[ENGNR]

Every depositor is getting $250k back immediately, surely that's enough to make payroll a few times over, factoring in other revenue they must have if their payroll is that large.

For the rest of it, they might take a 20% haircut at most. Even if they had no revenue, and that was say 10 months runway, then it's down to 8 months. It's not like people aren't going to get paid, there's plenty of notice there.

[toyg]

> $250k back immediately, surely that's enough to make payroll a few times over

I'm not sure I follow. A US 60k/Y job means the company has to pay 5k p/m (to employee and taxman). So a company-depositor getting 250k would be enough to serve 50 employees. "A few times over" would only be true for less than 25 employees. If we go Silicon-Valley level, where salaries seem to be twice as high (or more), those numbers would halve again. They seem very small numbers, most SMEs would not fit them.

[gizmo]

> They seem very small numbers, most SMEs would not fit them.

In the USA 78% of businesses have fewer than 10 employees. 89% percent have fewer than 20. The typical SMB has only a couple of employees.

When you include sole proprietors (like the typical etsy store) "the share of U.S. businesses with fewer than 20 workers increases to 98.0% and the share with fewer than 10 employees registers 96.0%".

Source: https://sbecouncil.org/about-us/facts-and-data/

[est31]

Yeah that is probably wrong but I think a notion of "omg all my money is gone" is also wrong. As long as the bank run is stopped in time, people with uninsured deposits would lose who didn't make it out of the bank in time will only a minority share instead of everything. That's what a bank run basically is, if you have 102$ in liabilities and 100$ in assets, and the FDIC steps in, everyone who holds 1$ at the bank gets 0.98$ out. Not bad. If 99$ exit the bank then the owners of the remaining 3$ only get 1$ out, a 66% loss.

The customers of SVB were quickly growing business in an industry where you can quickly obtain immensely high profit margins. A 20% cut is not the end of it.

I believe the big impact of this announcement is not the money itself, in fact it was the lowering in value of government bonds that caused the bankruptcy in the first place, so the govnernment effectively made money from the 10-year bonds deal they struck with SVB. Maybe in the end it might still be a profit for taxpayers/USD users overall. But this announcement still implies something for banks: they can do the dumbest decisions (like this failure for risk management), and the government will bail them out.

[op00to]

I'm amazed at how inexperienced the average hacker news commenter is with money.

[eppp]

I am amazed at how inexperienced the average banker is with interest rates.

[carlosjobim]

50 employees should cover most of startups.