Founders Fund withdrew millions from SVB, said the person, who asked not to be identified discussing private information. It joined other venture funds that took dramatic steps to limit exposure to the now-failed financial institution. Founders Fund also advised its portfolio companies that there was no downside to moving their money away from SVB, even if the risk was low.
Founders Fund acted in other ways to move its business away from SVB. On Thursday, as the bank was beginning to unravel, the firm started what's known as a capital call. That's a run-of-the-mill activity in the venture capital world, in which a VC firm asks its investors, or limited partners, to send it money in order to make investments in startups — the core function of most VC firms. It began by asking those backers to transfer the funds to accounts at SVB, as it has done for years, the person said.
But the firm learned that its limited partners were encountering issues using SVB services as they tried to transfer the funds — they weren't immediately going through as expected, the person said.