On Thursday it is reported by an anonymous person that Peter Thiel’s Founders Fund had no funds with Silicon Valley Bank as of Thursday morning as the bank descended into chaos.
Founders Fund withdrew millions from SVB, said the person, who asked not to be recognized for sharing private reports. It merged other venture funds that took dramatic steps to limit exposure to the now-failed financial organization. Founders Fund also notified its portfolio firms that there was no downside to moving their money away from SVB, even if the threat was down.
Founders Fund functioned in further methods to move its business away from SVB. On Thursday, as the bank was beginning to unravel, the company began what’s known as a capital call. That’s a run-of-the-mill move in the venture capital world, in which a VC business asks its investors, or limited partners, to send it funds to make investments in startups. It started by asking those partners to move the funds to accounts at SVB, as it has done for years, the person said.
But the company realized that its inflexible partners were facing problems using SVB services as they attempted to move the funds, they weren’t instantly going through as predicted, the person said.
Quickly, Founders Fund asked its investors to transfer the funds to other banks rather. The fund operated to assure that startup funding deals that were slated to close in the future days were not delayed, the person said.
Today, the Founders Fund has no direction to SVB. The person did not tell if the company’s cash withdrawals occurred on Thursday, as the startup world was panicking about SVB’s financial position, or earlier.
Founders Fund went further than many other venture businesses, which maintained some money with Silicon Valley Bank to keep a relationship with the organization. This week, as terror turned into a bank run, some venture companies proposed that the tech industry had a moral imperative not to abandon SVB.
