Mark Cuban urged the Fed to buy Silicon Valley Bank debt

Mark Cuban wants the Fed to buy Silicon Valley Bank’s debt, immediately. Failure to do so, he believes, will shake confidence in the financial sector—and hurt tech startups and their employees.

On Friday, the bank failed after a bank run that saw investors and depositors trying to withdraw $42 billion on Thursday only. Many are now worried about what results will happen next week.

A widespread concern is that many technology businesses banked by SVB will not be able to pay their employees, starting next week.

Cuban Tweet on Friday night, “The Fed should immediately purchase all bank-owned securities/debt at near par, which is enough to cover most deposits.”

He shared the confession of a tech entrepreneur about the difficulties caused by the bank failure, increasing“This is what the Fed needs to think about.”

In that confession, Champ Bennett, cofounder of a small AI video creation startup called Capsule, Tweet: “This is a shame to reveal publicly, but I feel obliged to tell our story to overcome some misconceptions…30 days ago our small team celebrated the closing of a $5M fundraising that will enable us to bet on our future. Now we cannot access funds due to the closure of SVB. What will happen next is anyone’s guess, but it will not be good.

Cuban himself is a cofounder of a small video-based startup. That business,, was eventually acquired by Yahoo of $5.7 billion during the dot-com boom.

The tragedy of SVB’s failure, he Tweetso it’s “not the rich who are hit. It’s the thousands of companies that borrowed from the SVB and are required to keep their money in the SVB. Those entrepreneurs and their employees and vendors feel the pain. And they are the ones the Fed must protect.

The billionaire added, “And for the record I have no personal funds there, although many of my portfolio companies do. Probably all for about 8 to 10m dollars. So I can help them. But this other 200b and how many employees and vendors? I’m worried about them.”

The assets of SVB are now under the control of the Federal Deposit Insurance Corporation. Customers will have access to their insured deposits on Monday, said the agency, but FDIC insurance tops out at $250,000. Many startups save more than that in the bank.

The FDIC said it would pay uninsured depositors an “advance dividend within the next week,” but it was unclear what the amount would be and when it would arrive. If it’s too small, Cuban warned a Twitter Spaces on Friday night, there was a contagion effect.

Greg Martin, founding partner of investment firm Liquid Stock, Bloomberg said that in the worst case scenario next week, tens of thousands of workers will not be paid.

Former Treasury Secretary Larry Summers also participated. “There are dozens, if not hundreds, of startups that plan to use that money to meet their payroll next week,” he said to Bloomberg Television Wall Street Week. “If that doesn’t happen, the consequences will be very serious for our regeneration system.”

Elon Musk, for his part, indicated on Friday night that he is “open to the idea” of buy Silicon Valley Bank as he lays the foundation for Twitter payment.

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