Tim Draper recommends founders hold ’at least’ two payrolls ‘ | Crypto Fight
Tim Draper recommends founders hold ’at least’ two payrolls ‘worth of cash’ in crypto.
American venture capital investor Tim Draper warned business founders to prepare for “more and more ” bank failures if the government continues to “print money and whipsaw interest rates.“
American venture capital investor and entrepreneur Tim Draper suggested founders keep at least two payrolls worth of cash in Bitcoin 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 directed at business founders, Tim Draper stated that Bitcoin is a hedge against a “domino run” on the banks and overbearing government intervention, adding that businesses “can no longer rely” on a single bank or governing body to manage their cash.
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 “worth of cash” in Bitcoin and other cryptocurrencies.
These preventative steps were necessary, according to Draper, because for the “first time in many years,” governments are seizing control of banks, and governments themselves are “at risk of becoming insolvent.”
He further revealed that “many startups” sought emergency relief from him after SVB and other banks shut 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 added :
“It is important to build out contingency plans for bank failures that could happen more and more often if the government continues to print money and whipsaw interest rates to counteract inflation caused by the over-printing of money.”
Draper reminded founders to be vigilant against the risk of fraud, noting that fraudsters are skilled at identifying weaknesses in a system and exploiting them.
Furthermore, to prevent phishing theft, he advised founders to verify with all parties involved whenever there is a change in wire instructions or a new approval system.
