Facing heat for his investment fund’s role in triggering the run on the Silicon Valley Bank last week, billionaire Peter Thiel told the Financial Times that he had $50m of his own money “stuck” in the bank when it collapsed.
Even as Thiel’s Founders Fund was advising companies to move their money from the bank, a decision that has been widely blamed for precipitating its failure, Thiel said that he kept a portion of his own $4bn personal fortune in the bank.
“I had $50mn of my own money stuck in SVB,” Thiel told the Financial Times in a story published Thursday, saying that he believed the bank would not fail.
In the wake of the biggest US bank failure since the 2008 financial crisis, venture capitalists in Silicon Valley have been trading blame over who was responsible for sparking the run on a major tech industry bank.
Founders Fund, the venture capital firm which Thiel started after his successes co-founding PayPal and investing early in Facebook, was “one of the first to begin alerting portfolio companies to the risks at SVB”, the Financial Times reported. As a prominent Silicon Valley player, the Founders Fund’s view on the bank spread rapidly, as frightened tweets and group chat gossip amplified the panic.
“$42bn came out of this bank on one day, on Thursday. And, frankly, some actors, I think, were accelerating that run,” Democratic senator Mark Warner told ABC News on Sunday. “This happened so, so quickly.”
Amid scrutiny of Thiel’s role in the crisis, Axios reported that Thiel “was not part of the conversation” to move the fund’s money out of the Silicon Valley Bank. The news outlet also noted that recriminations over the bank’s failure included speculation over whether the Founders Fund’s move was “intentional, as payback for some unknown grudge between the two groups”.
“We reacted in line with our fiduciary duties,” Founders Fund CEO Neil Ruthven said in a statement to Axios.
Founders Fund did not immediately respond to a request for comment from Thiel or other fund leaders.
The US government quickly moved to guarantee that all of Silicon Valley Bank’s depositors would get their money, including many whose deposits exceeded the typical federally guaranteed level of $250,000. Thiel’s account was briefly frozen, but he now has access to it again, the Financial Times reported.
Thiel is a prominent Republican donor who backed Donald Trump’s first White House campaign and backed several rightwing campaigns in the 2022 midterms, including helping to elect Ohio Republican senator JD Vance.
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