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Even as an individual with not a lot of money, I think this is prudent. When you give your money to a bank, they effectively give you back an IOU. And while mo

Even as an individual with not a lot of money, I think this is prudent. When you give your money to a bank, they effectively give you back an IOU. And while most of the time they can make good on it, sometimes the investments they make with your money are risky, short sighted, or just unlucky. In any case, don’t put yourself into jeopardy by not having other options.

roland35 4y ago
Exactly! My personal finances are nowhere near as sophisticated as even a small start-up, but I make sure I have multiple sources of cash and credit just in case I lose access to one for whatever reason temporary or permanent (bank failure, fraud, forget password, etc). It isn't too difficult: open up a second savings account, apply for an extra credit card, open a HELOC if available. I have to believe there is some similar basic things a business can do to be more resilient. Even waiting for guarantees insured FDIC funds can be a problem depending how long it takes. PS: not trying to victim blame for companies who trusted SVB. This is just a rough reminder to be prepared for contingencies.
- manquer 4y ago
  It isn’t too difficult for you as individual to open an account anywhere . Startups don’t have that luxury it was and still pretty difficult to do banking as an early stage startup . There is a reason why there are only 2-3 banks specialized in this sector and everyone banked with them. If you were a small startup keeping your money in SVB was the safest thing you could have done till last week. They were the largest by far and all your VCs recommended them and probably introduced you to them so you could open an account .
  - roland35 4y ago
    I have a hard time believing a business can't simply open a second checking account somewhere, assuming they have the cash and don't need any extra features. Maybe if it was a very early company. VCs and advisors failed their companies if this was their only advice. Also "safest thing since last week" isn't super convincing! Maybe I'm just more conservative since I used to bank with Wachovia which failed in 2008. As an engineer I am expected to have a disaster recovery plan. Sure it's unlikely that AWS goes out of business, but what if we lose access? Lose data? Ransomware? Businesses need to have some basic planning around this kind of stuff or else they run this type of risk unfortunately. Again I hope they get all their deposits back. But they should hopefully be able to stay in business for a short time until the dust settles.
    - deleted 4y ago
      [deleted]

roland35 4y ago

Exactly! My personal finances are nowhere near as sophisticated as even a small start-up, but I make sure I have multiple sources of cash and credit just in case I lose access to one for whatever reason temporary or permanent (bank failure, fraud, forget password, etc). It isn't too difficult: open up a second savings account, apply for an extra credit card, open a HELOC if available. I have to believe there is some similar basic things a business can do to be more resilient. Even waiting for guarantees insured FDIC funds can be a problem depending how long it takes. PS: not trying to victim blame for companies who trusted SVB. This is just a rough reminder to be prepared for contingencies.

manquer 4y ago
It isn’t too difficult for you as individual to open an account anywhere . Startups don’t have that luxury it was and still pretty difficult to do banking as an early stage startup . There is a reason why there are only 2-3 banks specialized in this sector and everyone banked with them. If you were a small startup keeping your money in SVB was the safest thing you could have done till last week. They were the largest by far and all your VCs recommended them and probably introduced you to them so you could open an account .
- roland35 4y ago
  I have a hard time believing a business can't simply open a second checking account somewhere, assuming they have the cash and don't need any extra features. Maybe if it was a very early company. VCs and advisors failed their companies if this was their only advice. Also "safest thing since last week" isn't super convincing! Maybe I'm just more conservative since I used to bank with Wachovia which failed in 2008. As an engineer I am expected to have a disaster recovery plan. Sure it's unlikely that AWS goes out of business, but what if we lose access? Lose data? Ransomware? Businesses need to have some basic planning around this kind of stuff or else they run this type of risk unfortunately. Again I hope they get all their deposits back. But they should hopefully be able to stay in business for a short time until the dust settles.
  - deleted 4y ago
    [deleted]