ChatGPT boss reaches out to Silicon Valley bank's distressed tech company: no need to sign an IOU and pay it back when you have money

Tencent Technology News on March 13, this past weekend, many American technology industry executives and well-known venture capitalists reached out to those technology startups that were in trouble due to the collapse of Silicon Valley banks, including OpenAI CEO Sam Altman. They provide these companies with emergency funds to help pay employees and keep the companies running.

Silicon Valley Bank has long been known for focusing on tech startups and is the 16th largest bank in the United States. But on Friday, Silicon Valley Bank suddenly went bankrupt, becoming the second-largest U.S. bank to fail since the 2008 financial crisis. That has roiled global markets, hit bank stocks hard and left California's tech entrepreneurs worried about not being able to pay their employees.

To avoid what Y Combinator, CEO of startup accelerator Y Combinator, called a "potential extinction event in the tech industry," industry executives and venture capitalists moved quickly to do what they could to help save small businesses.

Altman runs one of Silicon Valley's hottest companies, OpenAI, which developed the chatbot ChatGPT that recently exploded. Altman's brother, Jack, confirmed on Twitter that he was helping other entrepreneurs out of his own pocket.

Doctoral Goulson, CEO of radiation startup Rad AI, admitted in an interview on Saturday: "I had no choice, so I emailed Altman. Soon, Altman gave a response, including offering six-figure funding. It was enough money to pay my salary, with no strings attached, and allowed me to pay it back. ”

Asked for comment on this, Altman said: "I remember getting help from investors when I started my business. I really need their help and I'm always trying to repay them. ”

Enrique Dubuglas, co-CEO of fintech startup Brex, announced an emergency credit line on Friday to help startups pay salaries. As of Saturday evening, Brex had received $1.5 billion in loan applications from nearly 1,000 companies, he said. "We're trying to sign lenders by tomorrow and everyone is working on that."

Even small startups are starting to take action to help others. Ariem Mavani, the founder of Streak, which has about 30 employees, said on Twitter on Friday that he was willing to lend his personal cash unconditionally to other small startups that can't pay employees. He then held discussions with several companies to prioritize loans for those living on wages. Mavani explains: "I'm also an entrepreneur and know how bad it can be if I don't pay my salary. ”

"Malfeasance or mismanagement"

As of late Saturday, more than 3,500 CEOs and founders representing about 220,000 employees signed a petition launched by Y Combinator calling directly on U.S. Treasury Secretary Janet Yellen and others to support savers, many of them small business owners, who risk not being able to pay their employees for the next 30 days.

The petition advocates "increased regulation and capital requirements for regional banks" and an investigation into any "malfeasance or mismanagement" by Silicon Valley bank executives. The petition warns that more than 100,000 jobs could be at risk. Silicon Valley Bank did not respond to a request for comment, and Y Combinator did not elaborate on the contents of the petition.

Venture capitalists advise startups to seek other avenues to access short-term liquidity. Some companies, including Lowercarbon Capital, lend to companies whose portfolios have money trapped in Silicon Valley bank accounts. Clay Dumas, a partner at the firm, said Lowercarbon would provide payroll support over the next two weeks and send the money out on Monday.

Khosla Ventures, a venture capital firm, also said: "Given the current challenging situation, we are in talks with more than 100 investment firms to assess their critical needs and plan to build bridges where we are the main investors." ”

"Lifeline"

Gurson, CEO of Rad AI, emailed Altman Saturday morning, hoping to find help in the desperate situation. He admits he hasn't been in contact with Altman in years, and that his company relies heavily on Silicon Valley Bank. The bank's sudden closure meant he had no money to pay his 65 employees on Monday. "Many people are completely dependent on us for their livelihoods, they have mortgages to repay and bills to pay," Goulson said. ”

Goulson said his startup partner waited 8 hours on the Federal Deposit Insurance Corporation (FDIC) hotline with no results. Multiple attempts to transfer money from Silicon Valley banks have failed. But Goulson saw Altman's post on Twitter, and the two met in 2014 while working on a Y Combinator campaign, when the latter was president of Y Combinator. Goulson said the two were not familiar with each other.

Speaking about Altman's generosity, Goulson said, "He was like building a lifeline for me. He conservatively estimates that Altman has provided more than $1 million in emergency funding to other startups with similar needs. He added: "The craziest thing is that he is not an investor in our company and has not asked for anything. ”

Altman did not give a specific amount on how much emergency funding he provided. But he said he didn't think his actions were too risky. "Even though Silicon Valley Bank couldn't find a buyer over the weekend and couldn't find a loan, it had a lot of start-up deposits," he said. At the same time, people are facing a real liquidity shortage, not their own fault, after all, employees need to be paid on time. (Golden Deer)