Startups that use Silicon Valley Bank are freaking out over payroll

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“He said that some had refused to report to work because they hadn&#x27;t been paid.”<p>And rightfully so. I am wondering if they will need to pay delayed salaries with an interest.

The company I work for only said our next payroll is safe. The rest of the statement was wordy without saying much which is a pretty big red flag to me. Here&#x27;s hoping we didn&#x27;t lose the entire extension round we just raised.

I have a very strict policy. No pay, no work. Only once in the past was it nearly invoked. We&#x27;ll see if this is the time.

&gt; SVB is the bank of choice for nearly half of all US venture-backed startups<p>Why? What did SVB provide that Citibank, JP Morgan, Wells Fargo, Bank of America, etc. not provide?

To paraphrase an old saying: When you owe your creditors $1M and can&#x27;t pay, you&#x27;re in deep shit. When you owe your creditors $1B and can&#x27;t pay, <i>they&#x27;re</i> in deep shit.

I don&#x27;t understand why people are blowing this out of proportion. SVB had $100 billion of securities that are now worth about 70-80 billion. That plus short term securities means they&#x27;ve got $100 billion liquid against $170 billion in deposits. So ~60% of deposits are coming on Monday.<p>They&#x27;ve got an additional ~70 billion in loans that are likely less liquid to fill the remaining 70 billion of deposits. It&#x27;s less certain how much these are worth but they&#x27;re at least worth something.<p>Net result is that depositors are losing 0-40% of their money. Much more likely that it&#x27;s 0-15%. Which sucks but it&#x27;s not going to kill an otherwise healthy company.

How do you know it’s a business insider article? It uses “freaking out” in the headline.

If, as others have stated throughout this thread, that startups typically couldn&#x27;t get bank accounts at regular big banks, where would they go now?

Read a stat only 2.7% of SVB’s deposits were under the $250k FDIC insurance threshold. Wasn’t sure if this was in $ or customer accounts terms.<p>If the latter, that’s a good predictor of the probability bank runs at other institutions.<p>When the VCs started advising their portfolio cos to pull out, it toppled the dominoes very fast. If SVB had a higher retail account mix, this probably would have been a slightly different outcome.<p>One report said depositors tried to pull out $45B before it went down. It would many HNI retail depositors doing a simultaneous withdrawal to trigger a failure. Not impossible, just much lower probability of that occurring.

If anyone has experience here: not paying wages is not the same as &quot;letting someone go&quot;, &quot;laying them off&quot;, or &quot;firing&quot; them, right? So if you have employment contract that has a signing bonus that needs to be returned if an employee willingly leaves within a time period but then the employee stops getting paid they can&#x27;t leave the job without being on the hook for that signing bonus, right?

At least once in a while, I feel better for not having a job.