Y Combinator calls on Congress to act on SVB collapse


Serial entrepreneur and venture capitalist Garry Tan is less than three months into his new job as the CEO of Y Combinator, one of the most famed accelerator programs in tech. And it seems like it’s been an eventful onboarding process thus far. Along with pretty much every other corner of the startup world, YC was also affected by Silicon Valley Bank’s collapse: 30% of companies are exposed through SVB and are at risk of not being able to make payroll, he tweeted Saturday.

The investor called on Congress to act more decisively to save SVB after it was taken over by regulators on Friday. Tan wrote a petition to Secretary Janet Yellen, Chairman Martin J. Gruenberg, Chairman Sherrod Brown and Chairman Patrick McHenry asking “for relief and attention to an immediate critical impact on small businesses, startups, and their employees who are depositors at the bank.” The petition is signed by over 600 CEOs and founders from companies including Alloy Automation, Atoms, Flutterwave and Brex, whose CEO is currently trying to raise $1 billion over the weekend to provide emergency credit loans.

“We are not asking for a bailout for the bank equity holders or its management; we are asking you to save innovation in the American economy,” the petition reads.

The memo asks two things: that small-business depositors at SVB will be made whole through regulators conducting a back stop, and that Congress restores “stronger regulatory oversight and capital requirements for regional banks, and any malfeasance or mismanagement on the part of SVB executives leading to this failure should be investigated.” YC asks people to fill out a Google form “if you’d like to join us imploring the US government to take action that will help stop the layoffs of 100,000+ employees, prevent a future financial crisis, and protect US competitiveness in the world.”

The rapid unfolding of the SVB situation has caught many off guard, but early on, Tan told YC companies that “anytime you hear problems of solvency at a bank, and it can be deemed credible, you should take it seriously and prioritize the interests of your startup by not exposing yourself to more than $250,000 of exposure this year,” according to an internal screenshot seen by TechCrunch.

Twenty-four hours after he said that, Tan took to Twitter to say that “this is an extinction level event for startups and will set startups and innovation back by 10 years or more. BIG TECH will not care about this. They have cash elsewhere. All little startups, tomorrow’s Google and Facebooks, will be extinguished if we don’t find a fix.”

According to Tan’s memo on Saturday, it looks like he’s taking the first steps to find that fix.

Read more about SVB's 2023 collapse on TechCrunch

#Combinator #calls #Congress #act #SVB #collapse


Related Posts

Marvel’s Blade Movie Delayed by Writer’s Strike

[ad_1] Marvel’s vampire hunter Blade is a fierce warrior but he may have finally met his match: labor unions. The upcoming, long-in-development reboot of the Marvel franchise…

How to Watch the Coronation of King Charles III Live

[ad_1] King Charles III officially shed his princedom when Queen Elizabeth II died, and the British royal’s new position will be formalized on May 6 in a coronation…

‘Quordle’ today: See each ‘Quordle’ answer and hints for May 6

[ad_1] If Quordle is a little too challenging today, you’ve come to the right place for hints. There aren’t just hints here, but the whole Quordle solution….

How to use a passkey instead of a password to sign into your Google account

[ad_1] Passwords have always been a necessary evil, giving you the choice of either using one that is too simple (so you can easily remember it) or…

Amazon quietly acquired audio content discovery engine Snackable AI to boost its podcast projects

[ad_1] Amazon quietly acquired New York-based audio content discovery engine Snackable AI last December to boost its podcast features, as first reported by New York Post. The…

Warhammer 40K’s New Tyranid Screamer-Killer Is a Great Update

[ad_1] A new edition of Warhammer 40K means new models—and for some of the 40-year-old wargaming franchise’s creatures and characters, that means updates they’ve not had in…

Leave a Reply

Your email address will not be published. Required fields are marked *