The collapse of the Silicon Valley Bank has hit Silicon Valley startups and investors in particular, many of whom had their accounts with the SVB. To prevent the bank collapse from causing trouble for the entire tech scene, some of the biggest tech entrepreneurs are now stepping in with their personal fortunes.
Sam Altman, CEO of OpenAI, told the Techcrunch portal that he will put a “decent amount” of his personal capital to work. The money should primarily help startups “who now have to do their payroll”.
On Twitter, Altman wrote to investors wondering how they could help: “Today is a good day to offer emergency cash to startups that need it for payroll or whatever. No documents, no strings attached, just send money.”
Venture capitalist Vinod Khosla of Khosla Ventures took a similar approach. In a tweet, he called on large venture capitalist companies to also advance personal capital. This applies “especially to those who take home millions in fees”.
Shernaz Daver, CMO of Khosla Ventures shared Techcrunch by e-mail, in this situation companies should expressly not use limited partnership capital. This is “inappropriate” and not the right time to make money.
Hemant Taneja, CEO of General Catalyst, also spoke out on Twitter. It is nice to see how many VC companies are providing cheap loans. In his tweet he named Khosla Ventures, Greylock, Mayfield, Kleiner Perkins, Upfront, Ribbit Capital, Redpoint, Lightspeed and Altimeter Capital as companies working to provide loans. At last he asked: “Any more?”
Wanted over the weekend too Henrique Dubugras, CEO of Brex, to raise a billion dollar bridge loan for affected startups. However, after the US authorities had announced a support package over the weekend, with which all customers should have access to their entire deposits on Monday, Dubugras withdrew. On Twitter he wrote that Brex’s emergency loan offer was no longer necessary and that it was a far better outcome for clients.
The fact that Altman, Khosla and others have not withdrawn should also reassure the startups. Because it is not yet entirely clear when exactly they will actually get their money back. In the USA, deposits are actually only protected up to 250,000 US dollars.
The exemption for the SVB is also said to apply to another bank, which US regulators announced on Sunday that it would be closed. Also the customers of the New York based Signature Bench should be fully compensated.