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Banks, entrepreneurs and VCs in the wake of SVB and Credit Suisse

We read some thought pieces over the last 24h which argued entrepreneurs should be able to risk manage their money application - basically choose better banks.  We have strong thoughts on this.

Author

Joao Martins
March 21, 2023

We read some thought pieces over the last 24h which argued entrepreneurs should be able to risk manage their money application - basically choose better banks.

We have strong thoughts on this.

  1. Bankers everywhere should absolutely be expected to understand and risk manage their money. The same way tech entrepreneurs need to understand their ecosystem and potential points of failure.

  2. Tech entrepreneurs should NOT be expected to be able to avoid exposure to financial collapses of institutions like SVB and Credit Suisse. Banks are regulated and scrutinised, which should ensure the stability of their businesses. When someone chooses to bank with a given institution, they are going into business with an APPROVED AND SANCTIONED body by all relevant authorities. We call them institutions, for Pete’s sake!

  3. Strategically, Venture Capital should bring this expertise to the table, with recommendations and relationships in the financial sphere, as well as lobbying for a better business banking industry. One more point in the smart money column.

Word.