As reported by Bloomberg, Peter Thiel’s venture capital firm Founders Fund had withdrawn all of its funding from SVB.
Billionaire investor and founder of PayPal and Palantir is accused of sparking the SVB collapse after reports of him withdrawing millions of dollars from the bank and influencing businesses to withdraw their deposits.
Silicon Valley Bank was once the 16th largest lender in the country that helped startups to raise capital and deposit funds.
The bank scared the investors when it announced that it sold off treasuries at a loss, causing a run on the bank. Soon after, the customer withdrew $42 billion a day which caused the liquidity crisis followed by the shutting down of the bank.
Is it believed that SVB didn’t hedge its risk against rising interest rates that pushed deposited to withdraw money to get better returns elsewhere.
Theil venture firm Founders Fund pulled all of its funding from SVB, it also advised its list of portfolio companies to do the same by saying that there was no downside to moving their money out of the bank.
Theil is also a notable Republican donor which also makes him the prime suspect in sparking the fall of SVB.
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Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.