American venture capital investor, Tim Draper, has advised company founders to plan and hold at least two payrolls worth of cash in bitcoin (BTC) or other cryptocurrencies.
Preparing for the unforeseen
Tim Draper has warned business founders to prepare for “more and more” bank failures if the government keeps printing money and raising interest rates.
Further, he asked business founders to have at least two payrolls worth of cash in Bitcoin or alternative cryptos in their reserves in response to the collapse of Silicon Valley Bank (SVB).
Draper’s report on Mar. 25 mentioned that bitcoin is a hedge against a “domino run” on the banks and the increasing government intervention. In addition, he added that businesses “can no longer rely” on one governing body or single bank to govern their cash.
Draper added that business founders should keep six months of short-term cash in two different bank accounts. Of the two accounts, one should be an international bank and another a local one.
In his analysis, these steps are necessary as it is the first time in years that governments are seizing bank control, and governments are also at risk of insolvency. Draper further revealed that many startups looked for emergency relief from him after banks like SVB collapsed.
Safety in contingency plans
Draper then emphasized the importance of contingency plans considering the management and boards responsible for meeting payroll deadlines even during a crisis.
He reminded founders to remain vigilant against fraud risk since fraudsters are skilled at learning and exploiting the weaknesses in a system. In addition, he advised founders to verify with all involved parties whenever there was a change in the wire instructions or a new approval system.
Meanwhile, the move comes after Draper’s self-composed bitcoin song during his keynote speech at the Paris Blockchain Week 2023 on Mar. 22. He mentioned that the song was dedicated to SVB and all fallen and falling banks, concluding that blockchain and Bitcoin had been the most significant transition in the world’s history.