4 ms·

Banks don't understand startups. Startups have no history and just appear out of thin air with millions of dollars in their bank account. And then they proceed

Banks don't understand startups. Startups have no history and just appear out of thin air with millions of dollars in their bank account. And then they proceed to burn tens if not hundreds of thousands of dollars month on month until they die, or get flooded with more millions. That's some weird stuff!! A bank that understands this, knows it's not fraudulent, and makes it easy to withdraw, deposit, get credit cards, give loans/venture debt, has a competitive advantage in this niche but highly lucrative sector—given they can operate with the right risk controls.

jeron 4y ago
SVB has been a great bank for startups, they're no rookie at this stuff considering they've been around for 4 decades. However it seems like their investor communications and PR has been lacking
dgacmu 4y ago
+this. We had BoA offer us a $10k credit card limit when we were discussing keeping over $1m on deposit at all times, simply because we're still running a loss. (And they couldn't figure out how to implement two party control for large transfers). Was a headache. We stayed with SVB.
tootie 4y ago
I feel like this is unlikely. Startups didn't spring into existence in 2005. Every business was a startup at one point. Even venture capital isn't new. I'd wager every suit and tie wall st old guard firm knows how to handle startups just fine. SVB just had the right branding for young entrepreneurs who assumed JP Morgan wouldn't talk to them.
- jen20 4y ago
  They might know how to, but they choose not to.
  - tootie 4y ago
    In that case it would just SVB has a much higher risk tolerance and it seems that may have bitten them in the ass.
    - jen20 4y ago
      Indeed: this may portend a very rough few years for small businesses of any type and location being able to access the kind of banking services they have been able to until now.
- borski 4y ago
  Having worked with both major banks (BoA, Chase) and startup focused banks (SVB, First Republic, Square1) - you’re incorrect. BoA and Chase are great for personal capital, but for startups they are horrendous. Huge pains to convince them you’re not a drug dealer and aren’t going to die tomorrow. SVB, FRB, etc., understand startups and make it possible to… bank with them.
chii 4y ago
> knows it's not fraudulent so a fraudster could easily exploit this bank then?

jeron 4y ago

SVB has been a great bank for startups, they're no rookie at this stuff considering they've been around for 4 decades. However it seems like their investor communications and PR has been lacking

dgacmu 4y ago

+this. We had BoA offer us a $10k credit card limit when we were discussing keeping over $1m on deposit at all times, simply because we're still running a loss. (And they couldn't figure out how to implement two party control for large transfers). Was a headache. We stayed with SVB.

tootie 4y ago

I feel like this is unlikely. Startups didn't spring into existence in 2005. Every business was a startup at one point. Even venture capital isn't new. I'd wager every suit and tie wall st old guard firm knows how to handle startups just fine. SVB just had the right branding for young entrepreneurs who assumed JP Morgan wouldn't talk to them.

jen20 4y ago
They might know how to, but they choose not to.
- tootie 4y ago
  In that case it would just SVB has a much higher risk tolerance and it seems that may have bitten them in the ass.
  - jen20 4y ago
    Indeed: this may portend a very rough few years for small businesses of any type and location being able to access the kind of banking services they have been able to until now.
borski 4y ago
Having worked with both major banks (BoA, Chase) and startup focused banks (SVB, First Republic, Square1) - you’re incorrect. BoA and Chase are great for personal capital, but for startups they are horrendous. Huge pains to convince them you’re not a drug dealer and aren’t going to die tomorrow. SVB, FRB, etc., understand startups and make it possible to… bank with them.

chii 4y ago

> knows it's not fraudulent so a fraudster could easily exploit this bank then?