Peter Thiel Says $50M of His Own Money Was Temporarily Frozen When SVB Failed
Firm founder Peter Thiel was not part of the conversation. One source says that the assumption was that they’d return the money to SVB after the crisis had ended….
Founders Fund wasn’t the only venture capital firm giving this sort of warning to portfolio companies, nor necessarily the first, but word of its advice spread like wildfire (it also ended up in media reports, including one from Axios). Almost immediately, the firm came under withering criticism from some other venture capitalists, accusing Founders Fund (and Thiel personally) of sparking a bank run that ultimately led to $42 billion in withdrawals. Some even speculated that it was intentional, as payback for some unknown grudge between the two groups.
Earlier this week the Washington Examiner chronicled some of that criticism:
“There should be more scrutiny of Peter Thiel and [hedge fund manager] Bill Ackman for yelling fire in a crowded theater in this SVB collapse,” tweeted CNBC host Sara Eisen [on Monday]. Others turned their focus to Thiel’s promotion and subsequent profiting off of crypto investments after the market crashed as a reason to be suspicious of his withdrawals. “You mean the guy who was touting crypto and trashing critics while he was selling crypto? That guy? Shocker!” tweeted tech journalist Kara Swisher.
But Peter Thiel says he actually left his own money in the bank, reports Business Insider:
“I had $50 million of my own money stuck in SVB,” he told the Financial Times…. Thiel told the Financial Times that he did not believe the SVB would fail last week.
Other venture capital firms — including Coatue Management, Union Square Ventures, and Founder Collective — had similarly advised startup clients to transfer money from SVB after the bank revealed a $1.8 billion loss and the bank’s share price collapsed. These firms have pushed back against accusations that they were spreading panic, saying that they were giving financial advice they believed would be in the best interest of their clients….
Thiel told the Financial Times that his account was frozen on Friday when regulators stepped in and took control of the bank. However, it is once again accessible after the US government stepped in earlier this week and shored up all customer deposits in SVB.
Read more of this story at Slashdot.