SVB is a start-up bank 10 years ago. It's niche grew during that period.But it was just SF and just

May 07, 2023
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SVB is a start-up bank 10 years ago. It's niche grew during that period.

But it was just SF and just tech, mostly. Those people were a circle of people (virally connected), so they talk and act together. (A broader, more disconnected 'society' rather than 'community' provides stability through disconnection/slow diffusion/disagreement.) Also younger, wealthier (contrast with the responses of older, poorer clientele.)

In 2021 deposits doubled (VC was under threat, putting money to side, more down rounds, less willingness to invest in new tech (which was also very overpriced), so they deposited this money instead). I wonder about examples of conversations that took place deciding what to do with that money and why? If the CEO decided to ignore the risk of rising rates (is it possible he didn't have access to knowledge that was a possibility?), what was he thinking was going to be a better attitude with their cash?

Future deposits would be even higher?

SVB invested (like 60% of their holdings) in longer term bonds to get 1 or 1.5%, which was more than 0 that they would have got from short term bills.

They had to sell in 2022 to raise cash, but this plan leaked (most virally connected depositor base) and there was a run (fast because done on their phones).
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<div>SVB is a start-up bank 10 years ago. It's niche grew during that period.</div><div><br>But it was just SF and just tech, mostly. Those people were a circle of people (virally connected), so they talk and act together. (A broader, more disconnected 'society' rather than 'community' provides stability through disconnection/slow diffusion/disagreement.) Also younger, wealthier (contrast with the responses of older, poorer clientele.) <br></div><div><br></div><div>In 2021 deposits doubled (VC was under threat, putting money to side, more down rounds, less willingness to invest in new tech (which was also very overpriced), so they deposited this money instead). I wonder about examples of conversations that took place deciding what to do with that money and why? If the CEO decided to ignore the risk of rising rates (is it possible he didn't have access to knowledge that was a possibility?), what was he thinking was going to be a better attitude with their cash?</div><div><br></div><div>Future deposits would be even higher? <br></div><div> </div><div>SVB invested (like 60% of their holdings) in longer term bonds to get 1 or 1.5%, which was more than 0 that they would have got from short term bills. <br></div><div><br></div><div>They had to sell in 2022 to raise cash, but this plan leaked (most virally connected depositor base) and there was a run (fast because done on their phones).</div><div><br></div><div> <br></div>
SVB is a start-up bank 10 years ago. It's niche grew during that period.

But it was just SF and just tech, mostly. Those people were a circle of people (virally connected), so they talk and act together. (A broader, more disconnected 'society' rather than 'community' provides stability through disconnection/slow diffusion/disagreement.) Also younger, wealthier (contrast with the responses of older, poorer clientele.)

In 2021 deposits doubled (VC was under threat, putting money to side, more down rounds, less willingness to invest in new tech (which was also very overpriced), so they deposited this money instead). I wonder about examples of conversations that took place deciding what to do with that money and why? If the CEO decided to ignore the risk of rising rates (is it possible he didn't have access to knowledge that was a possibility?), what was he thinking was going to be a better attitude with their cash?

Future deposits would be even higher?

SVB invested (like 60% of their holdings) in longer term bonds to get 1 or 1.5%, which was more than 0 that they would have got from short term bills.

They had to sell in 2022 to raise cash, but this plan leaked (most virally connected depositor base) and there was a run (fast because done on their phones).

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