[a5seo]

I founded a startup. We raised $2.5M, not all at once. We banked at SVB. It sucked. Subpar online tools. $200/mo “analysis fee,” never once had a “relationship” with anyone. Maybe we were never big enough to be relevant. That’s fair.

My advice: use a retail bank until you have a few million in revenue, then shop around. Make the SVB’s of the world earn your business. SVB in particular was so incredibly entitled.

I’m glad they failed more spectacularly than my little startup.

[kentonv]

Weird, that's not my experience.

My startup, which raised $1.2M back in 2015, didn't have to pay any monthly fee -- at least until the balance dropped below some threshold in the 5-digit range at which point they started charging $15/mo, I think.

After that startup failed SVB courted me for a personal account. They actually came to me in person, took me out for coffee and stuff. I didn't even have much money at the time but they just seemed really interested in signing up startup founders (even failed ones).

For comparison I tried talking to Chase Private Client at their Palo Alto branch, since my old 401k had gotten big enough to qualify for their minimum if I rolled it over to them. The banker there practically sneered at me, acted exasperated like I was wasting his time and he had much bigger clients to tend to. Also gave me a spiel about their high-fees wealth management in which he asked leading questions about my investments and then tried to make me feel stupid about my answers so that I'd decide to pay Chase to manage it instead. This was all obviously a marketing shtick and I found it incredibly insulting. I went with SVB.

Yes, SVB's web site was ugly. Weirdly they had totally different ugly web sites for their business and personal arms. It functioned fine, though.

[csomar]

It's not relative to the bank but to the bank branch. I have an account with Chase and I made it clear that I'll be depositing $2K to keep the account on, and I would not be using it for day to day transactions. The branch manager was cool with that and we chatted for an hour or so about different stuff and he actually gave me some real advice.

This is not about Chase, it's about the branch and the branch manager. I'm pretty sure another branch manager will be annoyed talking to a $2k client in deposits with no in/out flows and might not even consider them for an account.

If you want to bank with a specific bank, shop for the branch.

[kentonv]

True, a few years later, I now live in Austin and the Chase people here are a whole lot nicer to me. Maybe there's just too many ultra-rich people in Palo Alto, heh.

[fatnoah]

> The banker there practically sneered at me, acted exasperated like I was wasting his time and he had much bigger clients to tend to

I had a partial version of this experience with Charles Schwab. (I've been a banking customer for many, many years and have been very happy with them). When I left my first startup after the many year run up to the 2008 crisis, I decided to roll my fairly substantial 401(k) balance to my tiny Schwab brokerage account.

Waiting for the rollover check to arrive was nerve-wracking enough, so I decided to deposit it in person at my local branch in a major city rather than mail it to them and wait again. When I walked into the branch, the reception person looked me up and down and was warming up to tell me that no, they don't have public restrooms. Once I gave my account information, they became very friendly and once I plopped the check down on the counter for deposit, it was all coffee, juices, and pastries from then on. ;)

[spoonjim]

You went with the bank that massaged your balls and almost lost your money because of it

[kentonv]

I was under the FDIC insurance limit so I was not at risk of losing my money.

[inconceivable]

here's an anecdote with zero drama:

we started at $0 revenue and $2000 initial deposit at citibank. over the next few years we put $millions a year through them, carried a balance of $millions in combined checking and mmf, and sold our company for $millions. now my personal accounts at the bank are in $low-thousands, and my post-sale money is in investment banks.

nobody from citi ever called, or cared, or said anything when i went to the branch other than one time a teller asking me what our business did because he thought we were a tech company and he really liked cloud computing stuff. i was happy to talk to him about it, and that was it.

99% of banking is boring and uneventful, it's just numbers on a screen, especially if you live in an area where big bank accounts are common (certain areas of big states like ca, tx, ny, etc.)

anecdote on an anecodte: when we sold our biz, i tried to transfer ownership of the account to the new owner, and the branch manager couldn't actually make that happen. he said i needed to write a letter (a physical, printed and signed letter) to the headquarters of citi. l-o-l obviously we didn't do that, so we just shut it down and cashier check deposited the balance to the new owner's account at chase - and they happened to have a branch literally 2 blocks away. i just walked in and deposited the check into his account #. the teller seemed like she did this sort of thing on a regular basis.

[eastbound]

> 99% of banking is boring and uneventful, it's just numbers on a screen

I wish my bankers would shut up about building a relationship, and just process these numbers. They are the car dealerships of holding money, such employees should be working on instagram not in the real economy. Human in the loop costs huge amounts of money and they only interfere.

Last time after a bank transfer that required log in, login confirmation by phone, bank transfer UI access by digit card security, bank transfer confirmation by SMS…

…she just called to check it was me. For $650.

I wish banks would just shut up and process our money.

[shapefrog]

> They are the car dealerships of holding money, such employees should be working on instagram not in the real economy.

They should get real jobs like being influencers or something.

[specialdragon]

$650 is a lot of money. Yes, definitely have those checks. I'd rather they call and check and everything is fine, than they not call, and things not be fine.

[earnesti]

Whether 650 is a lot or not is totally subjective. That's why banks normally have customer specific risk thresholds.

[inconceivable]

> $650 is a lot of money.

no. it really isn't.

[notjtrig]

650 dollar bills is a lot of singles, it could feed a man for a month or more, or provide enough gas to drive across the US, it must be a lot of money, but it's quickly lost when it comes to basic needs like housing, healthcare and education.

[eastbound]

When you have $1m revenue on the same bank account, why would they ever care about $650.

[specialdragon]

For those saying it's not a lot of money, I shall gladly accept your donations. $650 would allow me to buy myself a new office chair, or sort out a DIY project. Sure, I can save for these things, but if it's an inconsequential amount for you - it's an amount of consequence for me.

[AdamN]

My favorite experience at Citi ironically was closing my checking account. I forgot why but anyway I went to the counter and they just said, 'ok'. I put in my debit card and pin to prove identity, then showed them my license as a second form of identity, then I signed on the electronic pad and received an envelope with my balance in it. Done. No, 'Why are you leaving?' and high pressure tactics - didn't even need to go to one of the desks in the back.

I'll bank again at Citi if I ever need to based solely on how easy it was to leave them.

[yamtaddle]

> I'll bank again at Citi if I ever need to based solely on how easy it was to leave them.

Time Warner: "You won't stay with us over Google Fiber even if we're cheaper?"

Me: "No, because I won't have to have this stupid conversation if I decide to cancel Google Fiber."

[good_boy]

Not that easy. My experience, I was a client for a long time (>10 years).

One day I was unable to log in. After logging successfully a message popped up demanding debit card activation. Every time I pressed 'cancel' I was logged out. That lasted for months. Effectively they locked me out of online access. By then I moved everything to another bank, so it wasn't a big problem. Then I visited their branch in person and requested all my accounts to be closed. I repeated 'All of them'. They did it, or pretended. I left being sure I'm done with Citi forever. But no, they kept debit card account open, without telling me. For charging purposes, as they don't provide any services, and they know it.

If locking out (they did build and activate this functionality in their system) was the bottom of banking. Silent not closing on request and demanding money for 'service' is a scum. My recommendation: Stay away from Citi.

[ghiculescu]

We chose to not use SVB because their online banking was so bad. Dodged a bullet.

[vinay_ys]

I find it weird/hilarious that the darling bank of tech startups in the heart of Silicon Valley has bad UX.

[koolba]

We’re you forced to use them as a bank as part of the funding agreement? Otherwise why put up with that crap?

[gerad]

When you start a startup, especially a venture-funded one, you really only want to be innovative in one area: your core offering. It doesn't make sense to spend an innovation token on your bank. So you go with something tried and true, that's done it a million times before with a million other startups. That was SVB.

Going with something else has potential downsides that you may not even be aware of (as the OP describes).

[sanderjd]

Seems like this conventional wisdom about innovation tokens was actually very poor in this particular area. Makes me wonder what other bad decisions might be lurking behind that best practice.

[paulgb]

Although, things worked out in the end for depositors, likely in part because it was a high-profile, “safe bet” bank.

[lazide]

Honestly, this is generally the way the FDIC has done it. I don’t recall any uninsured depositors at Wamu getting screwed either in ‘08.

[RC_ITR]

Because they got bought.

Uninsured Indymac depositors got $0.50/dollar and usually, an uninsured depositor at a small bank can expect $0.60-0.75/dollar.

[freddie_mercury]

Was it very poor?

Other than a weekend of stress, what was the actual downside to a founder of using SVB?

[sanderjd]

> Was it very poor?

Clearly yes.

If you think there has been no damage to startups since Thursday... well, you're wrong. This episode just made us all poorer. There will be more regulation, there will be exponentially less goodwill (and our industry was already struggling on this front). Any remnant of an image of "tech" being smart or special somehow is totally shot.

So yeah, spending just a bit more time thinking about how to manage risk would have been a more wise approach.

[jjnoakes]

Does the outcome justify the risk if the outcome could have gone radically differently?

Is driving without a seatbelt not a poor decision if one walks away from the wreck?

[lazide]

What seatbelt was someone not wearing in this case?

The normal retail banks are TERRIBLE. I did my startup using a retail bank to start (BofA), and it was an absolute nightmare.

I ended up at First Republic, and they’ve been great.

[rblatz]

Sounds more like you are describing Chase bank. It’s tried and true and millions of businesses from small mom and pops to fortune 10 companies use them. They’ve seen it all and could even be an underwriter for your IPO. They can take you from idea to exit.

[dcow]

AFAIU this only happened when taking out "loans" from SVB and it's not a general practice to add banking stipulations to terms sheets.

[commandersaki]

Even Bernie Madoff had $5B sitting in a Chase Bank account.

[mise_en_place]

Brex is way better compared to SVB. SVB had these weird mountains of paperwork when I had to use them for my startup back in 2017. Brex onboarding was instantaneous for my small business.