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Unit Economics

Can we save SVB?

Is SVB cooked? Or can the startup community rally and together raise the funds needed to buy SVB rather than having it be sold piece by piece by the FDIC?

What would it take to buy it? If the VCs and founders deciding where $100B+ of deposits go decide to support SVB, perhaps not much. Buy the assets of the bank for $1. Raise $1B for working capital, with 80% of equity to investors and 20% to management. Restore confidence and do a bit of cleanup and then take it public again and it is worth $20-30B for a 20x return to investors within one year.

All the startups would get 100% of their deposits back quickly so they can make payroll for their 1M+ workers. And this important tech institution would be back serving their startups and VCs.

Raising $1B would take just $1k from each of the 1M+ employees who work for companies who bank at SVB. Or $10k from 100,000 people. Or $100k from 10k people. Or 1M from 1000 VC GPs.

So many people on social media have shown a lot of love for SVB in the last three days. Could all that love translate into enough fundraising to bring the bank back?

Are you in? http://savesvb.com


9 months ago

CEO, AppGal Labs @ Appgallabs


timing is also perfect before markets open. Question is now who picks up the bill cause clearly not taxpayers as per the article. Only thing that makes sense is that government becomes an investor. Which is fine because end of the day, their goal is GDP growth and support new ideas as in startups. Only risk is behind the scenes agenda that a Govt has to have, but could it affect the roadmaps for a startup, especially in fields like aerospace, military etc. But that is a long term concern or not truly maybe. I agree with this move by President Biden team. Collateral damage will be short positions that are locked in, who maybe thought startups are future so Govt will not intervene, like they did for automotive industry in 2008. But overall, I think status quo when the sun rises tomorrow. Full disclosure: I am simply observing and learning how markets are so interesting. I am not invested. My startup is just starting, so no issues. Great day!

9 months ago

CEO, AppGal Labs @ Appgallabs

speculation, next week probably 3 more banks will be in this precarious situation. I surely hope not. However in business you have to be objective and not emotional. Here is why. This is a not a technical glitch like what happened on Dec 24 at SouthWest and cost then $580 million to handle flight disruptions in one day when their avg cost per year for disruptions is $148 million. But in this case it is the economy. It is as far as I know is not any lack of performance for SVB. Just nature of economy as in interest rates. Which means it will also affect other banks as well. Not being pessimistic in the least. Just objective. Nasdaq will be an indicator when markets open tomorrow. My team thinks there will be a spike in investment for 2 weeks, but the goal of the retail investors or any, is extend the spread of the shorts in place. Nasdaq numbers will have more answers how to navigate this for startups. It will be fine in long term. Short term, just write it off as growing pains.

9 months ago

CEO, AppGal Labs @ Appgallabs

Still catching up cause was coding all day. I think the suggestion and numbers are sound. 1 billion is the ask to save SVB. I have to assume a percentage of startups affected do provide a value for their customers. Which means if the startup cannot service them, the customer loses whatever value as in ROI they are getting from the service. Would it be actually wise to have the customers build the 1 billion investment vs employees. The difference is subtle. 1k from an employee is sentiment. A customer affected could probably make a bigger contribution cause it affects their business and stop the cascading affect of this event. I am not truly sure how many startups affected actually serve paying customers and what is the value of that service. But just a thought.