SVB Collapse: Sam Altman, Vinod Khosla emerge as knights in shining armour for startups

OpenAI chief executive Sam Altman along with storied venture capitalist Vinod Khosla have emerged as the knight in shining armours as they have extended personal capital to startups on the brink of SVB collapse.

Even though the federal reserve on Monday announced a relief by allowing depositors to access their money, the future of the bank and the extent of this support is still not fully known.

Altman confirmed to TechCrunch that he’s using a “decent amount” of personal capital to help startups out. He believes money will be freed up by next week and the loans are more to help startups that “need to make payroll now.”

Khosla too, has extended similar help to startups. He said on Twitter that he is offering personal loans at borrowing cost to companies in the Khosla Ventures portfolio.

Agree investors need to be value-add. We are talking to 100+ portfolio companies assessing their critical needs and plan to bridge where we are a lead or major investor at our cost of borrowing only or under special circumstances where a company’s other investors can't respond https://t.co/VqxG4KM111

— Vinod Khosla (@vkhosla) March 12, 2023

Altman and Khosla both also urged venture capitalists to offer emergency cash to employees, on Twitter.

“Today is a good day to offer emergency cash to your startups that need it for payroll or whatever. no docs, no terms, just send money,” Altman tweeted, while Khosla said that large VC firms should step up, “especially those taking home millions in fees.”

investors who ask "how can i be helpful": today is a good day to offer emergency cash to your startups that need it for payroll or whatever. no docs, no terms, just send money.

it's hard for me to imagine depositors actually losing money here, but so stressful in the meantime...

— Sam Altman (@sama) March 10, 2023

General Catalyst‘s Hemant Taneja is also helping portfolio companies make payroll with what he describes on Twitter as “very low interest loans.”

Great to see VC firms step up to help portfolio companies make payroll w/ very low interest loans. In addition to us at @generalcatalyst,@khoslaventures, @GreylockVC,@MayfieldFund,@kleinerperkins,@upfrontvc,@RibbitCapital, @Redpoint,@lightspeedvp, @altcap all doing same. Others?

— Hemant Taneja (@htaneja) March 12, 2023

Meanwhile, HSBC has bought the UK arm of Silicon Valley Bank (SVB). MP for South West Surrey Jeremy Hunt took to Twitter to confirm the development, "This morning, the Government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC. Deposits will be protected, with no taxpayer support. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise."

This morning, the Government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC

Deposits will be protected, with no taxpayer support

I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise

— Jeremy Hunt (@Jeremy_Hunt) March 13, 2023