A serial entrepreneur and Venture capitalist Gary Tan has been less than three months into his new job as CEO of Y Combinator, one of the most prominent accelerator programs in tech. And it looks like a very fun onboarding process so far. Along with the entire startup world, YC was also affected by the collapse of Silicon Valley Bank: 30% of companies were exposed to SVB and were at risk of not being able to pay salaries. he tweeted on Saturday..
The investor called on Congress to take more decisive action to save SVB after it was taken over by regulators on Friday. Tan to Secretary Janet Allen, to Chairman Martin J. Grunberg, in a petition to Chairman Sherrod Brown and Chairman Patrick McHenry, called for “immediate critical impact relief and attention to small businesses, startups, and bank depositors.” The petition has been signed by more than 600 CEOs and founders, including Alloy Automation, Atoms, Flutterwave and Brax, and the CEO is currently trying to secure a $1 billion disaster loan over the weekend.
“We are not asking for a bailout for the bank’s equity owners or management. We are asking you to save innovation in the American economy,” the petition reads.
The memo calls for two things: that small business deposits in the SVB be fully processed by regulators through a backstop, and that Congress “reintroduce stronger regulatory oversight and capital requirements for regional banks, and any corruption or mismanagement by SVB executives that led to this failure must be investigated.” YC is asking people to fill out a Google form “If you want to join us in demanding action to stop the layoffs of 100,000+ workers, prevent a future financial crisis, and preserve America’s global competitiveness.”
The rapidity of SVB’s situation has many concerned, but Tan previously told YC Firms: “Anytime you hear of solvency problems in a bank that is considered credible, you have to take it seriously and prioritize the benefits.” By not exposing your startup to more than $250,000 this year,” an internal script seen by TechCrunch shows.
Twenty-four hours after he said this. Tan took to Twitter to say this “This is an extinction-level event for startups and sets startups and innovation back by 10 years or more. Big Tech doesn’t care about this. They have money elsewhere. All the little startups, the Googles and Facebooks of tomorrow, will disappear if we don’t get a solution.”
According to Tan’s memo on Saturday, he appears to be taking the first steps toward getting that fix.