”
Maples: 85% of Floodgate founders stayed focused during SVB collapse
“85% of the founders that we worked with, and I feel really lucky, we made good choices of who we decided to go into business with, but 85% of the founders were just like on it, and we were just like taking care of business, right, and not wasting time on the s…”
Reses: SVB staff signed four-week contracts with FDIC
“So in the case of SVB, for example, the team at SVB has signed four-week contracts with the FDIC.”
Silicon Valley Bank financed 60% of Harlem Capital's Fund 2 GP commit
“Second thing we did in fund two, which we didn't do in fund one, which was help, was get a GP credit line. Right. So basically we use Silicon Valley bank. They put up 60% of our GP stake. We put up 40% of our cash and over time it gets paid.”
Lynn: SVB tracks over 200 non-institutional sub-$150M VC firms in Bay Area
“Is there are, I just talked to Silicon Valley bank and they're tracking over 200 firms only in the Bay area of one hundred and fifty million dollars or more or less like 150 or less without institutional capital. So this is not even counting the number of firm…”