"If the bank collapses then many startups shut down."
No, the equity gets wiped out, and if it's a good idea/good business it persists and gets funding elsewhere.
"You say it's a bunch of rich people profiting. Who are these rich people you're talking about? Bank management? They went to zero overnight. Shareholders? zero. Who's left? Garry Tan? He has the same incentives as millions of Americans whose retirement savings are parked in VC funds."
The VCs and other equity holders of the SVB depositors. Financial markets work: they could have sold their uninsured deposits at a discount, made payroll, with equity eating the loss.
No, the equity gets wiped out, and if it's a good idea/good business it persists and gets funding elsewhere.
"You say it's a bunch of rich people profiting. Who are these rich people you're talking about? Bank management? They went to zero overnight. Shareholders? zero. Who's left? Garry Tan? He has the same incentives as millions of Americans whose retirement savings are parked in VC funds."
The VCs and other equity holders of the SVB depositors. Financial markets work: they could have sold their uninsured deposits at a discount, made payroll, with equity eating the loss.