E119: Silicon Valley Bank implodes: startup extinction event, contagion risk, culpability, and more

**David Sacks** (0:00)
Hey guys, I got a little friend here.

**Chamath Palihapitiya** (0:02)
What?

**David Sacks** (0:03)
Yeah, I think I'm going to start a new podcast.

**Chamath Palihapitiya** (0:06)
Is that a bulldog?

**David Sacks** (0:07)
And I'm going to have a bulldog as my mascot.

**Chamath Palihapitiya** (0:10)
You bought a bulldog?

**Jason Calacanis** (0:12)
Oh my God, you got my mascot.

**David Sacks** (0:14)
Yeah, I took over your mascot.

**Jason Calacanis** (0:16)
Well, look at that. Now you're actually likable, Sacks. Sacks, are you trying to improve your image?
Yeah, I was about to say, Sacks is so unlikable that he has gotten a bulldog.

**Chamath Palihapitiya** (0:26)
Oh my God, Sacks, show me his face again.

**David Sacks** (0:27)
Who should you go bulldog?

**Chamath Palihapitiya** (0:28)
Is it him or her?

**Jason Calacanis** (0:29)
Him.

**Chamath Palihapitiya** (0:30)
What's his name?

**David Sacks** (0:31)
His name is Moose.

**Chamath Palihapitiya** (0:32)
Oh my God.

**Jason Calacanis** (0:34)
Oh my God, you got a bulldog.

**David Sacks** (0:36)
It's me and my mascot, Jacob. I'm going solo with my podcast. I'm going to call it This Week in Technology.

**Jason Calacanis** (0:40)
It already exists. Please don't start any more trademark lawsuits. All right, everybody, it's an emergency podcast.
Silicon Valley Bank has been taken over by the FDIC.

**Chamath Palihapitiya** (0:52)
Sorry, is this the Twist livestream? Am I on the Twist livestream?

**Jason Calacanis** (0:55)
I mean, guys, if you couldn't just interrupt me while I'm never going to get through this. This is a lot to get through. The world needs to hear our opinions. If you care about us, click like and subscribe.

**Chamath Palihapitiya** (1:04)
If you guys hit the like and subscribe button below.

**Jason Calacanis** (1:06)
Make sure you search for This Week in Startups and write a review.

**Chamath Palihapitiya** (1:10)
Write hello in the comments.

**Jason Calacanis** (1:11)
If you don't get enough J-Cal, you can get me four more times a week.
The name of the other podcast is This Week in Startups. Thanks for the free promo, guys. It is a huge day today in Silicon Valley. We haven't seen a Black Swan like event happen here in a long time since 2008

**Chamath Palihapitiya** (1:27)
I thought the last time was when you published the book Angel.

**Jason Calacanis** (1:30)
Oh, God.

**Chamath Palihapitiya** (1:32)
We have to get to work.

**Jason Calacanis** (1:34)
Chamath, save the jokes.

**Chamath Palihapitiya** (1:36)
I'm trying to give you a cold open. We did that already.

**Jason Calacanis** (1:39)
Three, two.
Okay, everybody. It's been a while. 36 hours here. We're going to get into Silicon Valley Bank imploding. The FDIC has shut down Silicon Valley Bank, and there's many different things we have to discuss with me today. As always, the dictator himself, Chamath Palihapitiya, the Rain Man, David Sacks, and the Prince of Panic Attacks No More, his wires cleared, David Friedberg, the Sultan of Science. Welcome, boys. How is everybody, just to start this off, contextually, the last 24 hours, can you recall a time in our careers where it's felt this acute or insane or intense?
2008 and COVID.
I think that this is right up there, could be two, probably three, in terms of the level of panic and concern. The problem is we're in the middle of it. We don't know what's going to happen this weekend, so there's a lot of anxiety right now, a lot of panic going on. Unlike COVID and 08, really acute effects that many companies and investors are actively dealing with right now, like not just a few, thousands of companies that are really in a state of distress right now. It is potentially from a Silicon Valley perspective, worse than 8 or COVID.

**David Sacks** (3:12)
For sure. This is basically a Lehman sized event for Silicon Valley. Remember when Lehman Brothers went out, basically filed for bankruptcy in 2008, started the whole financial crisis.
The federal authorities thought that the best plan for Lehman was to file for bankruptcy. They didn't try to save it. And that basically led to a cascade where the whole financial system almost collapsed. I think that SVB, this is a Lehman sized event for Silicon Valley. And there's two big things happening. One is the impact on the startup ecosystem. So you're seeing probably thousands of companies now cannot make payroll in the next few weeks because their money is trapped and tied up at Silicon Valley Bank, which is now under receivership. So if you wired your money out yesterday, you're good. And a lot of people managed to do that. But there are a lot of people who had wires in the hopper, didn't make it today, logged into the website, can't log in, their money is just frozen.