In the wake of the current wave of bank failures, one of the startups I currently work with — a Silicon Valley Bank (SVB) customer — recently applied to open an account with a major money center bank. The bank came back with a long list of objections and ultimately declined to open even a basic banking account. Reasons given were: the startup was not 100% U.S. owned, had a foreign-born CEO, and had a senior manager residing outside the U.S. The startup was denied even though it is very well capitalized with a CEO residing in the U.S., has many large U.S. customers, and has a very promising future.
What Silicon Valley Bank Did Right
It became a fixture among startups because it understood their needs better than other banks.
March 24, 2023
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Summary.
There’s a reason Silicon Valley Bank became such a fixture among startups: it understood their needs better than any other bank. Even now, many banks don’t have the flexibility and understanding to make banking easy for startups. With SVB gone, a lot of young companies will find it harder to manage their finances.