Why did Thiel’s Founders Fund withdraw millions of money exactly before the collapse of Silicon Valley Bank?

To have the second and the third largest bank failures in US history happening within three days of each other shows a big turmoil and it should not only make you raise eyebrows but also make your head spin.

And what should make you raise your eyebrows further and make not only your head spin but have yourself spin round and round too are two curious instances which have to do with the Silicon Valley Bank collapse. In this piece I will be dealing with the first instance.

The first is the fact that as Bloomberg reported “Peter Thiel’s Founders Fund had no money with Silicon Valley Bank as of Thursday morning as the bank descended into chaos according to a person familiar with the matter.”

The person who preferred to remain anonimous stated that Founders Fund withdrew millions from SVB. In order to reduce exposure to the now-failed financial institution it joined other venture funds in taking drastic measures. Additionally even though the risk was low Founders Fund told its portfolio companies that there was no downside to taking their money out of SVB.

As the bank started to fall apart Founders Fund “coincidentally” took other measures. First the company launched a capital call which is a standard procedure in the venture capital industry for a VC firm to ask its limited partners or investors for money so it can invest in startups which is what most VC firms do on a daily basis. According to the source it started by asking those backers to transfer the money to SVB accounts as it has done for years.

However according to this insider as the limited partners attempted to transfer the funds the company discovered that they were having trouble using SVB services since they weren’t immediately going through as expected. So Founders Fund quickly requested that its investors transfer the funds to alternative banks. According to the source the fund took action to prevent delays in startup funding transactions that were expected to close soon.
Today Founders Fund has no exposure to SVB. The person did not say if the firm’s cash withdrawals happened on Thursday 9th March a day before the bank’s collapse as the startup world was panicking about SVB’s financial position or earlier.

The questions that we should be asking here are various. Was Peter Thiel telling the companies he worked with to withdraw their funds on Thursday because it was the right move since it would be his fiduciary responsibility to do so? Or was Thursday already too late to withdraw the money and since he and his companies do not have exposure it means that he knew? Or was there some insider information? Or did he play a role in creating this? Did he have inside knowledge about a pending bank collapse before anyone else did? Should he have warned others if this was the case? Or did he have the right to withdraw money from a bank while telling others to do the same?

Did he knew beforehand about the collapse of the Silicon Valley bank? Was this a “coincidence”? Was the Silicon Bank collapse pre-planned and fabricated in a way to happen?

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