4 ms·

Just one anecdote of many. I'm a founder of a bootstrapped startup. We are/were with SVB. On Thursday I tried to get a Brex cash account setup to move some oper

• rdl 4y ago
  Not a lawyer, but I would be pretty comfortable with SVB -> personal account if you documented why and communicated about it in advance with board/counsel. (Obviously the next step would be opening a Chase/etc. account and sending the funds on to that, not using your personal account for company business on an ongoing basis, but a limited number of emergency transactions should be fine.)
  • Waterluvian 4y ago
    Isn’t it generally a cardinal sin of business finance though?
    • dboreham 4y ago
      Also nal and naa but no: it's "comingling" that's bad. If you explicitly document the transactions, don't do it all the time, and ideally use matching amounts in and out, it's not comingling.
    • rdl 4y ago
      Comingling is. In this case there is a clearly articulable reason why ("our bank is going out of business"), and it's temporary, documented, etc. The twin risks to avoid are appearance of embezzlement, and appearance that you're treating the business account and personal account as one (which potentially allows piercing corporate veil/attaching personal assets), but if your building is on fire, you're allowed to break the window to rescue the kitten.
    • danielfoster 4y ago
      Not if it’s documented, short-term and for a very extraordinary reason.
    • davidkuennen 4y ago
      Interesting that its viewed so critically in the US. If documented its no problem and not uncommon at all in Germany. In fact many business owners pay something like credit card bills personally and reimburse through the company later.
      • deleted 4y ago
        [deleted]
      • Ekaros 4y ago
        Wouldn't this be other way around. First pay yourself and then spend that money on company bills? Which sounds very iffy to me as European.
      • rdl 4y ago
        That is far more common in the US (basically paying expenses on your personal cards, expensing to the company after the fact). You can also advance on some expenses sometimes (this can be abused so there are some accounting restrictions on how you'd do it, etc.). What is weird/scary (especially when not documented clearly and in advance) is moving your entire bank balance into a personal account. Aside from government/tax/legal, you'd have your investors (in a venture/angel backed company) to justify it to. It's justifiable in this truly exceptional case of SVB imploding and no other bank account being available. (It gets harder to justify in a larger company with lots of investors and more money involved; moving a $100mm balance in a company where you were down to 10% ownership to a personal account even in this situation would be weird AF and depending on the banks involved might cause you problems. I probably still would have emailed counsel and investors/etc. on thursday morning to ask what to do; likely would have sent it to lawyers to handle actually in the huge-account situation.)
        • davidkuennen 4y ago
          I see. That makes sense. Thank you for clarifying.
        • saalweachter 4y ago
          Also, imagine the case where you do this and you're wrong. You panic but you're in the minority and there's no bank run and a week or two goes by and the bank is still fine. Now you've got a weird thing to explain and no vindication.
    • xyzzy123 4y ago
      It's an "antipattern" (and usually a strong sign that something is badly wrong) but it's not illegal... "sinful" is a useful hint that something is "norm" related.
      • Waterluvian 4y ago
        Yeah, I didn’t say illegal. Often “cardinal sin” is just a playful way of saying “something thou shalt never do.”
      • deleted 4y ago
        [deleted]
  • kfrzcode 4y ago
    If you're not a lawyer, in this case, it's not really relevant what your comfort level is with business dealings. If you're a professional with appropriately relevant skills and expertise, I'd rescind my comment.
    • 0xEFF 4y ago
      I’m a business owner with payroll married to a attorney. I’m comfortable doing exactly as GP described to make payroll.
      • kfrzcode 4y ago
        Thank you; contextually I must rescind my previous comment.
  • kkielhofner 4y ago
    Given the disaster and nearly unprecedented nature of these events I doubt anyone would bat an eye at a CEO taking the decisive action to do what needs to be done to survive (and fix it later). For many the past few days have been the startup equivalent of "fog of war". As others have noted it's not embezzlement/commingling and given the scenario "Wire out from SVB corp account to personal, document exact amount, and wire back to corp $NEWBANK a week/days later, document again" would hardly cause any heartburn now or down the road. Many would see it as responsible, proactive, and heroic. Depending on the amount the only issue would likely come from your personal bank - I know of people with ~$10m at SVB and I have to imagine all of sudden wiring those kinds of funds to a personal account with an average daily balance that's a fraction of that would raise some alarms on the personal account - or maybe not as I can imagine the big big banks (BoA, etc) probably saw a lot of this on Thursday...
    • ttsgeysygd 4y ago
      FWIW, on Thursday it wasn’t clear to me I had so little time to get money out and part of me felt like contributing to a bank run, before it was clear there was a bank run, was not being a good citizen. Still not sure how I feel about it all. SVB staff were great over the 10+ years we banked there. Tech was always crap but I liked the people. Very sad all around.
      • rdl 4y ago
        I totally agree re "contributing to a bank run" feeling shitty, but you have more obligation to your employees (especially), investors, and customers IMO than to your vendor (the bank). Congrats for being able to cover the payroll regardless, though. (I am pretty confident there will be at least 250k + 50% advance-dividend early this week, and still optimistic but far from certain that a buyer will take the whole thing and it will be 100%. Last time people actually took losses of 50% above the FDIC amount (100k at the time) was 2008 (IndyMac).)
      • kkielhofner 4y ago
        That's where I was. My startup has about $25k in SVB - but we don't have payroll and I have personal access to that without impacting me if push came to shove (paying contractors, etc). I was aware of the situation and probably could have gotten the funds out but I knew we were well below the FDIC threshold and just didn't want to bother with it (frankly). I would have had more anxiety executing the wire and waiting for it to show up on the other side... Speaking personally I'm actually kind of curious to see what the FDIC process looks like - in the grand scheme of things it makes you part of a relatively small club! While I know people are suffering and the situation is a lot worse for many I'm actually looking forward to telling the story when appropriate. The general population is already fascinated by startups and I've had more than a few "civilian" friends reach out to me asking about the SVB situation. When I tell them we're kind of impacted but not really they just kind of chalk it up to another "Wow, startup life is so wild even THE BANK failed". Additionally I'd say the same - through various startups I've worked with SVB for over 15 years and the people have always been great (systems not so much).
• breck 4y ago
  Your 2 week payroll is more than $250,000 and you are bootstrapped? I call B.S. Something doesn't add up. Coming from an anon account no less.
  • gfsdgsfgfds 4y ago
    It is not. SVB account is frozen. Nothing in or out. Wire had to land March 13th so had to be sent Friday.
    • breck 4y ago
      A wire on the 13th lands on the 13th.
      • gfsdgsfgfds 4y ago
        My personal bank is Bank of America. I paid the $30 to do "1 business day" I read that as if I did it on Monday it would land Tuesday. Gusto was saying it had to be funded by Monday. Perhaps it would have worked out fine that funds would be unlocked on Monday and Gusto would have been fine with wire initiated on Monday, but this was Friday and everything seemed on fire. FWIW, Just looked at the screenshot of the wire completion and it does say "Same day". But I did it at after 8pm. Anyway, I felt I did the safest thing to keep the staff from freaking out and for me not to be too stressed through the weekend. I'll have enough headaches moving banks the next two weeks to also be worried about payroll.
        • kfrzcode 4y ago
          A wire can commonly take up to two days; just FYSA. https://www.investopedia.com/terms/w/wiretransfer.asp https://www.investopedia.com/terms/w/wiretransfer.asp
        • breck 4y ago
          Got it. So you are unfamiliar with the wire system. Most people are. I actually don't have anything good to say about it. (Sidenote: 24/7 crypto is far better, but crypto is still a bit of a wild west so I don't recommend for people who aren't comfortable being early adopters) You are learning a lot and sounds like you figured out a way to not have your employees see any hiccup. Well done. Thank you for replying and providing more info. Nowadays one must assume ChatGPT bot/shill when talking to a new account.
• dgacmu 4y ago
  For others who might be in the same position, it might be worth contacting your payroll processor. Ours, justworks, indicated that we could wire them the money on the invoice processing day and still make payroll. (That will be either Monday or Tuesday, I forget which - we somehow got really lucky; our payroll ACH got pulled right before the shutdown)
• leetrout 4y ago
  How much cash do you have available? Other threads over the past few days scoffed at having 100-200k in cash available.
  • inconceivable 4y ago
    after being here for over 10 years (not on this account), i've observed that hn is basically split into two groups: people with money, and people who don't have much of it. the people with less money are much more vocal about it, for obvious reasons.
    • jll29 4y ago
      What you state is perhaps obvious, I would not even bother to open a new account to conceal my identity just to say that... It is a bimodal distribution of (1) the lucky ones and (2) the ones either "not yet lucky" ones (1/10) or the "never lucky"ones (9/10). I find it refreshing to hear stories about how things did _not_ work out (from the sources). It is much harder to get the real stories behind the successes because people tend not to ascribe things to luck but create some story after the fact in the same way, as they say, "the winner writes the history".
      • inconceivable 4y ago
        if you believe in good luck, do you believe in bad luck? you frame it as "not lucky" instead of "bad luck". in other words, if you ascribe success to nothing in particular other than luck, why do you put more stock in the negative case? couldn't failure be caused by nothing other than bad luck? reading failure stories to look for what to avoid might not be the right strategy if you believe in a world where luck dominates.
• inconceivable 4y ago
  i had to do this once during a clerical fuckup with our payroll provider. the accountants just classified it as a reimbursed expense. you just comp yourself the exact same amount as the payroll and it isn't taxed as income. in general accountants have ways of dealing with all sorts of edge cases, but you need to keep REALLY good documentation and notes about what/why/how, etc. "i thought the bank was going to collapse, and then it did" is a pretty good reason. wiring yourself the money and moving it to a new business bank account would have been perfectly fine too - you're simply moving the cash to another location. in fact i'm pretty sure that's what most people who got their money out of svb did - very few small businesses have multiple checking accounts.
  • Tarq0n 4y ago
    Where I live most checking accounts have transfer limits you'd run into when trying to pass the money out of your personal account again.