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Tim Draper recommends founders hold ’at least’ two payrolls ‘worth of cash’ in crypto

March 26, 2023No Comments


American venture capital investor and entrepreneur Tim Draper suggested that the founders keep at least two cash payrolls 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).

On a March 25 report Targeted at company founders, Tim Draper stated that Bitcoin is a hedge against a "domino run" on the banks and authoritarian government intervention, adding that companies "can no longer trust" a single bank or government body to manage your cash.

Draper suggested that business founders keep at least "6 months of short-term cash" in two separate bank accounts, one at a local bank and one at an international bank.

He noted that businesses should also have at least two “cash worth” payrolls in Bitcoin and other cryptocurrencies.

These preemptive steps were necessary, according to Draper, because for the "first time in many years," governments are taking control of banks and governments themselves "are at risk of becoming insolvent."

He further revealed that "many startups" sought emergency help from him after SVB and other banks went out of business.

Additionally, Draper stressed the importance of contingency plans, as boards and management are responsible for meeting payroll deadlines "even in times of crisis." He added:

"It's important to come up with contingency plans for bank failures that could occur with increasing frequency if the government continues to print money and adjust interest rates to counter inflation caused by overprinting money."

Draper reminded founders to be aware of fraud risk, noting that fraudsters have a knack for identifying weaknesses in a system and exploiting them.

Additionally, to prevent phishing theft, he advised founders to check with all parties involved whenever there is a change in transfer instructions or a new approval system.

Related: Silicon Valley Bank's Fall Has Many Causes, But Crypto Is Not One

This comes on the heels of recent news that Draper performed a Bitcoin song composed by themselves after his keynote speech at Paris Blockchain Week 2023 on March 22.

He said 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, with Draper concluding his time on stage by saying that blockchain, Bitcoin and smart contracts constitute one of the "greatest transitions in the history of the world."