When I started work on this piece, I was writing about Silvergate bank, one of the only banks willing to do business with “digital asset companies.” Silvergate, an institution that had been around for nearly 30 years, imploded in what seemed an instant, going from $4 billion in deposits at the end of 2022
Right on, but I have to disagree with your last sentence on VC's self-image. Venture, and Founder, ideology is grounded, above all, in a sense of having earned it. If they act aggrieved, it’s because they perceive the less deserving as not understanding how special they are.
That they deserve their privileged position is a truth that is baked into every new analyst, founder, and elite MBA graduate's brain. What you’ve described as acting like a forgotten part of society is contempt. It’s contempt for all the less-deserving people who don’t understand why this class of people gets treated as they do.
In one of my previous jobs, I had a number of VC funded start ups contact me, many were former tech people who were in start ups that focused around things like hard goods, electronics, apparel etc. and I was always amazed at how much they always would focus on how they have been able to raise so much money, but whenever I would ask on very basic business fundamentals, around things like production go to market plans and sourcing, or consumption for raw materials forecasts almost none of these people or companies could ever give answers, most had no real production plans but rather to just build hype on top of this, so many would respond poorly to not getting exactly what they wanted when they wanted it, demonstrating just a complete lack of understanding on how producing real items work, I always found it incredible that despite such basics within a plan that so many of these groups were able to get so much money invested in them to just play around with. Something here has to change
> People are not angry at tech - they are angry about how “the tech industry” has become entirely subordinate to venture capital at the expense of everything else — from worker’s rights to tax justice, the environment, and economic stability.
While I want to agree with this statement, I don't think it is correct. Instead, most of the larger public has adopted the growth for all things mental model. It's expected stock market must constantly be growing. Property values must continually be growing. Everything other than gas prices is expected to grow forever.
Would hurting all of these people, the hi-tech employees, the start-up founders - be worse than what Jerome Powell is probably going to do to hundreds of companies and their employees, to "slow down an overheated economy"?
It looked from afar like a god-given opportunity to slow the economy by picking on people most likely to have a good job in a year, whatever happens, most likely to not miss any meals from their losses.
Powell's traditional way seems more likely to hit the blue-collar levels that work in construction, hospitality. It's hard not to see priorities-in-action, with this.
When the government re-regulates banks, banking infrastructure might regain credibility. Until then, I expect a rollercoaster ride of peeling back the banking curtains of BofA, WF, Citi, etc.
Also, while there was an absolutely ridiculous amount of journalists writing about how SVB was some sort of comeuppance for tech bros, you seem to be the only one to mention that VCs, SPACs, IPOs, etc. have encouraged startups to operate at losses, overvaluing them with a goal of creating monopolies to fundamentally change how capitalism is supposed to work.
Maybe, the banking sector will crash because it’s the truest tenant of capitalism - you can’t operate with a loss for very long and survive - and this will cause us to re-regulate not just banking but every sector of our “free market system?” Unlikely but I can hope.
If there's one thing we've learned this week, it's that you should not start the name of your bank with the letters "S" and "i" ---> "Solvency issues"
Your buddy paid 44B's for what's basically a non-profit. A huge transfer of wealth to others.
I get it, he fired some folks. But if you get the blinders off, he's probably on your side.
This headline is.....beautiful
Hey Ed you have Ken Klippenstein identified as "Kevin Klippenstein," just a heads up.
What I have not seen is an explanation of how the negative $958 million cash balance as of COB on Thursday last will be taken care of. Does anyone know?
Hear hear. Thanks for this and I love the title :)
I’m begrudgingly giving you a Like for the title
Strenuously disagree about the innocence of tech workers, unless you mean ppl who have no choice and may not even earn a living wage working for tech companies. They have choices. If they have enough brains to earn even lowest 6 figures in tech, they have the brains to spot a speculative and unprofitable company’s job offer. They have the brains to question whether this is just an entity created to burn investor cash and pay a company’s employees for a few years before the gig is up.