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It is an excellent customer base for a bank. Startups are going to burn at a fairly moderate rate, such that you have a fairly good idea of the cash flows you w
by blitzar 4y ago
It is an excellent customer base for a bank. Startups are going to burn at a fairly moderate rate, such that you have a fairly good idea of the cash flows you would face in the normal course of business - it wouldn't take the most advanced Ai in the world to know for every startup on your books what their cash flow out will look like for the next 12-24 months.
By also being tied into the valley and the big VCs you have a fairly consistent stream of new accounts and large deposits throughout the year.
- JumpinJack_Cash 4y agoI am not sold on deposits rising overall because startups die a lot and the few homeruns will quickly dump you for Morgan Stanley or JPM as soon as they make it big. But even if deposits rise how are you going to propel the money multiplier considering that your customer base doesn’t need loans? Startups are notoriously scared of any debt/loan