Serial entrepreneur and Venture capitalist Garry Tan has been in his new role as CEO of Y Combinator, one of tech’s most famous accelerator programs, for less than three months. And it looks like the integration process has been bumpy so far. Like pretty much every other corner of the startup world, YC has also been hit by the Silicon Valley Bank collapse: 30% of companies are exposed through SVB and may not be able to payroll, he tweeted on Saturday.
The investor called on Congress to act more decisively to save SVB after it was taken over by regulators on Friday. Tan wrote a petition to Secretary Janet Yellen, Chairman Martin J. Gruenberg, Chairman Sherrod Brown and Chairman Patrick McHenry asking for “relief and attention to immediate critical impact on small businesses, startups and their employees who are depositors in the bank “. The petition is signed by more than 600 CEOs and founders of companies such as Alloy Automation, Atoms, Flutterwave and Brex, whose CEO is currently trying to raise $1 billion this weekend to provide emergency loans.
“We are not asking for a bailout for the bank’s shareholders or its management; we ask you to save innovation in the American economy,” the petition reads.
The memo asks for two things: that small business depositors at the SVB be repaired through backstopping regulators, and that Congress reinstate “stricter regulatory oversight and capital requirements for regional banks, and any embezzlement or mismanagement by SVB leaders. leading to this failure should be investigated. YC is asking people to fill out a Google form ‘if you’d like to join us in pleading with the US government to take action that will help stop the layoffs of over 100,000 employees, prevent a future financial crisis and protect competitiveness of the United States in the world.”
The rapidly changing SVB situation caught a lot of people off guard, but early on Tan told YC Enterprises that “anytime you hear of solvency issues in a bank, and it can be judged credible, you need to take it seriously and put the interests of your startup first by not exposing yourself to more than $250,000 in exposure this year,” according to an internal screenshot seen by TechCrunch.
Twenty-four hours after saying that, Tan took to Twitter to say that “This is an extinction level event for startups and will set startups and innovation back 10 years or more. BIG TECH won’t care. They have money elsewhere. All the small startups, Google and Facebook of tomorrow, will die out if we don’t find a solution.
According to Tan’s memo on Saturday, it looks like he’s taking the first steps toward finding that solution.