Venture Capital Bros believe they saved the economy with tweets

Some venture capitalists on Twitter are convinced they bailed out the US economy after this weekend’s Silicon Valley Bank (SVB) collapse.

Others, however, believe their frantic tweets and claims may have helped spark SVB’s initial rush and contributed to its collapse.

On Friday, SVB, which supplies many high-profile tech companies, saw banks rush after announcing they were short on capital and needed to raise $1.75 billion. After many of its wealthy customers withdrew their money, the $200 billion company went bust.

Although many had warned of such a scenario over the past five years – including Sen. Bernie Sanders (I-Vt.), who argued in 2018 that banking sector deregulation would ultimately lead to disaster – venture capitalists only began sounding the alarm this weekend quickly trusted themselves to have both predicted the current unfortunate situation and saved the financial system.

Confident Angel Investor and Elon Musk Jason Calacanis, best known for vigorously defending Musk on Twitter, sought to credit the US Treasury Department’s decision to indemnify all of the bank’s customers, despite initially implying that it was a financial one Armageddon was almost certain.

When regulators entered the bank on Thursday, March 9, Calacanis dubbed the event “Defcon 1.”

On Friday night, Calacanis issued an all-caps alert, predicting financial doom.


He also predicted, again in capital letters, that a massive nationwide backlash would be imminent and that most people would not be able to get their money.

A number of people claimed the internet screaming was not conducive to an already panicked environment.

Before the U.S. government’s announcement that all supplies would be available, Calacanis breathlessly asked his supporters if they would also buy “arms, supplies, and gas.”

Calacanis also tweeted videos of people queuing at banks over the weekend.

After the SVB collapsed, the government stepped in to ensure that all the money in the bank, not just the FDIC-insured deposits, was covered.

Calacanis then patted himself on the back and declared his “work here is done”.

Another venture capitalist, David Sacks, who co-hosts a startup podcast alongside Calacanis, also posted fervent SVB tweets that went viral.

Sacks insisted that unless the government steps in, the entire Treasury Department is at risk.

“The Fed has to endure the situation,” Sacks wrote. “Announce that all deposits are secure. End the Crisis. It will cost very little, if anything, as the SVB actually has enough assets to pay out depositors. The cost to the banking system and economy will be far greater if they underreact.”

He also called it a potential extinction event for startups.

The pair were widely ridiculed outside their circle of supporters after the government intervened and quickly stabilized the SVB.

“This weekend was an opportunity for people to learn that @Jason and @DavidSacks are crazy,” wrote an investor named Austin Lieberman. “At best they panicked and at worst they deliberately tried to spread [Fear, uncertainty, and doubt]. Either way, your sanity and $$ are better off without their nonsense on your feed.”

In response, Calacanis tried again to suggest that he somehow influenced the government and the Federal Reserve’s decision.

“My intention was to highlight the issues I saw on Twitter 12 hours before the outbreak,” he wrote. “I have no shares in any bank and no exposure to the affected bank (some of my portfolio companies did). I’m glad that’s over, my work here is done!”

Lieberman, however, seemed unwilling to let the issue slide.

“They literally had 0 leverage on the Fed,” Lieberman added. “The only thing you might have done was scare tech twitter to death and possibly incited the beginnings of a bank run. Real Question: Did you make loans to companies this weekend and if so, on what terms?

Calacanis said he’s had initial discussions about company financing.

Nonetheless, the couple’s supporters continued to praise and credit them for helping avert further financial chaos.

“Plot Twist: @Jason and @DavidSacks saw the impending doom and rushed to a public platform to voice concerns and ensure our government officials saw the second and third order implications,” wrote another Twitter user. “You and other VCs could have saved us all.”

Many made memes praising Calacanis for his efforts, which he retweeted.

But with more praise came more condemnation and ridicule. One user even jokingly claimed to work for the Treasury before praising the duo’s tweets and podcast.

“I work at the Treasury Department and we’ve been waiting for their emergency pod to fall so we can get instructions on next steps,” said @JoeBenjamin_ sarcastically. “President Biden asked me to print out Jason’s tweets and read them aloud. The shouting was uncomfortable, but the President was convinced!”

Another user summed up the whole incident more succinctly: “Lighting a match in a room full of gas and then claiming you used the ensuing fire to signal the fire department where to go.”

The problem so far has led not only to the collapse of the SVB, but also to the federal government closing the Signature Bank of New York to protect depositors.

While much of the financial community seems pleased with the decisions, most Americans remain opposed to the bailouts of irresponsible banks and big business.


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Jaclyn Diaz

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