Post by rojonirabeya1 on Mar 4, 2024 6:42:56 GMT
As the dust settled from Silicon Valley Bank's bankruptcy , Aaron Emigh began hearing horror stories . A businessman friend told the co-founder and CEO of smart device startup Brilliant that his venture capital investors suggested a pay cut to the executive team and widespread layoffs given the possibility of not having access to all the cash they had at SVB. . When the Federal Deposit Insurance Corporation (FDIC) announced that depositors would be compensated, the founder in question had already announced the decision to cut the pay of his team, which led to infighting within of the startup. Another founder told Emigh that his investor had asked him for a list of staff cuts so he could act before the weekend. And others mentioned the supposed "good or bad" lists of investors , which indicated the companies that would be offered bridge financing to save lives and those that would not.
Although several investors stepped forward after SVB's bankruptcy to offer loans to its portfolio companies or lobby regulators to bail out depositors, the event served as a wake-up call about the funds' intentions. venture capital to look after the interests of their startups. "There are certain people I wouldn't want to take money from right now," Sami Khan, co-founder and CEO of mobile gaming company Atlas Reality, told Business Insider . "Herd mentality" Some were Asia Phone Number List surprised by the helpful responses some investors gave. Harold Hughes, founder and CEO of Bandwagon, a blockchain-based fan club and ticket authenticity startup, heard from several angel investors . But only Unseen Capital, one of his venture capital funds, offered to give him financing to pay his salaries. Overall, 54% of founders received financial advice and guidance from their investors during the SVB crisis, and only 5% received direct financial help to cover payroll and other operating expenses.
According to the Founder Sentiment Report from NFX, which interviewed 870 founders after regulators ruled on deposits . And others, amid the chaos, received conflicting advice from investors . "One investor told us to stay calm, but they took out all their money , and that's when I hit the panic button," says Brett Hellman, founder of employee rewards startup Matter. "If they were willing to move that much money, I thought I should probably do the same." Founders like Scott Kitun, co-founder of music creation platform Songfinch, witnessed how venture capital firms—following the lead of well-known funds like Peter Thiel's Founders Fund, Union Square Ventures, and Coatue — advised their portfolio companies to They will withdraw their capital from SVB as soon as possible. For founders and venture capital firms alike, the snowball effect revealed a destructive “herd mentality” within the sector . “At the end of the day, this isn't entirely SVB's fault,” says Logan Allin, managing partner and founder of Fin Capital.
Although several investors stepped forward after SVB's bankruptcy to offer loans to its portfolio companies or lobby regulators to bail out depositors, the event served as a wake-up call about the funds' intentions. venture capital to look after the interests of their startups. "There are certain people I wouldn't want to take money from right now," Sami Khan, co-founder and CEO of mobile gaming company Atlas Reality, told Business Insider . "Herd mentality" Some were Asia Phone Number List surprised by the helpful responses some investors gave. Harold Hughes, founder and CEO of Bandwagon, a blockchain-based fan club and ticket authenticity startup, heard from several angel investors . But only Unseen Capital, one of his venture capital funds, offered to give him financing to pay his salaries. Overall, 54% of founders received financial advice and guidance from their investors during the SVB crisis, and only 5% received direct financial help to cover payroll and other operating expenses.
According to the Founder Sentiment Report from NFX, which interviewed 870 founders after regulators ruled on deposits . And others, amid the chaos, received conflicting advice from investors . "One investor told us to stay calm, but they took out all their money , and that's when I hit the panic button," says Brett Hellman, founder of employee rewards startup Matter. "If they were willing to move that much money, I thought I should probably do the same." Founders like Scott Kitun, co-founder of music creation platform Songfinch, witnessed how venture capital firms—following the lead of well-known funds like Peter Thiel's Founders Fund, Union Square Ventures, and Coatue — advised their portfolio companies to They will withdraw their capital from SVB as soon as possible. For founders and venture capital firms alike, the snowball effect revealed a destructive “herd mentality” within the sector . “At the end of the day, this isn't entirely SVB's fault,” says Logan Allin, managing partner and founder of Fin Capital.