Peter Thiel said he had $50 million in a Silicon Valley bank, after his venture fund warned portfolio companies that the tech-focused lender was at risk.
The veteran technology founder and investor was widely blamed for preventing a bank run in which depositors tried to withdraw more than $40bn in 24 hours last week. His venture capital firm Founders Fund was among those that advised clients to move their deposits to other lenders as concerns about the bank grew.
But Thiel told the Financial Times this week that he had maintained a substantial personal account at SVB, despite fears over its future and the subsequent run on the bank that eventually toppled it.
“I had $50mn of my own money tied up in SVB,” said Thiel, who co-founded tech companies PayPal and Palantir in addition to Founders Fund.
Thiel said he did not withdraw money from his account because he believed the bank would not fail. His account was frozen on Friday when the Federal Deposit Insurance Corporation stepped in and took over SVB. It is once again accessible after the Federal Reserve intervened on Sunday with emergency funding measures to protect depositors.
Founders Fund is one of Silicon Valley’s most prominent and influential venture capital firms. The fund was the first to start warning portfolio companies about risks at SVB, advising them to consider diversifying from the bank as early as last week, according to people with knowledge of the matter.
But it was not the only venture capital firm encouraging companies to spread their risk, especially when SVB’s share price began to fall late last week after it announced plans to raise more than $2bn in a share sale.
Andreessen Horowitz suggested that founders call on their relationship managers to prepare a plan, while Lux Capital and Sequoia Capital emphasize the importance of diversification to spread risk, according to supporters of the companies and other venture capitalists who share portfolios with them.
Founders Fund did not comment on its advice last week, but other venture capitalists who advised their portfolio companies to move funds last week insisted that it was their fiduciary duty to do so and that they had acted responsibly.
Thiel has been a major supporter of Republican politicians, including former President Donald Trump. He has also been a vocal advocate of cryptocurrencies, saying at a conference in Miami last year that the digital currency could replace fiat money. At the same time, Founders Fund sold most of its cryptocurrency holdings.