Founders Fund—Founders Fund triggered Silicon Valley Bank run by advising portfolio companies to withdraw funds
In March 2023, Founders Fund's operations executives moved firm capital out of Silicon Valley Bank and advised portfolio companies to withdraw their deposits. This triggered a cascade of withdrawals that contributed to $42 billion being pulled from SVB in a single day, leading to the bank's collapse on March 10, 2023. The bank run caused widespread panic across the startup ecosystem and required FDIC intervention. Other venture capitalists criticized Founders Fund and Peter Thiel personally for sparking the run. While firms have a fiduciary duty to protect their investments, critics argued that the coordinated withdrawal advice was reckless and caused disproportionate harm to the broader financial ecosystem.
Scoring Impact
| Topic | Direction | Relevance | Contribution |
|---|---|---|---|
| Consumer Protection | -against | secondary | -0.50 |
| Corporate Governance | -against | primary | -1.00 |
| Overall incident score = | -0.858 | ||
Score = avg(topic contributions) × significance (critical ×2) × confidence (0.57)
Evidence (1 signal)
Axios reported Founders Fund operations executives moved capital and advised portfolio companies to withdraw from SVB
Axios reported the inside story of how Founders Fund's top operations executives quickly moved firm capital to bigger banks and spoke with portfolio companies about moving money out of Silicon Valley Bank. The fund came under withering criticism from other venture capitalists for sparking a bank run that led to $42 billion in withdrawals and SVB's collapse.