Tim Draper advises founders to have “at least” two payrolls “value of cash” in crypto
American venture capital investor and entrepreneur Tim Draper advised entrepreneurs to keep at least two payrolls worth of cash in Bitcoin (BTC) or alternative cryptocurrencies, along with other diversification recommendations, in response to the uncertainty created by the collapse of Silicon Valley Bank (SVB) .
In a March 25 report aimed at business founders, Tim Draper stated that Bitcoin is a hedge against a “domino run” on banks and against overbearing government intervention, adding that businesses “can no longer rely” on a single bank or governing body to manage their cash.
Some tips for business cash management post SVB. #bitcoin #trust #freedom
— Tim Draper (@TimDraper) March 24, 2023
Draper suggested that business founders keep at least “6 months of short-term cash” in two separate bank accounts — one with a local bank and another with an international bank.
He noted that businesses should also have at least two payrolls “cash worth” in Bitcoin and other cryptocurrencies.
These preventive measures were necessary, according to Draper, because for the “first time in many years” governments are taking control of banks, and governments themselves “are in danger of becoming insolvent”.
He further revealed that “many startups” sought emergency help from him after SVB and other banks closed down.
Additionally, Draper emphasized the importance of contingency plans, as boards and management are responsible for meeting payroll deadlines, “even in times of crisis.” He noted:
“It is important to develop contingency plans for bank failures that may happen more and more often if the government continues to print money and whip up interest rates to counter inflation caused by overprinting money.”
Highlighting the risk of fraud, Draper reminded founders to be on the lookout for fraud, noting that fraudsters are adept at identifying weaknesses in a system and exploiting them.
Furthermore, to prevent phishing theft, he advised the founders to verify with all parties involved whenever there are changes in wiring instructions or a new approval system.
Related: Silicon Valley Bank’s downfall has many causes, but crypto is not one
This comes after recent news that Draper performed a self-composed Bitcoin Song after his keynote address at Paris Blockchain Week 2023 on March 22.
He stated that the song was dedicated to SVB and “all the banks that have failed and will fail.”
The song received a round of applause from the audience, and Draper ended his time on stage by saying that blockchain, Bitcoin and smart contracts make up one of the “biggest transitions in the history of the world.”
