>It's likely startups only exist to begin with due to low federal interest rates.
This is true for some startups. Not true for others. There’s some nuance. Painting them altogether loses the nuance.

> It is obvious that if those rates are low investors will look elsewhere. Startups are one of those elsewheres.

I agree.

> Now that rates are on the way up, there's no need for investors to risk their money on startups anymore. So startups no longer have one of the pre-conditions for their existence. Namely, free investor money literally pouring in and paying for all their expenses.

Again, some investors won’t spend as much of their money investing in startups. You talk as if it’s just a single on/off switch.
> Such is life in the free market. Looks like the US government disrupted you.

We’re talking about the startups here. The government “disrupted” the bank. And through no fault of their own, the startups get “disrupted” as a second order effect. My main point and the reason that I felt I should respond is this sense that I get from your comment that somehow startups deserved to lose their money because they kept it at the bank. As if that was the morally just conclusion.

> I thought stuff like this was going to happen the second I saw the Fed raising interest rates to combat inflation. Looks like time proved me right.

Yes. Everyone understood that “stuff like this” would happen. I’m positive that you didn’t know that specifically SVB would go under in such fashion. Without using hindsight bias, what should a startup have done with this knowledge that “stuff like this” would happen?

> Yeah sure. A "minor implementation detail" of the bank... Honestly, this isn't even the real issue at play here.

I said “internal” not “minor”. And I mean, yes it is the real issue at play? It’s what caused them to go under? And was absolutely not something that any reasonable person would expect to know about their financial institution…

> It's really simple to me. People put their money in the bank. The bank couldn't bear to watch the pile of money just sitting there. So it "invested" the money. Then it lost the money. Then they went under. Now everybody is losing their minds and the bank is getting liquidated in an attempt to make everybody whole again.

Missing nuance that they invested in something that is seen as about the most safe thing you can invest in, but they DID mess up with the duration. Again, this is something that the bank messed up that no reasonable(non-financial industry) person could have seen coming. Sure, the bank deserves some blame for this, but the people that kept their money there could not have reasonably seen the risk.

> I'm sorry but I just don't feel any sympathy at all. It's not the first time a bank fails but people never learn not to trust them.

“Don’t trust banks”. Ok. Got it. Now what? Without using hindsight bias, what should a startup have done with $10million? Keep it under their mattress? Invest it in something more risky than treasuries?

> Nope. I say the exact same thing every single time some bank-like institution fails: we warned you.

Noted. Now what?

> When it's some crypto exchange, everybody here on HN gets a kick out of it. Now that it's some startup's bank, I'm supposed to feel sorry for them? No.

You’re comparing losing your money by gambling on something with no intrinsic value, in an unregulated market, that was built primarily as a means of subverting oversight, with keeping your money in a highly respected, highly regulated, FDIC insured bank.

That said, I hope people weren’t HAPPY that crypto HOLDERS lost their money.