[kelnos]

Fronting risky shit or not, on the whole, SVB's depositors would have been better off if every one of them had calmed down and done nothing right now. I would certainly understand if depositors would then build a measured plan to diversify their deposits over the next year or so, but while SVB certainly caused lack of faith, the reaction to that was what caused SVB to fail.

So ok, we've "punished" SVB's management's poor money-management practices, but in the process we've also punished a lot of companies who had millions of dollars but now only have $250k (with uncertain future access to some portion of the remainder).

Good job! Stick it to those SVB execs! Talk about cutting off your nose to spite your face... or I guess cutting off the noses of others...

[lolinder]

You're talking as though the SVB depositors are some sort of hive mind capable of acting in concert. They're not.

Each individual depositor has to make the bail/stay decision with extremely limited knowledge of what everyone else is going to do. They know that the market is freaking out at SVB's sale, and they know VCs are sending panicked emails to their startups telling them to bail. They know that if enough people actually do bail they may lose everything they have (in excess of $250k).

Presented with that information, the only rational move for a depositor is to bail. It's weird to blame the VCs for making the only good choice available to them.

[jen20]

While I agree that removing money from SVB if you could was A Good Idea, this:

> You're talking as though the SVB depositors are some sort of hive mind capable of acting in concert. They're not.

… is patently absurd. Startups and the VC market are all about meme copying, on everything from which front end stack or build system to use to how to write a “regretful” layoff announcement on LinkedIn, to (apparently) management of funds.

The boards are incestuous with respect to the ecosystem, and absolutely capable of acting in concert, as constantly demonstrated.

[lolinder]

> Acting in concert means knowing participation in a joint activity or parallel action towards a common goal

Memetic spread is not "acting in concert" in the way I meant it or in the way that OP was demanding. There is no common goal in the kinds of behaviors you're referencing.

[twelve40]

If you hold deposits at 4% and invest at 2%, that's simply not sustainable. The more I read about this, the more it looks to me they were simply going down no matter what. If everyone kept calm for a bit longer, what would have fundamentally changed?

PS. people didn't withdraw to spite anybody, this is not kindergarten. They started withdrawing because they don't want their small companies to die and need money for payroll, it's really the only sane thing to do.

[jgwil2]

Yep, it's the Prisoner's Dilemma. The rational decision for the collective is different from the rational decision for the individual.

[bostik]

What a strange game. The only move to win is to cheat.