Sam Altman, the CEO of OpenAI, and famous VC Vinod Khosla have appeared as the startups’ heroes after providing personal funding to firms who were about to experience SVB collapse.
The fate of the bank and the scope of this help are yet uncertain, despite the central reserve’s declaration on Monday that it would offer help by enabling depositors access to their money.
Altman admitted to TechCrunch that he is giving a “decent amount” of his own funds to help other startups. The loans, in his opinion, are primarily aimed at helping startups who “need to make payroll now” and that funds will become accessible within the next week.
Khosla has also provided startups with similar assistance. He posted to Twitter that he is giving Khosla Ventures portfolio firms private loans at cost of borrowing.
On Twitter, Altman and Khosla both urged venture capitalists to provide workers with money in case of emergency.
“Today is a good day to offer emergency cash to your startups that need it for payroll or whatever. no docs, no terms, just send money,” Altman tweeted, while Khosla said that large VC firms should step up, “especially those taking home millions in fees.”
Shernaz Daver, CMO of Khosla Ventures, stated via email that the company thinks that utilizing “LP capital” in this scenario is “inappropriate” and that VC firms shouldn’t really focus on earning money. Given that the scenario is fluid, Daver refused to provide information about the sum of money that Khosla has contributed.
For individuals who can’t put their own money into startups, it’s a more challenging choice. The conditions will need to be tougher if a venture capitalist spends money that was raised from LPs, for instance, as a result of the upside potential of that investment.
One venture capitalist reacted to Altman’s call to action saying that they are offering half of their last check, on a SAFE, with last round terms, using investors’ money.
Hemant Taneja of General Catalyst also offers what he refers to on Twitter as “very low interest loans” to portfolio firms to enable them in paying their staff.
In the meantime, HSBC has purchased Silicon Valley Bank’s Britain division (SVB). MP for South West Surrey Jeremy Hunt took to Twitter to confirm the development, “This morning, the Government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC.
Deposits will be protected, with no taxpayer support. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise.”
