And, yes, higher bank FDIC fees (which will be passed on to customers) constitutes a bailout. But I digress.
What I can’t wrap my head around is how stupid the venture capitalists who backed these startups were. I don’t expect someone running a small startup to realize there are ways to protect cash in excess of the $250,000 cap (I discussed avoiding the cap here). But I do expect the guy who gave you millions–his millions–to make damn sure the money doesn’t go missing. That they did not want to pay for (or know about) methods–pretty routine ones–to protect bank deposits over the $250,000 cap speaks to a lack of basic competency.
Yes, they might have been coders once upon a time, they have surfboards in their offices, and so on. But now they’re just investors, nothing more. And they couldn’t protect the fucking cash.
If one of their startup founders was taking home the cash each night in a giant garbage bag for safekeeping, I would like to think they would have a discussion with said founder. Leaving aside the question of whether the bailouts should have happened–which ultimately a question of who is getting bailed out (hint: it’s the investors, not the founders)–the investors were reckless and stupid. Definitely not masters of the universe.
Absolutely necessary update because this fucking made my head explode: In a story about the relief in Silicon Valley, this was reported:
Mr. Fonseka, the venture capital investor, predicted the weekend’s events would create a permanent change in the way start-ups managed their money. Some tech companies were even looking at building a tech product that helped businesses manage money across multiple bank accounts, he said.
IT ALREADY EXISTS YOU STUPID CRAPWEASELS. I swear it’s like giving hand grenades to drunk toddlers.
They think of themselves as the smartest people in the room… if they didn’t think to use better asset protection then clearly it must not exist, and now they can dig themselves out of this wholly undeserved avalanche of bad press by solving the problem for others and getting back in the good graces of people with money.
So many of the things going wrong these days (and undoubtedly through much of our history) is due to people like this, people resistant to the evidence of actual reality.
Raw ignorance is a hallmark of tech startup founders and venture capitalists.
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