Everything Is Crashing – What I Am Doing

Silicon Valley Bank crushed other banks are crashing can we trust the system what we're going to do with our money what if everything crashes what we're going to do should we bet everything on bitcoin oh and I'm recording this video in the middle of the storm it is Storm number three in the past two weeks and we've been without power for over four days and no internet for four days welcome to 2023 in Silicon Valley today we're going to talk about what's going on in the US and in Silicon Valley in particular two weeks ago you guys were actively asking me to comment on what was going on with Silicon Valley Bank the channel is Silicon Valley Girl and I live here and actually Silicon Valley Bank was the bank that we were using for lingua trip so today I'm gonna tell you uh our story with that bank and I'm gonna tell you what I've learned from investors and other entrepreneurs about what they were going to do with their money and I will also share my action plan now let me start with a story we came to the us back in 2015 from Russia having no Social Security numbers or no tax identification numbers in the US and we came here with almost zero money I had around two thousand dollars on my bank account which wasn't enough to even pay for rent our first apartment was twenty six hundred dollars so because of that we really really hope that we would get those 100 000 that we got as an offer from 500 startups sooner rather than later because we needed to pay for rent we needed money to survive here but the condition to get those funds was to start a bank account in the US which we couldn't really do without the tax number until a Silicon Valley Bank representative came to our office at 500 startups and she said that Silicon Valley Bank runs a special program for startups with International Founders and they would open a bank account for us in a matter of days which basically saved us we were so so happy so they helped us with the whole process and I was amazed how easy it is to make a wire from the US compared to Russia because in Russia we have this currency control thing you have to provide a lot of documents if you're sending money abroad so I was extremely happy with the bank and I saw a lot of other startups using it so I had no doubts about our choice and we had all of our money there until in 2016 I asked them like guys are marketing expenses are growing I would really love to use a credit card that gives you miles for those marketing expenses and they told me they didn't have this option so we started exploring I started talking to people and people started recommending the Chase Bank because they have this Chase business Inc card that lets you get Triple points if you spend on marketing and again our marketing expenses exploded as well as our revenue and what started happening in 2017-2018 we started processing so many payments that Braintree blocked us and then Silicon Valley Bank started asking a lot of compliance questions because they're like how is the startup able to grow so fast in a matter of months the thing is our business is highly seasonal so people start booking their trips in March and April and this is when our Revenue explodes and then it slows down again and that was before we introduced online courses now it's uh pretty much stable and so because we had some issues with customer support it took them a while to review our accounts after blockage we decided that we need a second bank account and this is how we started our Chase bank account and now when you see my videos when we fly Emirates business class with the whole family 16-hour flight from Dubai to San Francisco for 700 that's because we have a Chase card because we use it for business expenses and as a business we spend a lot of money and this way we're able to sponsor business class trips and I consulted with my CPA and please don't take this advice because I'm not a CPM not a professional but the IRS doesn't tax you on Miles earned so if you get them as a gift from a bank that's another story but if you earn them by spending cash then there is no tax so basically perfect situation in Chase we got an amazing manager who we started hanging out with so we and ended up moving all of our money to Chase bank and on the day when Silicon Valley Bank collapsed I think we had like 20 dollars there and what's also interesting about Silicon Valley Bank is that they had this program where if you raised money as a startup they would I think it was don't quote me on that but I think they provided 50 of that amount as a loan which was amazing for a lot of Founders here imagine the average round is like 15 million and then you get 7.5 from a bank as a loan nobody did that and that's why they were the Silicon Valley Bank I think everyone I know had an account there so basically what happened in 2019 2020 2021 people here raised insane amounts of money a lot of money was poured into startups and so Silicon Valley Bank had around 60 billion as deposits in 2019 by the end of 2021 they had 190 billion in deposits but in 2022 the economy started slowing down Silicon Valley Investments started slowing down so those startups started withdrawing their money because they needed to support their businesses and Silicon Valley Bank as a bank needs to invest money in order to generate revenue and some of those funds were invested in long-term treasuries that paid smaller interest based on the interest rate back then now the interest rate has grown to five percent and so what basically happened let me explain in simpler terms uh you give me 2 000 bucks and I'm like okay perfect let me buy a camera and rent it out to other creators make videos so it brings some cash flow because otherwise if I just put the money in my pocket it loses value due to the inflation so I started investing it but then you suddenly come back and say Marina I need those two thousand dollars I'm like okay where do I get them I need to sell the camera and I listed on eBay and it turns out people don't really need this camera anymore because there are fancier cameras on the market for two thousand dollars and my camera is now only worth fifteen hundred dollars so I sell it at a loss because I'm forced to return money this is basically what happened with Silicon Valley Bank they were forced to sell those Securities because they needed liquidity but they were forced to sell them at a loss and they sold them at 1.9 billion loss what happened the stock went down people started panicking and what happened in Silicon Valley a lot of people texted each other like oh just a friendly advice maybe you should get a bank account somewhere else and when you get this kind of text it's actually urgent like you need to withdraw money right away some people are vocal about withdrawing money from Silicon Valley Bank and this caused Bank Run people try to withdraw almost 42 billion dollars from Silicon Valley Bank so basically if this Bank round had not happened 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