SVB was considered the "standard" bank for all startups for decades so it's not surprising that YC would give the same advice. If you run a startup out of a normal bank sometimes you get weird glitches: https://mitchellh.com/writing/my-startup-banking-story
Of course today startups are probably using Mercury/Ramp/whatever.
SVB depositors were mildly interrupted, no doubt, but there's little reason not to exercise extreme moral hazard in banking. OPM will bail you out via FDIC. Theoretically that has a limit but in practice FDIC usually will bail out the full balances even over the nominal limit.
If I had an FDIC account I would basically want a bank that invests my money in the most wildly hazardous ways with the most reckless financial controls to give the max returns and flexibility, then let everyone else bail me out if it went south.
Go back to the SVB failure threads here and observe the freak out before the decision was made to reimburse deposits above FDIC limits. Sometimes you’re lucky, but luck is not effective risk management.
What's the context here? When, where and for what did they recommend SVB?
(FWIW, it did end well, as going with a relatively large federally insured bank meant that no one lost any money during the crash)
SVB was considered the "standard" bank for all startups for decades so it's not surprising that YC would give the same advice. If you run a startup out of a normal bank sometimes you get weird glitches: https://mitchellh.com/writing/my-startup-banking-story
Of course today startups are probably using Mercury/Ramp/whatever.
I don't see any weird glitches there
chase did what they were asked for years
up to the point they were told there had fraud going on, at which point the walls went up
which is entirely as to be expected
SVB depositors were mildly interrupted, no doubt, but there's little reason not to exercise extreme moral hazard in banking. OPM will bail you out via FDIC. Theoretically that has a limit but in practice FDIC usually will bail out the full balances even over the nominal limit.
If I had an FDIC account I would basically want a bank that invests my money in the most wildly hazardous ways with the most reckless financial controls to give the max returns and flexibility, then let everyone else bail me out if it went south.
Go back to the SVB failure threads here and observe the freak out before the decision was made to reimburse deposits above FDIC limits. Sometimes you’re lucky, but luck is not effective risk management.
> OPM will bail you out via FDIC.
I'm waiting for the demands for a bailout when the next big stablecoin goes bust. Especially if it's Trump's.[1]
[1] https://finance.yahoo.com/news/trump-usd1-stablecoin-hits-5b...