[HN Gopher] My startup banking story
___________________________________________________________________
My startup banking story
Author : cdme
Score : 569 points
Date : 2023-03-14 20:28 UTC (1 days ago)
(HTM) web link (mitchellh.com)
(TXT) w3m dump (mitchellh.com)
| asah wrote:
| -1000.
|
| Of course your banker calls - in fact, what OP should've done is
| email the banker beforehand, "headsup: big day! We just closed
| our series A financing with <fund>. I've got $x coming in by
| wire." and they respond "congrats, I'll be on the lookout for
| it." You don't want to surprise your TradFi bank or banker, and
| you do want to "build a relationship" with them.
|
| The WHOLE POINT and the key feature of TradFi banking is the
| personal relationship. No, you don't need to invite your banker
| to your kid's graduation. But yes, spend 15 minutes playing get-
| to-know-you in an RL branch, talk a little about the business
| (source of funds, what you do, types of customers, etc), bring
| them treats you know they like (important: must be tiny$) and
| then when Stuff Happens or You Need Something, the banker is
| suddenly your ally in dealing with the banking system. Remember,
| when you deposit $1M+ you're now part of "the club" and the bank
| and banking system is there to help you.
|
| I've had a private bankers at multiple institutions for decades
| and have numerous stories where they untangled messes, worked
| around the pandemic, helped me "skip the line" and more. Friends
| tell me about wasting hours on banking issues but I've rarely
| experienced that, thanks to my private bankers. When things do
| get messed up, my banker explains what's going on, e.g. "yeah
| it's stupid and affecting other customers too - bank policy is
| ridiculous this year, but I'm sure they'll fix it because
| everybody's complaining and threatening to leave." And sure
| enough, a few months later it's fixed. Like Google, you report
| serious bugs and then wait, and if the fix is feasible and
| affecting other people, they eventually get fixed.
|
| There are downsides: bankers are human and don't work 24x7x365 so
| you need to also make friends with the branch manager or an
| assistant, and of course TradFi isn't crypto and you can't
| transact at certain times/days, e.g. wire cutoff deadlines. Also,
| bankers retire, get promoted, move branches, etc so you need to
| plan to rebuild the relationship every 5-10 years. Finally,
| bankers vary in quality and "fit" - if you don't get someone you
| like, ask around. I once had a kickass banker but she switched
| branches and her replacement was too junior to help me, so I
| begged a little and got my account reassigned to her & her branch
| and life is good again.
|
| tl;dr: TradFi is your friend if you play by its rules and work
| the system.
|
| DM me for intro to a kickass Chase banker - direct referral in
| NYC, otherwise she'll refer you (so far, her referrals have been
| solid, but YMMV by location)
| elijaht wrote:
| I mean, it sounds like the article is describing this, right?
| My takeaway was that the author didn't effectively handle their
| interaction with the banking system. The consequences seemed to
| be minimal in this case, but the takeaway for me was that
| interacting with the system as expected probably offers these
| benefits you describe.
| emddudley wrote:
| You expect a 22 year old to know this? How was Mitchell
| supposed to have discovered this?
| welder wrote:
| > For over a year, someone had been wiring thousands of dollars
| out every few weeks.
|
| How's this even possible? Anyone can wire out money from any bank
| account without authorization?
| quickthrower2 wrote:
| The oddest thing to me is being given round after round of cash,
| and not needing it. Sure it could be 'invested' in an index or
| something. But wasn't it meant to be 'invested' in the actual
| startup?
| [deleted]
| nodesocket wrote:
| What a crazy story, love it. I'm a HashiCorp shareholder and was
| quite concerned about their SVB exposure as I was pretty sure
| they banked with them. Thankfully it worked out, at least thus
| far.
| quickthrower2 wrote:
| Yeah that share hasn't been performing :-(
| kevmo314 wrote:
| > For over a year, someone had been wiring thousands of dollars
| out every few weeks. We were short over $100,000 due to fraud.
|
| Did the VP of Finance point out the ridiculous amount of lost
| interest by keeping $35M idly sitting as cash? Definitely a lot
| more than $100k.
| jaclaz wrote:
| The VP of finance is the same one that took two years + to
| realize (through an internal audit) that some 1,100,000 worth
| of invoice payments were paid on that account instead of the
| main one.
|
| This makes little sense, bordering to impossible, pairing
| invoices and payments received is weekly or at most monthly
| routine.
| renonce wrote:
| Interest rate between 2008 and 2015 was around 0.1% per year.
| Not much I think.
| [deleted]
| jacknews wrote:
| I don't get it, what was the big problem? Just that 35M is a big
| deal to a local bank branch?
| dharmab wrote:
| Traditional banks' risk models don't work well for startups.
| SVB was more willing to work with startups, e.g. accepting
| shares as collateral
| gaadd33 wrote:
| I don't think that's relevant to the post though. It's
| essentially saying that a big bank has bankers that want to
| check on accounts once they get large enough and he didn't
| understand that
| janandonly wrote:
| American banking stories always read as an '90 comedy to me, as a
| European.
|
| Furthermore, once I visited Philadelphia, and I saw several
| people standing in queue. I asked what restaurant or place that
| was. My driver said it's where people wait in line to pay their
| rent. He did not laugh. That was not a joke. People do that for
| real in the USA.
| smcl wrote:
| I think it can vary greatly in Europe, though. I know my friend
| (in the 2010s) had a bit of a culture shock trying to deal with
| how old-fashioned banking was in Italy, having previously only
| lived in the UK.
|
| And it goes both ways, there are things here that Americans
| would think are a bit backwards. Like if I'm ordering something
| online here in Czech Republic it's really common to allow
| payment via direct bank transfer - i.e. they'll give you a bank
| account number and a _variabilni cislo_ ( "variable number" - a
| way they can identify the payment on their end), you make the
| transfer using these values and they'll send out the order when
| they confirm they received the payment. Nowadays a QR code will
| often be generated for this and you'll just scan it in your
| banking app, but it could seem a little backwards if you're
| used to paying via debit/credit card.
| chinchilla2020 wrote:
| I've never heard of that happening in the US before this post.
|
| Every apartment I've ever heard of does it through automatic
| bank draft.
|
| Are you sure this guy wasn't pranking you? It's Philly and they
| are known for being sarcastic.
| ThunderSizzle wrote:
| People also do not do that for real in the USA.
|
| However, most of that is probably explained by the cash crowd
| trying to avoid taxes. Of course, if income taxes were minimal,
| there would be less effort to avoid it.
|
| Also, cash doesn't show up when doing welfare checks against
| your bank accounts. To receive food stamps, you can't have more
| than $2000 in your bank accounts combined at any point.
| ubermonkey wrote:
| That's ... wild. Most of my friends who rent where I live
| (Houston) pay their rent through an automatic bank draft.
| jll29 wrote:
| In Venezuela, people pay their rent in the bank branch in cash,
| often from a bag hanging around the tenant's neck and spacious
| enough to accommodate the substantial inflation. Then a photo
| and fingerprints are taken from the depositor (every month!).
|
| The capital Caracas has a tunnel, in which gangs often stop
| cars and shoot through the window (cost of bullet = $0.10) in
| order to collect any change the driver or other passengers may
| hold - if someone was on their way to pay the monthly rent at
| the bank it would be their lucky day, but if the driver had
| just $20 in their wallet, it's still a profit of $19.90 minus
| the cost of the assassin's time.
|
| Good there are electronic standing orders in most countries.
| RektBoy wrote:
| How the fck is this possible in US? Try similar things in EU and
| you would have police commando waiting for you in wrecked
| offices. Because this would be viewed as major fraudulent
| activity. No reporting, no nothing.
|
| Also why some random guy in random small branch is responsible
| for money on the account? Here, nobody cares. You close the
| account, ok no problem see ya.
| dave333 wrote:
| My Dad was in banking in the UK and told stories about inter-bank
| transfers in London in the 1930s that were effected by two low
| level employees physically exchanging documents. He said he was
| always very careful to get a firm grip on the receivable
| briefcase before releasing his grip on the deliverables.
| walrus01 wrote:
| Bearer bonds?
| linksnapzz wrote:
| Or actual bills. In the US, at that time, the Federal Reserve
| used to issue $10000 && $100000 notes exclusively for
| settlements between member banks.
| ghiculescu wrote:
| I've had plenty of debates about SVB where a key argument is "the
| bank's depositors should have known better!"
|
| This kid is now a billionaire(?). I think this is a good example
| of the financial acumen of a typical SVB customer.
|
| I don't say this to promote or defend a bail out. To me it says
| that if we are regulating the system to protect deposits, we
| should come up with rules that actually work. For better or for
| worse, a bank is a bank is a bank is how most people see it.
| anonymousiam wrote:
| Historically, the FDIC was intended to protect consumer
| banking. $250k was enough coverage for most consumers, and
| consumers with more than that (back then) probably had an
| accountant savvy enough to know better than to keep all the
| eggs in one basket. The same goes for businesses (including
| startups). The SVB crash was a wake-up call for businesses that
| were careless with their finances, and they were lucky to get a
| (unprecedented) bail-out from an administration with an
| interest in their success.
| shapefrog wrote:
| They were lucky it was a slow motion car crash, and the FDIC
| stepped in before the losses wiped out any customer funds.
| quickthrower2 wrote:
| Yes and how does one do due diligence on a bank anyway?
| ghiculescu wrote:
| That is possible. Here's an example: https://twitter.com/Ragi
| ngVentures/status/161582608803847373...
|
| But I think it's beyond the ability of many.
| vkou wrote:
| It's possible, just like it's possible to do a detailed
| food safety inspection on every single thing you bring home
| from the grocery, but why would anyone want to live in a
| buyer-beware world where that is expected?
| vkou wrote:
| > I don't say this to promote or defend a bail out. To me it
| says that if we are regulating the system to protect deposits,
| we should come up with rules that actually work.
|
| For the most part, they do. The government made it very clear
| last weekend that deposits are sacred, but the executives and
| the shareholders will be taken out back and shot if they are
| caught doing risky things. (Signature bank was seized, and it
| wasn't even insolvent.)
| ghiculescu wrote:
| They had to change the rules to do so (from 250k, to
| infinite). That's why so many people are understandably
| angry.
| dcow wrote:
| We actually don't know if the rules changed. The rules are
| that the FDIC covers up to 250k in losses for each account.
| The SVB that the FDIC now controls still has valuable
| assets which likely cover the accounts as designed. Or at
| least get close enough that the the difference is marginal.
| Rapzid wrote:
| Consumer protection is part of the FDIC mission; not
| holding some imaginary, sacred 250k line. The 250k dollar
| insurance is a means to an end and not a traditional
| insurance business.
|
| People are angry because (they are being convinced)
| somebody is getting a hand-out that isn't them and they
| haven't personally deemed worthy. Just like people get
| angry over the idea of free healthcare going to immigrants
| and college loan forgiveness going to.. Whoever.
|
| That's not even what's happening because the FDIC, now in
| control of SVBs assets, are going to use those assets to
| balance the books. They have the liquidity to guarantee
| depositors funds while they wait for the loans and bonds to
| reach maturity.
| vkou wrote:
| People are angry because bank executives and shareholders
| ate all the losses, and the depositors were rescued at no
| net cost to the taxpayer?
|
| What would make those people happy, exactly, and why should
| anyone care about their happiness? I rather like living in
| a world where from the perspective of the end user, my
| money doesn't disappear because some moron five steps
| removed from me decided to YOLO the bank on 10-year
| treasuries.
|
| I also, for similar reasons, like living in a world where I
| don't need to personally test all my produce for e.coli
| contamination, or my food coloring for cadmium.
| ghiculescu wrote:
| They are, because the rules changed.
|
| Your metaphor isn't very good but you'd be upset if
| someone was found to be circumventing food safety rules
| and poisoning food, and the government changed the rules
| to avoid them going out of business.
| vkou wrote:
| The government _put_ them out of business for poisoning
| my food. That 's exactly what happened to SVB and
| Signature. They are gone. Dead. Wiped out. Seized. All
| the people responsible for mismanaging those banks are
| now broke. [1][2]
|
| And made _me_ , the depositors, the people impacted by
| that bad behaviour whole.
|
| Again, what exactly is the problem, here? Which bad
| outcomes have the changes to the rules produced?
|
| [1] Well, the C-suite isn't, but they are all going to be
| sued by the investors that lost money due to their bad
| management.
|
| [2] Once the FDIC finishes picking through their carcass,
| if there's any value left (Possible for Silvergate),
| those groups might get pennies on the dollar.
| ghiculescu wrote:
| Time will tell. I suspect banks will be more reckless
| because of this. There's less incentive to protect
| deposits if they are all guaranteed, and more incentive
| to make risky bets.
|
| But it's also a principled point. If you believe that
| rules don't matter as long as you like the outcome,
| that's a bad way to run a society.
| Rapzid wrote:
| > If you believe that rules don't matter as long as you
| like the outcome, that's a bad way to run a society.
|
| What rules were broken? Tell us, what are the rules the
| FDIC operate under?
| vkou wrote:
| > I suspect banks will be more reckless because of this.
|
| Could you outline under what mechanism other banks will
| look at what happened to Signature and SVB, and conclude
| that they should engage in behavior that's likely to get
| them seized, and their equity zeroed out?
|
| > If you believe that rules don't matter as long as you
| like the outcome, that's a bad way to run a society.
|
| There was no rule that _capped_ recoupable deposits at
| $250,000. There was simply a rule that guaranteed them up
| _to_ $250,000.
|
| Also, if your rules result in puppies being regularly
| pushed into the puppy-shredder, and depositors routinely
| losing their money through no fault of their own, that's
| also a bad way to run a society.
|
| You know what's a good way to run a society? Retail banks
| being a boring, dumb, stable, reliable service.
| hn_throwaway_99 wrote:
| > I think this is a good example of the financial acumen of a
| typical SVB customer.
|
| While I totally wouldn't expect _startup founders_ to behave
| hardly any different than Hashimoto, I would expect _VCs_ to
| have done a much better job helping their startups do cash
| management. I mean, isn 't that a pitch so many VCs give, in
| that it's not just "we give you money", but we also help
| connect you with experts for different parts of the business?
|
| Even for pure self interest, if VCs are going to write a "kid"
| a check for $10 million, wouldn't they want to ensure it was
| properly safeguarded?
|
| Regardless of the above, I 100% agree with your "we should come
| up with rules that actually work" statement.
| chernevik wrote:
| This. VCs advise their portfolio companies on any number of
| mundane business arrangements and cash management should on
| that list.
|
| I strongly suspect that SVB's relations with the VCs
| interfered with this obvious item.
| ghiculescu wrote:
| If your point is that despite what they'll pitch you, most
| VCs are just dumb money, you won't get any debate from me :)
| zamnos wrote:
| Yes, back in 2021.
|
| > Hashimoto, the original CEO, is a new billionaire, worth $1.2
| billion based on the IPO price.
|
| https://www.forbes.com/sites/kenrickcai/2021/12/09/hashicorp...
| thwayunion wrote:
| One of my landlords was a guy like "Alex", and had a similar
| fate.
|
| I can't say I shed a single tear for him or Alex. What services
| did Alex render in this story to justify being a "rising star"?
| That one account likely earned him significant compensation --
| multiples of what I made doing 80 hour weeks in my 20s at 20k/yr
| -- for a significant chunk of his earning career. For what? A few
| phone calls to someone who didn't want to be contacted.
|
| The rent seeking component of the American economy needs to be
| competed out of existence. Their margin is everyone else's broken
| back.
| brandonmenc wrote:
| [dead]
| intelVISA wrote:
| Big corps (like HashiCorp) make their margins on SWE and FOSS'
| backs - do you owe them the same ire as landlords?
| dilyevsky wrote:
| > Big corps (like HashiCorp) make their margins on SWE and
| FOSS' backs
|
| You've managed to be simultaneously very right and so wrong
| thwayunion wrote:
| _> Big corps (like HashiCorp) make their margins on SWE and
| FOSS ' backs - do you owe them the same ire as landlords?_
|
| I don't have much respect for people who make their living
| off of capital rather than labor.
| x-complexity wrote:
| > Big corps (like HashiCorp) make their margins on SWE and
| FOSS' backs - do you owe them the same ire as landlords?
|
| There is a false equivalency made here, in that it assumes
| that the debate regarding labor & the debate regarding
| capital are interchangeable.
|
| Landlords (& possibly account managers like "Alex") derive
| their compensation from the maintenance & management of the
| capital's safety & utility: The quality of said capital
| (whether cash or real estate) should remain constant if they
| did their job. The debate enters in when the capital
| owners/managers put in little documented effort & receive
| large compensations in response.
|
| For Software Corps, their compensations are derived from
| difference between the value created from the creative,
| technical, & outreach labor put in from their SWEs,
| designers, marketers, etc., and the cost of compensating that
| labor + maintaining the necessary equipment to make the labor
| usable. For this, the debate enters in on how much they
| should be compensated for the labor put in.
|
| The two debates are not strictly equal.
| the_gipsy wrote:
| OSS contributors compare to some bank middle manager in what
| way?
| csomar wrote:
| HashiCorp is one of the most Open Source friendly companies
| out there. Most of their stack is open sourced, open, and
| very fairly licensed. I'd say HashiCorp is an exemplar.
| pepy wrote:
| Alex did nothing to get that account, he did not put any
| meaningful effort into better that client's experience and did
| nothing to lose it.
|
| It was all outside of his actions and any benefit he received
| was purely accidental.
| balls187 wrote:
| > What services did Alex render in this story to justify being
| a "rising star"
|
| He didn't.
|
| What is perhaps a touch of poetry is the author learning (the
| hardway) about the lessons with managing large amounts of cash,
| while simultaneously learning the hardway about being a
| customer account manager.
|
| As another commenter wrote, Alex blew his opportunity.
| swatcoder wrote:
| For a more traditional small businesses, Alex would be helpful
| in opening a line of credit, setting up payroll through the
| bank's system, suggesting a money market account or CD rotation
| to park cash, etc -- all with a personal familiarity with you
| and your business, while genuinely invested in helping it
| financially grow (because that's good for the bank).
|
| Having a good banker that you trust is very helpful when you're
| running a small/local business or bootstrapping.
|
| And yes, just like an B2B SaaS or freemium game that gets lucky
| and lands a low-maintenance whale, a banker can _sometimes_
| earn a lot for doing very little. But that occasional exception
| doesn't mean that they're useless and "need to be competed out
| of business"
| jojobas wrote:
| A more traditional small business would have some assets
| other than whiteboard scribbles and slide decks, and life
| expectancy of more than a couple of years.
| duxup wrote:
| I remember when I bought my first house someone told me to make
| an appointment to get the cashiers check for the closing day.
|
| I assume it was semi related as you want to be sure they are
| ready for you / have the money on hand for you to issue the
| check.
|
| Not that they wouldn't have the money but depending on some
| else(s) showing up looking to empty the local branch
| inadvertently... you want to be sure they got you covered.
| yesimahuman wrote:
| I don't know why the author cringes so much or feels like they
| made mistakes. You don't owe Chase anything, it's on them to earn
| your business and treat you like the major account you are. We
| had a similar situation and Chase treated us poorly, ultimately
| denying my wife and I a relatively small home mortgage, despite
| having millions in a business account with them. I will never
| forget how they made us feel. All I see in this story is more
| cluelessness from Chase, not any mistakes by the author.
|
| They've been chasing our business ever since we moved to SVB post
| Series A. They're going to get it since we wired our money out of
| SVB today (not my decision), but do they deserve it? Absolutely
| not.
| gaadd33 wrote:
| How could have Chase earned their business better when the
| person on the account says everything is fine and gets off the
| phone as fast as possible? I'm pretty sure more phone calls
| would have soured things. If the author was saying that chase
| then turned them down for a loan or something, sure that would
| be comparable.
| lmm wrote:
| Give better information by email, something that doesn't
| interrupt me and make me deal with it right now?
|
| Other than that, it's not clear from this story why they
| chose Silicon Valley Bank - it sounds like this VP of Finance
| is the person who could explain what (if anything) they did
| better than Chase.
| manigandham wrote:
| Most people (especially here) would find those emails to be
| spam and never read them. Is that seriously your
| suggestion?
| lmm wrote:
| Spammy emails are somewhat annoying, but they're 10x
| better than spammy phone calls. Any company that wants me
| to do things over the phone will drop right to the bottom
| of my list, especially if they want to do it by them
| calling me rather than me calling them.
| re-thc wrote:
| Maybe offer assistance or discounts or anything else?
|
| The usual emails of credit cards, better interest on savings
| (money sat in the account for nothing) or others if it didn't
| happen?
|
| At least from the recount there was no mention of e.g. we
| realised you're a big customer and we have some special
| packages for you. Services like AWS would immediate assign an
| account manager, want to know you more and offer training,
| assistance and all sorts of things and not just when you make
| a transfer.
| jbverschoor wrote:
| By having an actual conversation with open questions? Showing
| interest in your client?
| underdeserver wrote:
| Instead of asking if everything was okay, and could they do
| something for them, Alex should have said something like:
|
| "Hi, are you actually a startup? Because with a regular
| business account you're missing out on a lot of money. I
| would very much like to schedule a few minutes with your CFO
| and talk over what could be done."
|
| Maybe he bites maybe he doesn't, but he's no longer so naive.
| dcow wrote:
| You don't plop 35MM into a single bank account and sit on it.
| The cringe isn't about feeling bad for Chase. It's about
| watching a 22 year old learn how to manage incredible amounts
| of cash.
| jojobas wrote:
| Are startups expected to hire a guy to stage fixed-term
| deposits across multiple banks and gamble on stocks and
| foreign exchange?
|
| Pretty sure they are not.
| kyawzazaw wrote:
| some are doing laddered treasury bills
| zer00eyz wrote:
| Depends on how big you are.
|
| If your first friend at any company isn't someone in
| accounting your doing it wrong.
|
| Good accounting is not something you outsource, and a good
| accounting team is worth their weight in gold.
|
| If your concerned about exchange rates, you better have
| competent folks in accounting.
| mcherm wrote:
| > Good accounting is not something you outsource
|
| I'm happy to believe you on that point, but can you
| explain WHY? It appears to me that accounting is the
| exact type of generalized skill with well-established
| standards that makes sense to outsource.
| jojobas wrote:
| You might be confusing accounting with financial
| management. Accounting is outsourced by nearly 100% of
| startups.
|
| Financial management for startups with respect to "how
| big you are" is almost always "not big enough" until you
| have tens of millions. Both seed and series a are usually
| to be spent within a couple of years and hiring a full
| time financial manager to represent 5%-10% of payroll is
| just not worth it, he won't recoup his salary even by
| excellent trickery.
| jbverschoor wrote:
| All the same right? Something with money and numbers.
|
| Just like everybody in tech is doing something with
| computers and writing code
| jojobas wrote:
| Oh you're a software developer? Can you fix my
| dishwasher?
| jbverschoor wrote:
| Be careful what jokes you make about samsung iot
| appliances
| TimTheTinker wrote:
| Accountants should be the ones _running_ the companies.
| Mine is run by them, and it 's great. There are some
| incredible perks, like always knowing the company is
| financially in a very good place and taking appropriate
| risks, a culture of transparency and collaboration ... I
| could go on.
| zamnos wrote:
| First time I've heard a positive review about a company
| being run by the bean counters, who are generally more
| known for being brought in and cutting tiny luxuries
| which don't generate money or make financial sense, like
| free sodas in the break room.
| [deleted]
| gcr wrote:
| "Being brought in" could be the crucial difference, yeah?
| When a company starts with beans on staff from the start,
| maybe there's more of a sense of security
| TimTheTinker wrote:
| They're accountants, but I wouldn't call them "bean
| counters". They have a vision for the office of the CFO,
| and it's that the accounting team rises above mere bean
| counting into financial leadership.
|
| The company was also a VC-backed startup and is on the
| road to IPO, so it's run like an investment, not a cost
| center -- and hiring and keeping great employees is a
| priority. The perks and benefits are really great. It has
| won awards for the last ~5 years for being the "best
| company to work for in $region".
| csomar wrote:
| Being focused on his startup instead of maximizing the yield
| of these $35M allowed him to turn it into a $5.5Bn company.
| dcow wrote:
| There's a difference between maximizing yields and
| diversifying risk. I'm talking about diversifying risk. The
| yield is the company's equity.
| vinay_ys wrote:
| This. It applies in personal life too.
|
| In the post covid world, I find many young engineers fall
| into the trap of squeezing more yield out of their meagre
| savings early in their career through financial engineering
| rather than focusing on their personal development and
| growing in their actual professional lives.
|
| All the amateur investors who made big returns in the
| 2020-22 period and thought they figured it out will now
| have a hard time making sense of the markets in the new
| regime of high interest rates.
| dcow wrote:
| But it's not bad to diversify risk early on and have a
| plan for that. High yield savings accounts and treasury
| notes are standard practice. We're not talking about
| founders taking moonshots in the market. We're talking
| about $35MM in a bank account that doesn't even match
| inflation.
| dcow wrote:
| To put that into perspective. That's $1MM a year (at %3
| inflation) going into the toilet just because you don't
| want to do some minimal cash management. You could hire a
| CFO for that price and it would pay for itself 3 times
| over. I mean I get the vibe and totally agree that you
| don't want to overthink things. But I also think it's
| easy to underestimate the value you're leaving on the
| table and the risk you're exposing yourself to by not
| giving it _any_ thought.
| ygouzerh wrote:
| Definitely! They forgot that there are two type of
| revenues for a company, and that it can be applied for
| personal finance as well :
|
| Operational revenues : the real job, the thing that is
| making money. The yield on the operational one is
|
| Financial revenues : cash sitting around non-invested yet
| into operations, waiting for the next project to invest
| in.
|
| The yield on the operational revenues is much higher and
| the investment in it could be transposed as for example :
| spending for some certifications, go to online or
| physical classes, etc
| ashwagary wrote:
| >All the amateur investors who made big returns in the
| 2020-22 period and thought they figured it out
|
| Chasing big returns generally leads to massive losses so
| I cant fault people for sitting in cash but I dont
| recommend taking inflation lightly. The least one should
| do is beat that hurdle rate and conserve value.
| remus wrote:
| > Being focused on his startup instead of maximizing the
| yield of these $35M allowed him to turn it into a $5.5Bn
| company.
|
| In this case. I'd bet there are more than a few startups
| who would have survived if they'd spent a few hours on the
| phone with their bank to help manage funding cash more
| efficiently.
| gen220 wrote:
| The cringe isn't that he failed to maximize yield, it's
| that he failed to protect that $35m from tail risks, by
| parking the lion's share of it in T-bills.
|
| "Maximizing yield" would mean earning a few % annually in
| interest. "Minimizing insolvency risk" means paying a few %
| to ensure it doesn't go to (effectively) zero in an SVB-
| like situation, and requires literally a day or two of
| work.
|
| However, it's difficult to fault Mitchell for knowing these
| things. It sounds like the VP of Finance was brought in at
| the right time (Series B), and did the right things.
|
| With what Mitchell knows now, and especially given the
| industry's recent experience at SVB, I'd guess that he
| would advise any young founders he works with to cover this
| base at their own companies even earlier than he did.
| zamnos wrote:
| With the resulting 15,714% return over 11 years, the guy
| could be forgiven for getting 0% on cash on the $35m at the
| time. Theres a real opportunity cost if you were to spend
| your time optimizing your return on $35m of cash via
| financial instruments instead of running your startup.
| bmmayer1 wrote:
| Agreed with this. The story written from Alex's perspective
| would probably be: "how I blew a once in a lifetime shot to be
| the best business banker in America but I took the opportunity
| for granted."
| twelve40 wrote:
| > chasing our business
|
| i see what you did there
| stephen_g wrote:
| Yeah, it seems super weird this Alex guy didn't just send them
| some kind of brochure or information of "These are all the
| services Chase offers to businesses, give us a call".
|
| Also, the implication that the Alex guy was fired or something
| because a customer decided to switch banks seems to only
| indicate that Chase has a toxic internal culture. Customers
| switching banks is not unheard of...
| JumpCrisscross wrote:
| > _didn 't just send them some kind of brochure or
| information of "These are all the services Chase offers to
| businesses, give us a call"_
|
| It wouldn't be read and now Alex is spamming him.
| tedunangst wrote:
| What more was Chase expected to do here? What would treating
| Hashicorp as a major account have entailed? A phone call to
| find out what else was needed?
| yesimahuman wrote:
| In our experience there was so much they could have done. I
| just compare it to our experience with SVB which got us no-
| personal guarantee credit cards, availability of venture
| debt, access to mortgages (something I would have done if a
| local credit union hadn't stepped up). Chase never did any of
| those things with us. They need to step it way up if they
| want to win startup business long term and not just in the
| wake of a crisis.
| kyawzazaw wrote:
| all this partially incentivized startups founders/execs to
| stay private imo
| jacobsenscott wrote:
| Well, chase won't lose your money, which sort of trumps all
| of that.
| zamnos wrote:
| To be fair, neither has DINB
| yesimahuman wrote:
| Very fair. Let's hope JPM doesn't rest on their laurels
| here and can actually learn how to serve startups,
| because they have a long ways to go still
| thebradbain wrote:
| If you have enough assets, Chase will absolutely lend
| against that collateral.
|
| "Enough" is likely the key word. But if you have business
| or personal accounts with over a couple million (and
| certainly $10+ million), I would be shocked if someone
| higher up than a clerk hadn't personally reached out to
| you, tried to take you out to coffee, and let you know
| the perks applicable to your personal situation they can
| provide you that you can't find on a website.
|
| Sure, they likely weren't as enticing as SVB's perks nor
| as willing to lend to an account that had $0 yesterday
| and millions the next, but they absolutely will offer
| personal loans/mortgages against stock compensation on
| the guarantee you keep your account with them above a
| certain threshold, etc.
| robertlagrant wrote:
| I'm surprised no one is publishing tiered perks/pricing
| on a website for founders to browse. That's how they like
| to interact.
| thebradbain wrote:
| Similar to the reason mortgage APR will differ among
| seemingly similar homebuyers at the same point in time
| (and even then, only after you actually send over your
| financial documentation can you see your rate), my guess
| would be one can't exist because everything is based upon
| not just the financial situation of the bankee but also
| (as we've seen with SVB) the banker.
| mikeyouse wrote:
| Many of the West Coast "Chase" branches and operations
| are just rebranded WaMu ones from when they collapsed
| during the GFC. Probably the new JPM Chase won't lose
| your money but the predecessor came pretty close.
| 8ytecoder wrote:
| Yup, you can check the routing numbers to find this out.
| I haven't dealt with east coast Chase but I'd be willing
| to bet it's a completely different experience.
| naet wrote:
| I would expect them to say hey, now that you've got so much
| more capital in your account I'd like to set up a short
| meeting to learn more about your company. Then they meet with
| you, learn a bit about your business trajectory (for their
| own planning) and pitch some significantly increased benefits
| to keep you around.
| tedunangst wrote:
| And what if I say yeah, thanks, whatever, and try to end
| the call as quickly as possible?
| naet wrote:
| You don't have to accept, but they should at least
| actively try to bring you in if your account is a bug or
| important one.
|
| There are plenty of ways to get you in the conversational
| door like offering a better rate or to help protect the
| account.
|
| Eventually someone from hashicorp "...notices we have
| ~$35M sitting in cash in a Chase bank account. This is
| obviously not a smart thing to do, so he suggests some
| financial plans for how to better safeguard and utilize
| this mountain of cash". The bank could have been the
| party to preemptively explain this to the author, and if
| they did they might have been able to be a part of the
| solution (or at least try to negotiate for it) instead of
| losing the entire account.
|
| It sounds like the bank manager was being too delicate,
| asking the author if they had any banking needs when he
| didn't really think he had any. They should have been
| more blunt and said look dude you have a ton of money in
| here, you're probably not used to managing this amount of
| money, we need to take just a bit of time to discuss it
| and we'll make it easy and worth your while.
| donnythecroc wrote:
| Isn't the biggest thing here that he never spent any of the VC
| money of he had $35m in the bank he bootstrapped!!!!
| NSMutableSet wrote:
| What happens if you don't actually spend VC money? Do they
| still get partial ownership?
|
| This is the first time I hear of a situation like this, and I'm
| really curious.
| lmm wrote:
| > What happens if you don't actually spend VC money? Do they
| still get partial ownership?
|
| Yes. Just like you still pay interest on a loan even if you
| just let the cash all sit in a bank account.
| jojobas wrote:
| A lot of banks will set up an offset account with your loan
| so you only pay interest on the money you use.
|
| A loan is fundamentally different from a share purchase
| though, you can try to buy back you shares but that would
| be a separate negotiation.
| NSMutableSet wrote:
| What's the reasoning for not using it?
| lmm wrote:
| I have no idea why Hashicorp didn't use it. The point is
| just that if you made a contract for something and they
| hold up their end, you've gotta hold up your end, even if
| you ended up not using what they provided.
| Kaotique wrote:
| How does that even happen? Don't they have salaries to pay or
| marketing campaigns to run, pay rent? How can he sit on a pile
| of money and still grow the business?
| mirker wrote:
| Being near profitable is the obvious way, though I find that
| surprising early on.
| a5seo wrote:
| 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.
| inconceivable wrote:
| 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 wrote:
| > 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 wrote:
| > 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 wrote:
| $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 wrote:
| Whether 650 is a lot or not is totally subjective. That's
| why banks normally have customer specific risk
| thresholds.
| inconceivable wrote:
| > $650 is a lot of money.
|
| no. it really isn't.
| notjtrig wrote:
| 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 wrote:
| When you have $1m revenue on the same bank account, why
| would they ever care about $650.
| [deleted]
| AdamN wrote:
| 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 wrote:
| > 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."
| kentonv wrote:
| 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.
| fatnoah wrote:
| > 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. ;)
| csomar wrote:
| 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.
| [deleted]
| kentonv wrote:
| 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.
| spoonjim wrote:
| You went with the bank that massaged your balls and almost
| lost your money because of it
| kentonv wrote:
| I was under the FDIC insurance limit so I was not at risk
| of losing my money.
| koolba wrote:
| We're you forced to use them as a bank as part of the funding
| agreement? Otherwise why put up with that crap?
| gerad wrote:
| 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).
| [deleted]
| rblatz wrote:
| 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.
| sanderjd wrote:
| 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.
| freddie_mercury wrote:
| Was it very poor?
|
| Other than a weekend of stress, what was the actual
| downside to a founder of using SVB?
| jjnoakes wrote:
| 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 wrote:
| 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.
| sanderjd wrote:
| I didn't know about this until reading things throughout
| this weekend (which is somewhat telling), but evidently
| there are a number of approaches that businesses use to
| avoid having essentially all of their money held as
| uninsured deposits in a single bank. Those approaches are
| the seatbelt that we seem to have largely chosen not to
| wear.
| vladgur wrote:
| You are referring to insured sweep accounts?
|
| It's also something that I have only learned this weekend
| although I was never in a position to need one
| sanderjd wrote:
| Yeah pretty much.
| sanderjd wrote:
| > _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.
| paulgb wrote:
| Although, things worked out in the end for depositors,
| likely in part because it _was_ a high-profile, "safe
| bet" bank.
| lazide wrote:
| 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 wrote:
| 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.
| dcow wrote:
| 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 wrote:
| Even Bernie Madoff had $5B sitting in a Chase Bank account.
| ghiculescu wrote:
| We chose to not use SVB because their online banking was so
| bad. Dodged a bullet.
| vinay_ys wrote:
| I find it weird/hilarious that the darling bank of tech
| startups in the heart of Silicon Valley has bad UX.
| mise_en_place wrote:
| 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.
| rietta wrote:
| The author must have never seen a rerun of Beverly Hill Billies
| growing up. The bank President was constantly courting the
| attention of Jed Clampett and his family!
| paultopia wrote:
| TBH, I don't really think that the author of this post screwed
| up. There's a lot of self-flagellation, but, ultimately, Chase
| offered accounts. The company used the services written on the
| tin. It's far from obvious that one needs to show up in person to
| close bank accounts. (I've certainly closed bank accounts without
| showing up in person, or, hah, at least I think I have.) It's far
| from obvious that a bank wouldn't be able to handle large amounts
| of money without confusedly celebrating and then condemning the
| poor fool who types the information into the computer. And
| ultimately, it all got fixed, and the only serious hitch to
| fixing it was the fact that for some weird-ass reason the bank
| had some rule that it couldn't issue a cashiers check unless
| there was a wad of cash that size in a particular branch, which
| is completely nutso given that 99.999999% of bank money is just
| bits anyway.
| mypalmike wrote:
| Yeah the "poor fool who types the information into the
| computer", or "Alex" in this case, is really the most
| enlightening thing in the story for me. It's amazing that this
| person who has exactly zero impact on account sizes... is
| rewarded for and takes credit for account sizes.
| re-thc wrote:
| Maybe he did in that he shouldn't have used Chase :p
| hummus_bae wrote:
| [dead]
| RulerOf wrote:
| Interesting story, but I've got to complain about the inset text
| boxes:
|
| > Someone out there is probably mentally screaming at me "you
| fool!" at this point.
|
| These are each clearly building up to "some explanation" of what
| the author should have done instead, indicating precisely what
| his foolish actions were and why. Perhaps we're just supposed to
| know that, but this is never directly explained in the story and
| I found it a little upsetting.
| A_D_E_P_T wrote:
| Same. I don't really understand what he did wrong, and it seems
| as though everything worked out okay in the end. As as for
| "lessons learned," I really don't know if there are any. Just
| an amusing story of Chase coming to grips with "startup
| banking" and the founder gaining some local notoriety.
| hmahncke wrote:
| I wonder how Alex and Alex's boss would tell this story?
|
| [edited below - because threaded comments can come across
| wrong]
|
| I wonder if how Alex's boss would tell this story is - my
| employee landed a $35m account, then failed to manage the
| account successfully, and when $35m walked out the door, we
| never understood what we did wrong
| Aeolun wrote:
| Yeah, but that's a problem with Chase, not a problem with
| the guy telling this story.
|
| I don't know about you, but it seemed fairly obvious to me
| that our protagonist didn't see the bank as anything other
| than a convenient stash of money.
| margalabargala wrote:
| Yeah, for sure. If anyone made a real "mistake" here, it
| was Alex, who failed spectacularly at managing the
| account.
|
| If our protagonist saw a bank as a convenient stash of
| money, then that's all it was for him. If it were to be
| anything else, Alex would have been the person who would
| inform him of that, something he clearly massively failed
| to do.
|
| If I happened to start a startup and be given a $35M
| check, I would do exactly what the person in this story
| did, for the same reasons, and unless a bank person told
| me otherwise I wouldn't think anything more of it. A bank
| is a bank is a bank until they demonstrate otherwise to
| their customer, not the other way around.
| op00to wrote:
| He didn't do anything legally wrong. He didn't consider the
| practical implications of deposit banking. For most of us our
| balances are low and things just work. Pulling $1M can be
| problematic if not planned in advance.
|
| Kinda what happened to SVB. They'd likely have been fine if
| they didn't tell people they needed money.
| swatcoder wrote:
| > I don't really understand what he did wrong
|
| He was just clueless to how banking worked at the time and
| how bankers expected to be involved with helping new clients
| gradually grow their banking relationship.
|
| He was a young kid who intuitively engaged in anonymous,
| electronic, modern banking before bank branches were really
| there themselves.
|
| To young people who came up after him, his intuitive way
| became more the norm -- especially for VC startups -- and the
| idea that you might buy your banker a bottle of nice whiskey
| for the holidays makes no sense. But for Alex, the banker,
| who had a kid come in and grow an account to $35M and then
| silently drain it without ever consulting with him, the whole
| experience was alien and absolutely bewildering.
|
| You can think of it as a culture clash or maybe a missed
| opportunity. More awkward than wrong.
| pjdesno wrote:
| By 2012, the banking industry had spent two or three
| decades educating customers to teach them that banking is
| an impersonal transaction which takes place via ATM
| machines and the internet, and never, ever, ever involves
| talking to a bank teller behind a counter. They've been
| trying to de-personalize banking since back when I got my
| first ATM card in 1983 or so.
| eropple wrote:
| _> They 've been trying to de-personalize banking since
| back when I got my first ATM card in 1983 or so._
|
| For personal banking, absolutely. But the property
| management business I bought, and then sold, had
| dedicated account managers at both banks we used, and
| both they (and the previous owner of my company) had an
| expectation of personal contact and fairly regular
| conversations--both because our customers also used those
| banks, but also just because _it 's the norm_.
|
| This was in 2020, for reference.
|
| Business banking isn't all startups.
| jldugger wrote:
| Yea, the story isn't how banking online is anonymous and
| magic, its about how branch banking is extremely
| regional, and how few of them deal with "pre money"
| startup financing, and were _structurally_ unprepared to
| handle it. "I have 35M but need to slowly spend it down
| until the next funding round" is not what most businesses
| in LA look like, and the cash infusion presumably allowed
| the bank to expand lending in the area, and business
| banking. And when those funds leave, well, there might
| even have been layoffs.
| bvanderveen wrote:
| The proper procedure for interacting with banks as a startup is
| knowledge that isn't meant to be disseminated. The entire point
| this piece is the asides: to make sure the uninitiated know
| their place by signalling over their heads. The initiated have
| nothing to learn here, it's just a funny story.
|
| Move along, citizen.
| [deleted]
| jacooper wrote:
| According to other comments here[1], he missed on a lot of cool
| stuff by not engaging with Alex, as usually multimillion dollar
| account managers have a very personal relationship with the CEO
| of that company.
|
| 1. https://news.ycombinator.com/item?id=35161313
| walrus01 wrote:
| But what if you don't want to have business dinners with
| people after work hours, don't play golf and don't have any
| kids for the name memorization?
|
| Anecdotally I've worked for a company that bought a lot of
| lasers. Like, really, a lot. Enough lasers to make the laser
| vendor fly our sales representative out to our city and hang
| out visiting us for a few days. They would offer to take the
| whole team out for dinner and drinks. It was just weird and
| uncomfortable. I have other things to be doing with my
| personal evening between 5:30 and 9pm.
| zie wrote:
| A good professional banker, would have helped with
| essentially every finance related issue the poster may have
| had. Including getting accounts more organized to help with
| earning more than the .01% banks usually pay for their
| checking accounts.
|
| It's like concierge banking, you get 1 person that will
| just make all of your bank and finance problems go away.
| You need a house loan, your person would just make it
| happen. You need financing, they can help with loans, going
| public, seed rounds whatever you need. They can also help
| you locate attorneys to help draft financial contracts,
| etc. Tax specialists that can help you minimize taxes, etc.
| There isn't much of a limit around both personal and
| business finance they wouldn't at least help get you
| pointed in a semi-sane direction with.
|
| Assuming Alex was any good, which clearly they weren't that
| good, since they did such a terrible job of explaining all
| they could offer to the blog post writer. That's partly on
| Chase, but probably mostly on Alex.
|
| We have a banker and I needed to buy a car recently, I told
| them my plans and they analyzed various payment
| options(loan, leasing, paying cash) and gave me a
| recommendation(just pay cash). When it came time to
| actually buy the car, the dealer wouldn't take a credit
| card for the entire cost, so my banker organized a cashiers
| check so I just walked into the closest local branch,
| picked up the check and was back at the dealer in 5
| minutes(not including travel time).
|
| Sure they can do the whole smooozhy mess as well if you
| really want that, but we don't, so my banker doesn't do any
| of those things with me. They know the sorts of charities
| and things I like, so if the bank ends up sponsoring
| something in my area, they will let me know and organize
| tickets or whatever if I wanted. I rarely do those sorts of
| events, but there are certain ones I like and my banker
| knows that and just organizes tickets and what not for
| those events once or twice a year that I like doing.
| myrandomcomment wrote:
| This is so true. Around 2015 I went to buy a house I the
| Bay Area. I was at a new startup and my income was quite
| low. I applied for mortgages but got turned down. Rules
| about income (your paycheck not balances) to payment were
| quite strict after 2008. To be clear I could write a
| check for the house. I call my money guy (I had a modest
| exit a few years before). He said, "I thought we talked
| about this at the start, but you need anything
| financially, legally, etc. you call me." 24 hours later I
| had a loan from a private bank that did not have to
| follow the rules because they did not sell the mortgages
| on. My advisor has a JD and a CFA and is worth every
| penny as I have neither of those.
|
| I have a new startup now and bank with Chase. I will say
| the banker asked the right questions, understood this was
| a startup and went into all they could offer. My biggest
| gripe with Chase that some above said SVB sorted, is the
| ability to get a credit card in a company name without
| being tied to personal, at the size we are.
| zie wrote:
| 100%, a good relationship with your banker makes
| financial issues a non issue. that's literally their job,
| make your financial issues non-issues.
|
| Obviously good relationships with good bankers only
| happen if you have sufficient assets that financial
| problems are not usually a lack of assets problem. :)
| Every bank will be different in the $$ amounts/assets you
| need to have to get access to the concierge banker pool.
| Also every bank has a different name for their
| private/concierge banking.
|
| Generally speaking $1M or more is sort of the minimum
| amount to have access to the banks good banker people.
| When you get into the 20-30M range, you can start
| thinking about sharing a private office with a few other
| people also in that range, and when you get into 100M or
| more you can think about starting your own private
| office, where you hire a full time money person or three
| to manage it all for you, and they will deal with the
| concierge bankers. Private/Family offices are sort of
| concierge banking plus. The Plus is, they will handle
| your entire family(however you choose to define it), they
| will teach you and your family whatever you need to know,
| they will handle budgets, paying bills all that stuff.
| They will sort out actually purchasing stuff, organizing
| trips, generally the sky is the limit here.
|
| At BOA, with $100k worth of assets you can get into
| Platinum Honors which is good banking, but not at the
| same level as concierge banking. I.e. you don't get
| access to private banking, but whenever you walk in or
| make an appt, the BOA person you get will generally do
| their best to make you happy. Chase has a similar sort of
| program I believe, but am unfamiliar with it.
| jmillikin wrote:
| > Perhaps we're just supposed to know that, but this is never
| > directly explained in the story and I found it a little
| upsetting.
|
| This might be an age / generational thing, but all of the
| issues described in the article are immediately obvious to
| people who grew up before internet banking.
|
| The default for business accounts in "traditional" banks is
| that they're handled by a specific named account manager, who
| is given the credit (or blame) for that account's growth over
| the years. So walking into some remote branch and opening an
| account will tie that account directly to the political success
| of whoever was sitting across the desk from you when you signed
| the paperwork.
|
| It's a failure mode that doesn't need an explanation to people
| who are the expected audience of the article. In software
| terms, imagine an article about launching an MVP that starts
| off with "so I copy-pasted some PHP from StackOveflow and ran
| it with default permissions in the same database that stores
| customer credit card details ...". There doesn't need to be a
| long digression about why that's bad.
| eCa wrote:
| There are people approaching their 40s who have never
| experienced pre-internet banking (as adults). Crazy times.
| walrus01 wrote:
| > will tie that account directly to the political success of
| whoever was sitting across the desk from you when you signed
| the paperwork.
|
| I don't think the end user of a bank's services can or should
| be expected to know about, or take this factor into
| consideration when choosing to close their account or
| drastically change how they use it, however.
|
| It's not personal, it's business, and to a certain extent any
| large US domestic bank is functionally equivalent to the
| other in features, fees and risk level.
|
| If I closed everything I have with Wells Fargo tomorrow and
| reopened it with BOA or Chase I would expect about the same
| functionality.
| swatcoder wrote:
| It's not the historical or national norm to be handed a $1M
| check, drop it into a bank account like birthday card
| money, and then conduct all your banking business
| digitally. Some of that's a startup thing and some of
| that's a generational modern thing.
|
| Traditionally, businesses establish relationships with
| their banker (a person), who helps steward their accounts,
| apply for loans, understand and pursue savings and
| investment options for held balances, etc
|
| Banking organizations are built around this very very long-
| standing model. There are processes and spreadsheets and
| powerpoints and dumb little mugs for high performers and
| all those things.
|
| Clearly, with the consolidation of banks and the
| pervasiveness of online banking, this is in the process of
| changing. This story captures one of those transitional
| moments, where a young kid with a startup is completely
| blind to what bankers expect to be doing.
|
| But your version of "how things are" is very contemporary,
| and wasn't quite the way of things when this story takes
| place.
| [deleted]
| fnbr wrote:
| I'm a naive techie. What, exactly, did Mitchell do wrong here?
| What could he have done better?
| ironic_otter wrote:
| I think all the replies here about people describing all their
| personal interactions with their banker is hiliarious. I'm in my
| 40s, started "banking" well before internet banking was a thing,
| and I still had no idea why the author was cringing at his
| naivety. Until the people here with actual money spelled it out
| for me. My banker never knew me from Adam, and my typical
| withdrawal was to buy ramen... Oh how the rest of you live!
| fakedang wrote:
| It's not the bank, it's the banker. Like seriously.
|
| When we were starting up, we were just a bunch of bright-eyed
| 18-year-olds, with nothing to our name, except $3000. We didn't
| know the basic shit about opening a business account and shopping
| around, so we went to the name-brand small private bank we could
| find that was "sexy", cold called them and explained our
| situation. We were all broke, still in college, no real revenue
| so to speak of, and the person handling the call literally did
| not know where to guide us (or she misunderstood us?), so she
| sent us off to a relationship manager, to whom we relayed our
| story. He told us to go look elsewhere.
|
| Actually, yeah, he told us to go look elsewhere because that bank
| was not suited to handling corporate accounts, but mostly private
| wealth management. And their minimum deposit was $200,000 for the
| basic accounts, with a $1 million being the usual expected
| deposit. Instead, he himself referred us to another bank, which
| gladly took us on, because of his referral. We thanked him so
| much, created our account, whatever.
|
| Fast forward to 3 years later, we sold the company and were flush
| with cash, so obviously y'all know to whom we went to handle our
| accounts. By then he was in a much larger bank. When he left that
| one for Credit Suisse, we all followed him. Over these years, he
| might have received a collective amount of more than $200 million
| in banking business from our relationship (not from our startup
| alone, other investments too).
| repiret wrote:
| I've always been shocked by how non-fungible branches of huge
| national banks are. "We can't give you a megabuck of cash because
| we don't keep that much in the vault" would make sense, but "we
| can't write a cashiers check for a megabuck because something
| about this branch" is bonkers. I keep a BofA account and every
| once in a while it somehow matters what branch I opened it in 15
| years ago.
| rwmj wrote:
| On the very rare occasions when I get a paper cheque, I still
| have to send it (thankfully, by post) to the branch where I
| opened the account nearly 50 years ago. This is at a reasonably
| large national bank, now owned by a huge international bank.
| It's pretty weird. Also I'm fairly sure they just scan it in to
| their computer, which I could do myself if the bank offered a
| functional app.
|
| The postscript to this is the bank has been closing branches
| left and right, so I imagine one day they'll close "mine" and
| then I don't know what I'll do with cheques. Hopefully they'll
| have finally died out by then.
| [deleted]
| flandish wrote:
| So a neat story ... but it trends like "newbie does big thing.
| Possibly messes up but is ok."
|
| Like a lot of people in startups.
|
| Some of which fail. Some due to svb. Some to other reasons.
|
| Same "newbie taking serious action" trend.
|
| Like 17/18 yo kids getting signed up with predatory college
| loans.
|
| We'll bail out capital owning class members... but those same
| folk laugh at the student loan cohort...
| theyknowitsxmas wrote:
| > the amount the cashier's check is made out for has to be
| available at that local branch (or, whichever branch issues it).
| And, well, local branches I guess don't usually have $1M cash
| lying around. Or, if they do, its not enough to cover other
| business activities for the day so they're not willing to part
| with it.
|
| I guess a flight to New York is worth it.
| op00to wrote:
| Banking with companies that understand your specific needs is
| worth a lot.
| ficklepickle wrote:
| Here's the twist: the closing of the Chase account led to Alex's
| career tanking. Thus began a downward spiral of his life. His
| wife left him and took the kids. He turned to the bottle and it
| got worse from there. He became indebted to the wrong people.
|
| It was then he remembered that Hashicorp account. When he was
| shown the door at Chase, the account had a few hundred grand in
| it. Through knowledge of internal procedures and some social
| engineering, he began fraudulently obtaining funds from the
| account. He hoped they had forgotten that the account existed. It
| must be pennies to those people, they shuffle around millions
| without batting an eye.
|
| Then, one day the cops show up at his seedy motel room. He was
| arrested for the fraud and found guilty. The judge was
| particularly heavy-handed and gave him 10 years, despite no
| priors.
|
| Alex kept a picture of the founder of Hashicorp on the wall of
| his cell all those years, blaming him for the turn his life took.
| He did push ups and other exercises to keep himself somewhat
| sane. All the while, dreaming of the day he would get out and
| take his revenge.
|
| Fast forward to today and Alex is recently released from prison.
| Biding his time, plotting his revenge...
|
| Alex spends a lot of time on hacker news, hate-reading about
| these startup types that ruin lives. Getting into the mind of his
| enemy. One last twist, Alex is me! /s
| [deleted]
| taskforcegemini wrote:
| by the time you got out you were an old boy
| xyst wrote:
| I approve this for a Hallmark film
| nwatson wrote:
| "The Year Santa Wore Orange"
| hef19898 wrote:
| Well, Hashicorp did more or less everything right. Except of
| building a working relationship with Chase in LA. Heck, the
| even conducted audits, and apparently no money was lost.
| recuter wrote:
| Hi Alex, I am a Hollywood producer working at a major motion
| picture studio responsible for films getting greenlit.
| Everybody around the office was buzzing about your idea as the
| basis for a potential screenplay and I was just about to offer
| you $750,000 for the story rights until an intern pointed to
| another story (we don't understand what most of the things
| discussed on your forum are) and we found out about this
| ChatGPT4 thing.
|
| A few phone calls later and with early access to their product
| acquired - suffice it to say we were able to generate more
| ideas of similar caliber than we know what to do with for $0.75
| and will be reevaluating our business practices going forward.
|
| I wish you best of luck on your murderous rampage.
| lawgimenez wrote:
| True Detective Season 5 then.
| shruubi wrote:
| I'll be honest, all these asides feel like there is some kind of
| explanation or big reveal that never comes. I can understand a
| bank identifying a large-sum account and wanting to look after
| them, being annoyed by that account moving banks as well as a
| local branch having to take precautions on such large
| withdrawals. But otherwise, I feel like I'm missing something
| here that isn't spelled out.
| brabel wrote:
| The only thing I was amused about was the fact that a 22 year
| old without any sort of work experience got 1 Million dollars
| just like that (and much more later on).
| benjaminwootton wrote:
| He turned it into a company that changed the industry and
| went public, so somebody made a good call.
| jmillikin wrote:
| The author is used to thinking of their bank account as an
| anonymous number, with operations handled impassively by
| whoever happens to be staffing the bank's reception desk that
| day. They probably never considered 35 million dollars to be an
| amount worth fussing over ("this is not a lot of money to a big
| bank, they'll barely notice").
|
| The bank thinks of multi-million dollar business accounts as a
| deeply personal relationship between the CEO and account
| manager, where the AM takes the CEO to fancy dinners and golf
| outings and remembers the names of the CEO's children.
| HashiCorp's account might have been the largest that had ever
| been opened at that particular branch.
|
| This article is an amusing(?) story about those two worldviews
| making contact.
| WWLink wrote:
| I admit I was laughing at the part where he transferred out
| the $35mil and Alex called him.
|
| Honestly I'm sure a lot of people on HN have experienced the
| "hey I just wanted to see how you were doing" call from their
| bank. Once you have >$100k in your chase accounts they'll
| start doing that.
|
| But why would anyone have that much money in their Chase
| accounts? I keep a nominal amount of money in my chase
| account and send the bulk of my money to fidelity to throw
| into whatever investment vehicle I like. Sadly, I think you
| need to have $1mil at fidelity to get the same red carpet
| treatment chase will give you for $100k.
| Rapzid wrote:
| > >$100k in your chase accounts they'll start doing that.
|
| Heh, not Wells Fargo.
|
| After 20 years being a customer and carrying very large
| deposits they will charge you for a cahiers check at the
| window. After you politely ask for it to be waived (having
| worked for the bank knowing they can waive it for you),
| being declined by the manager on duty who handled the
| escalation, and responding "I need the check but if you
| charge me for this I will close my account" to the question
| "Do you still want the check for the fee?"; then they will
| start calling you after the 10k daily transfers out start.
| kyawzazaw wrote:
| got called by a Chase branch manager once it was over 30k
| (2022)
| WWLink wrote:
| Hmm yea that doesn't surprise me. I really wasn't sure
| what the magic number was lol.
|
| Says a lot about the level of service my credit union
| gives lol. I've had more than that in my account before
| and they never gave me special treatment. XD
| Xcelerate wrote:
| > Once you have >$100k in your chase accounts they'll start
| doing that.
|
| Is there a good reason for this other than if you're about
| to buy a house or something? Most of my net worth is in
| investments; very little is in checking or savings, because
| it doesn't seem like there is any benefit to that.
| WWLink wrote:
| Nope. And that's part of why they start calling you - to
| sign you up for CDs, money market accounts, etc. (I'm not
| sure if they get a commission for selling you into a
| locked investment, but I imagine they do). They probably
| also are trying to get you on a good credit card, get a
| mortgage with them, be the first place you come when you
| want to buy a car, etc.
|
| I guess I'll note, I've never had that much in my
| personal account but I have a friend who did for a while
| (and a family member who also did). Personally, I
| canceled my chase account because a teller at the local
| branch was being a condescending dick to me. I assume
| because I didn't have that much money in my account lmao.
| stephencanon wrote:
| Checking is the backing buffer for a queue of pending
| transactions. If you have one or two highly-compensated
| people in your family, and somewhat randomly-distributed
| large expenses (paying cash for a car, renovating a
| house, credit card bills after a vacation, etc), then
| $100k does not seem like an unusually large buffer size.
| rhtgrg wrote:
| > Is there a good reason for this other than if you're
| about to buy a house or something?
|
| Liquidity. FDIC insurance upto $250k. Of course, you
| don't want to put a big chunk of your money into a bank
| like this, but $100k is not a "big chunk of your money"
| to a lot of people, in relative terms.
|
| I'm assuming your sentiment applies to HYSAs as well,
| which is the better place for this kind of thing.
| anonymousiam wrote:
| Having that kind of cash with Fidelity gives you a lot of
| perks, but you still need to keep an eye on them. My
| Fidelity guy is now a VP, but because of my balances he
| still handles my accounts personally. I've been with them
| for a while and my conclusion is that they are no better
| (and often worse) than I am at financial planning and
| wealth building. The economy is always changing, and the
| big sudden changes are the ones that usually catch everyone
| (including the experts) by surprise. What worked well five
| years ago doesn't work anymore. You'll never get the kind
| of attention and analysis from Fidelity (or any firm) that
| you can get from yourself if you are willing to put in the
| effort.
| UncleEntity wrote:
| > But why would anyone have that much money in their Chase
| accounts?
|
| They said in TFA they were just chugging along with the
| startup and didn't know any better until hiring a finance
| person.
|
| Obviously having $35m sitting in a bank account is less
| than optimal.
| jacooper wrote:
| Now I understand what's wrong, so he missed on a lot of cool
| stuff by just not engaging with Alex.
|
| Doesn't seem like that a big of deal, but a bummer for sure!
| jldugger wrote:
| It's more like "this Alex dude's entire career was at the
| whim of a naive young startup founder who was oblivious to
| this fact."
| op00to wrote:
| I'm thinking of that scene in Billy Madison where Steve
| Bucscemi is crossing names off a list. Poor Alex!
| hartator wrote:
| Yes, it seems very business as usual.
|
| I am more surprised about the founder lack of interest for bank
| and finance. It's fully in his duty to know where his investor
| money is. And he seems to be careless about it.
| Aeolun wrote:
| Knowing it is _all_ in a specific Chase account seems like a
| very simple way to always know exactly where your money is?
| jldugger wrote:
| "I know _exactly_ where the statue is"
| hartator wrote:
| I mean the part with hundreds of thousands of fraud for
| months.
| mypalmike wrote:
| By that point he wasn't in charge of finances.
| re-thc wrote:
| It makes sense considering he's gone from founder / CEO ->
| founder / CTO -> individual contributor i.e. probably never
| focused on these things and just wanted to build the product
| as an engineer.
| [deleted]
| twelve40 wrote:
| With so much dramatic build up I was fully expecting him to lose
| a bunch of money, but what followed was... nothing. Like, nothing
| happened. "My final check was delayed by a few days and I got
| weird looks from bank employees", that's it.
| greenie_beans wrote:
| i enjoyed the story. it was entertaining enough without some
| big ending.
| IncRnd wrote:
| This can all be understood by not thinking of your bank as a
| bank. Every bank employee, except a teller, is a salesperson
| trying to make a living by upsells. They are paid commission.
| Since your bank really isn't a bank, the one thing they don't
| have is cash money. You might have problems withdrawing $10,000
| at one time.
| [deleted]
| dcow wrote:
| The last week has made me really question why VC firms don't
| provide cash management crash courses to founders, or something
| of the like (cash management consultants or something). It seems
| like a _huge_ flight risk to write $10MM and $20MM checks and
| just hand them to a founder with no financial staff whatsoever
| who only cares about finding PMF and who couldn 't care less
| about cash management. It's great that Mercury is doing all this
| stuff for founders, just seems like it should be table stakes for
| VCs to require some sort of cash plan to be approved before
| handing over the check. But what do I know maybe 10MM is peanuts.
| throwawaaarrgh wrote:
| VCs are psychopaths. They don't care if the world burns down as
| long as 1 out of 50 investments turns into a huge valuation.
| Poor cash management? They wouldn't care if he was feeding
| stray cats to an ML algorithm and burning $1000 bills to power
| a crypto miner.
| rietta wrote:
| I wonder if this would have gone differently if the author had
| originally opened business account with the local teacher's
| credit union. That could have really been interesting to see how
| the account manager handled his account. And @jmillikin's comment
| about the author being used to treating banking as an anonymous
| store for cash and executor of transactions vs how they have
| traditionally worked is spot on.
| niffydroid wrote:
| I'm in the UK, why on earth does it matter about the branch? In
| the UK it's about the bank not the branch. The branches left
| generally are pretty small now doing the most basics of tasks.
| tcldr wrote:
| Banking in the US had quite a few surprises for me. Often
| masked as 'for security' when it's anything but. A few examples
| spring to mind.
|
| 1) Chip and pin took the US forever to adopt. I've heard
| arguments that this is because chip and pin is 'insecure'.
| Insecure compared to a signature or magnetic stripe? Really?
|
| 2) SSL certificates. A lot of the retail banks use the cheapest
| grade SSL certificates. No extended validation. So you don't
| get that reassuring green padlock. No idea why. Something about
| compliance I read once. Bizarre.
|
| 3) ACH payments take three days to wire. Again, I've heard the
| argument for this is that it helps security as it gives you a
| chance to cancel the payment before it finally completes. More
| plausibly though, I think it helps the banks generate fees.
| Granted, it took legislative intervention in the EU to get this
| right, but clearly it's a net win for the economy.
|
| A lot of people buy the arguments, too. Banking in the UK/EU is
| like living in the future when compared to the US.
|
| EDIT: Oh, and I forgot about cheques (checks). The US still
| loves a check. The banking equivalent of the Penny Farthing.
| quesera wrote:
| > So you don't get that reassuring green padlock. No idea
| why. Something about compliance I read once. Bizarre.
|
| All major browsers have removed the green padlock for EV
| certificates. It did not improve user security behaviour.
| There are some arguments that it had a detrimental effect.
|
| You can still distinguish certificate types by clicking on
| the small padlock icon in the URL bar. But of course no one
| does that.
|
| Consequently there is no current reason to pay (in cost and
| time) for an EV certificate.
| tcldr wrote:
| That's fair. Maybe Wells Fargo and others were on the
| cutting edge of this change. But somehow, I doubt it.
| jgilias wrote:
| This really highlights the difference between what banks think
| they are, and what most of their customers think they are.
|
| Also, this makes me think how in a world where stablecoins are
| regulated with clear rules of what their issuers can and can't
| do, you'd be better off having your funds in something like USDC
| instead of a bank account. It's basically the same thing as a
| bank account but with full instead of fractional reserve, and the
| ability to hold and transfer the 'I Owe U' units without
| involving 'the bank' itself.
| rowls66 wrote:
| What surprised me most about the story is that despite a very
| unusual pattern of transactions for a business banking account at
| a local branch, the OP only received occasional calls from the
| local branch banker. I would have expected at least one call from
| the bank's compliance department inquiring about the source of
| the funds, and requesting more information about the nature of
| the OP's business. Bank's are legally required to know their
| customers and to report potentially illegal activity. This
| account clearly did not go unnoticed.
|
| I have received such a call from Chase only once in my 35 adult
| years, and it was triggered by a deposit much smaller than 35M.
| jsty wrote:
| They wouldn't have looked at it as a one-off $35M deposit
| though, but as one of many increasingly large deposits into a
| tech company that could all be traced back to a VC firm - all
| of which could be verified by information the bank has
| available without needing to query the customer, not least a
| series of effervescent PR pieces by said VC funds about their
| new investment
| par wrote:
| I'm more curious how the author secured the $1m cashiers check
| during transport and deposit to the next bank!
| neilknowsbest wrote:
| I wanna know how he managed to initiate a wire for $35MM online
| (and approximately 100% of account balance), presumably to a
| brand new recipient, and only got a single phone call and the
| wire request wasn't rejected. Maybe things have changed, but my
| experience now is that I'd have to go into a branch to do that
| wire, and I'd probably get the normal verification call plus
| another from the account manager.
| astura wrote:
| Yeah, I also this as weird.
|
| I opened a new account and ACHed $25k into it which triggered
| all sorts of "fraud alerts" and put my money in limbo for
| days. Ended up having to get on a three way conference call
| for the transfer to go through.
| samspenc wrote:
| And I'm curious whatever came out of the fraud investigation at
| Chase. I mean, there was some fraudster who had control of a
| well known startup's bank account (granted, the older one) and
| moving six-figure amounts out of it regularly, what in the
| world happened?
| rippercushions wrote:
| Four-figure ("thousands of dollars out every few weeks"),
| presumably specifically to avoid tripping any automated
| checks on moving over $10k.
|
| But yeah, it's still kind of mind-boggling that they could do
| this for apparently years without anyone noticing. And not
| just on Chase's side: how do you not notice that the money
| customers claim to be paying you is not actually landing in
| your main bank account?
| Aeolun wrote:
| Put it in his pocket and walk to the next branch over? What
| exactly do you expect to happen?
|
| He can make that trip a thousand times and never encounter any
| issues. Whether there's a 1M check in his pocket is immaterial.
| nodesocket wrote:
| Typically when buying a house the down payment is either a wire
| or cashiers check. I did a cashiers check, just drove right
| from the bank to the title and escrow company.
| NSMutableSet wrote:
| Manhattan Beach is a nice city. The median for SFH is close to
| 4 million.
| Nifty3929 wrote:
| Why are so many looking for a villain here?
|
| I don't think anyone did anything wrong at all.
|
| Alex correctly assessed that he was giving his customer
| everything they wanted, and left it at that. It doesn't sound
| like he was pushy. He didn't call more than once in a while after
| big deposits. Mitchel just needed a place to hold cash. Seems
| like they both got everything they needed out of the
| relationship.
|
| If anybody here was deluded, maybe it was Alex's leadership who
| mistakenly thought there was a chance to sell huge financial
| products to this "whale." Alex understood otherwise, and probably
| spent most of his time managing that impedance mismatch with his
| boss.
| dangrossman wrote:
| I get those voicemails from "my personal banker" at a branch of
| my bank I've never actually walked into a few times a year, "just
| checking in to see if we're meeting all your needs" or something
| like that. I hadn't noticed those calls are correlated with me
| moving around large amounts of money, e.g. when I pool money into
| a checking account to buy a house or whatnot. I suspected some
| department is responsible for watching that kind of thing for
| fraud, but never thought it'd be some random banker at a specific
| branch.
| UncleEntity wrote:
| You can probably turn those events into a free toaster with a
| little unease in your voice about how well the bank is doing
| their job.
| astura wrote:
| Is it Wells Fargo?
|
| I get these exact phone calls from Wells Fargo because they
| bought my mortgage, I don't have any other accounts with them.
| Since they bought my mortgage I've never even been in a WF
| branch. They call from the closest one, which isn't very close.
|
| They are the only bank that's ever called me like this. I have
| had accounts with many different banks.
| cperciva wrote:
| I get those calls from my local (Canadian) branch, and I've
| noticed a correlation with having an unusually large balance.
| (In fact, I'm expecting such a call in the next few days since
| I have a new car worth of cash in my account.) It's usually
| almost immediately apparent that they want to "help" me invest,
| aka. buy their high fee mutual funds.
|
| Alas, I don't think Tarsnap has ever had such calls from my
| bank -- I guess it doesn't keep enough cash for them to
| consider it an exceptional small business account -- but I have
| had such calls from PayPal... interestingly, not correlated
| with anything I've noticed, so maybe PayPal is just calling
| everyone in Tarsnap's volume range on a schedule. Similarly, I
| get regular "check in" emails from AWS... the most recent one
| offering a discount ticket to re:invent.
|
| I don't think I've ever had any such calls from Stripe. Now I'm
| starting to feel unappreciated!
| shell0x wrote:
| 100%. CIBC calls me about that too and tries to upsell. Just
| tell them you plan to leave the country or something and
| you're not interested, then they stop chasing.
| shapefrog wrote:
| > I suspected some department is responsible for watching that
| kind of thing for fraud, but never thought it'd be some random
| banker at a specific branch.
|
| Why wouldn't the fraud department ask the "account manager"
| what is going on?
| walrus01 wrote:
| In general, whenever some business I have a vague professional
| relationship starts calling me on the phone because clearly
| some CRM system has prompted them into "just checking in!", it
| only bothers me and becomes a source of annoyance. I don't like
| getting calls from people who want to sell me new things or who
| work on commission.
|
| The likelihood of me continuing as a happy customer is
| inversely proportional to the number of unsolicited calls I
| get.
|
| Mostly all this means is these days I give out the main number
| to my pbx IVR menu and never my direct cellphone number.
| Aeolun wrote:
| I dunno, I kind of like that it's the same person all the
| time. If they're happy with me saying 'everything is fine'
| until everything is not fine and I call them back, that works
| for me.
| bmmayer1 wrote:
| I do not get these calls. Must not be doing that well :)
| jongjong wrote:
| I will never trust a bank with any amount over $50k.
|
| It's weird. I remember 5 years ago, when I got involved in
| blockchain space, I was seeing people holding $20k in crypto and
| I was thinking that they're crazy. Now I'm holding over $20k in
| crypto myself and it feels like the safest asset on earth.
|
| I don't even trust company shares. I would never trust any human
| being with more than a new car's worth of value. I worked too
| hard for it and humans are not trustworthy enough.
| renonce wrote:
| In what crypto? Holding in USDC means trusting your money with
| Circle, and holding BTC means trusting whatever exchange that
| you're going to deposit your money into.
| mattdesl wrote:
| Holding BTC doesn't require trust in a single exchange, only
| trust that it continues to hold some market value.
|
| If you have $20K of non-blacklisted BTC you will probably be
| able to find a buyer somewhere in the world, though the
| exchange rate might not be as efficient as a CEX like
| Coinbase.
|
| GP's logic seems poor though. In US or EU, probably safer to
| hold up to the insurance limit in local banks. Beyond that,
| or for higher risk assets or in countries with poor banking
| infra, crypto becomes a viable option.
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