In response to the recent collapse of Silicon Valley Bank (SVB), American venture capital investor and entrepreneur Tim Draper has advised business founders to keep at least two payrolls worth of cash in Bitcoin or alternative cryptocurrencies. He believes Bitcoin is a hedge against government intervention and a “domino run” on banks, and warns that businesses can no longer rely on a single bank or governing body to manage their cash.
Draper suggests keeping “6 months of short-term cash” in two separate bank accounts, one with a local bank and another with an international bank, as well as at least two payrolls worth of cash in crypto. He also emphasizes the importance of contingency plans for bank failures, which could become more common if governments continue to print money and whipsaw interest rates to counteract inflation.
Draper emphasizes the importance of caution among founders to avoid fraud and advises them to verify all parties involved in cases of changes in wire instructions or new approval systems.
